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September 08, 2021

Property is Unique

California Law has long held that property is unique and that each buyer is entitled to the presumption that they purchased a specific property because of its unique qualities

Search For the Perfect Property

You are in search of the perfect property, a unique property that will work for your needs – maybe you are buying a home and want to build a second structure in the back yard; perhaps you would like to remodel and add to the house or building on the lot. You do your due diligence and purchase Title Insurance from a Title Company. This should provide peace of mind and allow you to know there are no clouds you are unaware of on the property’s Title.

Fast forward some amount of time, you found the right property for your needs and have chosen to purchase a specific property – Title came back clean, you are in the clear…or so you hope. Then you find out there is an easement across your property, or a covenant you were not made aware of, hopefully you have not yet built on the property or made plans to build on it. Then out of nowhere, PG&E, or some other company, reaches out to you and tells you that you have a large easement across your property and you will not be able to build on it, even worse, if you already have, you will have to tear it down.

Real Life Example

This was the case of one of our clients at Tierney Law Group, PC. Our client bought a specific piece of property with the intent of building a dwelling in the large backyard for the purpose of rental income. Our client obtained permits and plans and constructed the fully functioning structure in the backyard. Fast forward a few years and PG&E reached out to him to inform him of an easement PG&E had recorded, 100 years prior, stating that he could not build in almost any part of his backyard due to the easement.

Now what?

Now our client was on the hook to tear down the dwelling and lose the ability to have that rental income he had always planned on. Further, he was out the money he had spent to construct the fully functioning building for rental income. Even worse, his property was worth much less than he would have paid for it had the easement been disclosed to him.

Next Steps – How to Sue your Title Company

The simplest way to solve this problem is to sue the Title Company for breach of contract, breach of implied covenant of good faith and fair dealing, and for negligence. There is case law in California that states that Title companies can be on the hook for breaching their contracts with property purchasers if they fail to disclose or find the presence of a cloud on title, specifically an easement, that they had a duty to find. White v. Western Title Insurance Company 40 Cal.3d 870 (1985). Further, this case holds that title companies are in breach of their implied covenant of good faith and fair dealing by lack of disclosure of this kind and their behavior is negligent for the same set of facts.

Experienced Attorneys at Tierney Law Group, PC can help

Thankfully, the experienced real estate and civil litigation lawyers at Tierney Law Group, PC, knew exactly how to handle this. After inception of the lawsuit against the Title Company, the Title Company immediately paid out $75,000 – the diminution in value of the property due to the lack of disclosure of the recorded easement – this was immediate relief to our client who was led astray by the Title Company. Our client is still in the process of obtaining the other lost value (cost to build structure/tear structure down/lost income in the form of rents), but if you are having a similar issue with a title company, Tierney Law Group, PC is the firm to call. We can help you navigate the complex issues around your situation and get you the relief you are entitled to.

Our experienced Bay Area real estate and civil litigation attorneys can help you navigate issues with Title and matters with Title Companies. Give us a call or schedule a consultation today.

Katlin N. Law

Attorney at Tierney Law Group, PC