Sep 13, 2024
Homeowners are often warned to brace for the unexpected. After all, you could purchase a home that passes its inspection with flying colors only to face a costly repair a few months down the road.
Similarly, it’s possible to be living in your home for years, if not decades, only to discover that a portion of your land is restricted due to an unregistered easement on your property.
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That’s exactly what happened to Hamid Salahutdin, a 74-year-old Florida homeowner who found himself in a bind last year because he didn’t know about a 50-foot easement that ran through his property.
“The house and everything… it’s worthless,” he told ABC Action News at the time.
It’s not his fault that he didn’t know about the easement, either — it allegedly wasn’t properly recorded, so it didn’t come up in a title search when he’d purchased the home 14 years ago.
Unfortunately, things like this can happen when you buy a home — which is why it’s a good idea to consider title insurance.
A costly surprise
Salahutdin, the Florida homeowner, sued the City of St. Petersburg in 2023 over a failure to record an easement on his property.
The easement contains pipes that supply water to 360,000 residents. The problem is that those pipes are now nearly 100 years old, so a rupture could happen at any time, resulting in untold damages.
This discovery has eroded the value of Salahutdin's home. While Zillow puts the value of the property at nearly $1 million, that estimate doesn’t account for the previously unknown easement.
Now that it’s been discovered, the home is likely going to be a tough sell, and Salahutdin is realistically looking at much lower offers whenever he decides to list his property.
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An easement is a legal arrangement designating land for a specific use, and it isn’t typically a problem. Some properties have conservation easements, for example, which require property owners to preserve that portion of their land for the sake of natural or cultural heritage.
If part of your backyard is a conservation easement, for example, it means you can’t build a pool or permanent shed in that area.
It may, or may not, impact the value of your home, depending on the specifics of the situation. What makes Salahutdin's situation far worse is the potential for a catastrophic flooding event due to the old pipes.
He had even originally purchased a $350,000 title insurance policy to cover a situation like this — but the title company is refusing to pay, claiming that they are not liable because the city didn't officially record the easement.
Now, Salahutdin's best course of action is to sue the city for the financial losses he's still incurring.
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Why it pays to have title insurance
Depending on the kind you have, title insurance is designed to protect you (and your lender) against loss or damage that may result in liens or defects in a property’s title.
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Title insurance can come in handy with such common title issues as: back taxes, filing errors, liens, title forgeries, conflicting wills — and undocumented easements.
In general, the title insurance company would cover the financial damages incurred by a homeowner due to an easement that was never disclosed at the time of the sale.
In Salahutdin's specific case, however, it could be that, because the city was allegedly at fault for not properly recording it, the title insurance company doesn’t consider itself liable.
It’s common to buy title insurance in the process of closing on a home, and it’s a good idea to purchase title insurance even if your initial title search — which is done in the course of your mortgage closing — comes up free and clear of issues. As evidenced by Salahutdin's situation, surprises can still arise.
Another important thing to do in the course of buying a home is to review the results of your title search carefully for red flags. In addition, take a peek at your property survey because, typically, if there’s an easement on it, it’ll show up there.
In the aforementioned situation, Salahutdin couldn’t have done anything more to protect himself. He’s in a bind due to the city’s alleged failure to properly record the easement on his property.
But most of the time, that won’t be the case, and many homeowners will have a relatively easy time finding out if there’s an easement on their property or not.
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Maurie Backman has been writing professionally for well over a decade. Since becoming a full-time writer, she's produced thousands of articles on topics ranging from Social Security to investing to real estate.
