Title News

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7-28-2008

              RIPARIAN RIGHTS, TITLE INSURANCE and DUE DILIGENCE

Your title insurance policy neither insures nor guarantees riparian rights! The very reason you paid big bucks for a little piece of dirt, and now that you spent your money you find out that you are self insured as far as riparian rights are concerned. Shoulda read the fine print!! So now what do you do?

Don’t panic! After all, most lakefront owners suffer no loss as a result of riparian title defects or even the complete lack of riparian rights. There’s no guarantee that you gain anything by spending money on a due diligence riparian record search before buying the property. It’s possible to quietly and peacefully possess land forever even with defective or fatally flawed riparian title.

But if you’re concerned and really want to spend a lot of money, any title insurance agent can prepare a so-called “due diligence riparian record search” for your attorney to examine. Just ask the title agency that sold you your title insurance policy.

Ask about cost first because the riparian search costs more money to produce than the high profit, no brainer record search usually required to issue a title insurance policy. We’d all rather spend our time on the most profitable stuff. You have to be persuasive to get a title agency to devote high profit time to low profit business.

If you’re dealing with a small title agency, your dollars speak loudly. But if you’re a captive customer of one of the title agencies with lawful profit sharing arrangements with banks and real estate companies (we don’t), you’re low profit riparian search is not as important to their bottom line. Consequently your powers to persuade are, well, forget it. Your buyer will probably have to accept the riparian title blindly, as is, and with all faults or even accept the property with a complete lack of riparian rights. The only protection they’ll get is the seller’s (you) title covenants in the Warranty Deed.

But, like any other inspection, buyers should make sure their purchase agreement reflects their concerns.

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