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  1. #1
    Join Date
    May 2017
    Posts
    24

    Default Compensation for Easement Not Disclosed in Appraisal

    My question involves real estate located in the State of: North Carolina

    Hi all,
    Some context before my question: I purchased a property with an ingress & egress access easement disclosed in the deed/title. Everything seemed fine as is at purchase because the easement had been in existence for almost 20 years and there had been no issues. The appraiser returned a favorable valuation above my purchase price and didn't even list the easement. As it turns out, the easement was passing through my fence, trees, bushes, a greenhouse, garden beds, even my driveway where I park today.

    Shortly after I purchased, my neighbor (the dominant estate) sued me to take down everything and pay punitive damages of $10,000 for loss of use of the easement, even though I literally had done nothing, just inherited the property as is.

    Fast forward a year after getting sued, I'm in a complex lawsuit with $20k+ already incurred in legal fees. I'm trying to get someone to compensate me for my legal fees. Title insurance won't do it because they have a clause that excludes easements from the insurance policy. Homeowner's insurance won't do it because it's not a matter of liability (I didn't cause any actual damage to the Plaintiff's property), nor did my property get damaged (at least not yet lol).

    So I went to my mortgage company and asked for compensation because the appraiser they hired did not list the easement. My understanding is the appraiser is also required to assign a dollar value for any easements the property is burdened by. I'm positive if the appraiser had done her job, she would have assigned at absolute minimum a $10k cost to the easement, driving the appraisal below the purchase price. In other words, I purchased a significantly overvalued property. After extensive back & forth conversations with my mortgage company (I got all the way to the chief risk officer LOL), they offered to pay me a $5,000 check today to compensate me for my legal fees, but they maintain that they don't think they did anything wrong. Their reasoning is that an appraiser really doesn't understand easements in that much detail and that it should have been the role of the surveyor and closing attorney to disclose and explain properly. I don't buy that - the appraiser assigns a value to a property, so why wouldn't they at least read the deed to look for encumbrances, and then investigate? Seems like basic negligence that led me to purchasing a significantly overvalued property because, let's face it, I'm not the expert here.

    In summary, my question is, what's the best way to go about getting compensated for the situation I'm in? If you were in my place, would you take the $5,000 from the mortgage company? Are there other avenues that I can explore, should I be pushing this further with my mortgage company? I've also thought about suing my closing attorney and/or the seller for misrepresenting the property, but I've never sued anyone and the idea of another lawsuit (in addition to the current one) is pretty idiotic. I'm open to it though because I'm really not a fan of dishonesty, and the seller misrepresented a lot about the property.

    Thank you all for your time and thoughts on my situation!

  2. #2
    Join Date
    Nov 2015
    Location
    47.606 N 122.332 W in body, still at 90 S in my mind.
    Posts
    1,409

    Default Re: Compensation for Easement Not Disclosed in Appraisal

    Just curious but did you install the driveway, fence and whatnot or was it like that prior to your purchasing the property?
    "Where do those stairs go?"
    "They go up!"

  3. #3
    Join Date
    May 2017
    Posts
    24

    Default Re: Compensation for Easement Not Disclosed in Appraisal

    Thanks for your response. Everything was there prior to me purchasing the property. I didn't make any changes to it.

  4. #4
    Join Date
    Nov 2013
    Posts
    6,430

    Default Re: Compensation for Easement Not Disclosed in Appraisal

    You know that smell when fish rot? How is it that while the seller owned the property the dominant estate didn't have a problem with the impediments to the use of the easement until you purchased the property? Does the dominant estate have ingress/egress without using the easement? I would assume the answer is yes since they have been accessing their property. Or is the neighbor just now developing their property and discovered that the easement was impeded?

    You got sued and your attorney answered the suit. Did your attorney counterclaim against the seller? The North Carolina seller disclosure form asks about any issues disclosing easements on the property.

    27. Is the property subject to any utility or other easements, shared driveways, party walls or encroachments from
    or on adjacent property?......................................... .................................................. ...........................
    How did the seller answer that question? It would be hard to believe that the seller didn't know that there was a problem with the neighbor's easement.

    When you talk about title insurance, are you speaking of a buyers title insurance (did you take out buyers insurance) or are you speaking about the title insurance that protects the lending institution? I never heard of title insurance that didn't cover clear title due to easements exclusion. What good would that insurance be if it didn't guarantee a clear title?

    28. Is the property the subject of any lawsuits, foreclosures, bankruptcy, leases or rental agreements, judgments, tax
    liens, proposed assessments, mechanics' liens, materialmens' liens, or notices from any governmental agency that
    could affect title to the property?......................................... .................................................. ...........................
    Did your seller know of the pending lawsuit? Is it only after you purchased that this issue came to light? Do you smell the fish?

    Without knowing what the complaints and the answers say, it is hard to give you any advise. But I would amend the complaints to implead the title company, the mortgage company, the appraiser, and the seller.

    I would also be exploring the grant of the easement, when it was granted, was it ever used by the dominant estate, and if the dominant estate took any action to abandoned the easement.

  5. #5
    Join Date
    Sep 2010
    Posts
    19,207

    Default Re: Compensation for Easement Not Disclosed in Appraisal

    Appraisals do not cover the issue you're complaining about. All they do is verify the valuation of a property. If you want to know about easements and other encumbrances, you needed a title search, which is only really valuable when you purchase a title insurance policy to back it up.

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