When I prepare right-of-way and easement documents for a (quasi) public utility provider I usually also provide the "deeded" owner's information. Sometimes it is as simple as looking up the most recent conveyance, sometimes it can get a little more in depth. In my contracts with these utility providers I have a short blurb that explains this information is merely the latest info of record and I caution the client to satisfy themselves as to whether the entity that is granting the easement truly has the ability to do so. My client has general counsel on staff and over the years we have ran into a couple of "hiccups" but nothing really of any substance.
When my client decides that an easement is required I locate the proposed facilities (aerial or buried power lines) by field survey of the facility engineer's staking. At that time we also locate the boundary of the "servient tenement". In a perfect world and armed with that info, I create a document that both describes the easement and graphically indicates its location upon the property.
Recently a mortgage company contested the owner's (record grantee of a warranty deed) ability to grant what they called "an encumbrance" upon a piece of property that said mortgage company asserts ownership of a "superior interest" in the property. The facilities are now existing and the deeded owner granted an easement (now of record) for the utility line. The mortgage company actually sent the legal department of the utility company a drawing showing how they would prefer the property be served. Their "proposed route" involves crossing two other pieces of property but shortens the line upon the property on which they feel they have a "superior interest".
The nasty letter was a thinly veiled threat of litigation demanding action such as vacation of the easement and relocation of the facilities. I have seen this happen at least once in my career, but it involved a chunk of commercial property that was embroiled in a bankruptcy. I met with my client's general counsel. He really doesn't know what to make of this. His biggest concern is the mortgage of this property is also filed of record. Within this mortgage are words to the effect of limiting the deeded owner's ability to enter into agreements or contracts that affect the title of the property, but nothing specific about the granting of easements.
It appears as though the mortgage company is asserting rights that would usurp those of the record owner. Anybody out there ever ran into anything similar? Interested parties want to know...
paden cash, post: 382780, member: 20 wrote: When I prepare right-of-way and easement documents for a (quasi) public utility provider I usually also provide the "deeded" owner's information. Sometimes it is as simple as looking up the most recent conveyance, sometimes it can get a little more in depth. In my contracts with these utility providers I have a short blurb that explains this information is merely the latest info of record and I caution the client to satisfy themselves as to whether the entity that is granting the easement truly has the ability to do so. My client has general counsel on staff and over the years we have ran into a couple of "hiccups" but nothing really of any substance.
When my client decides that an easement is required I locate the proposed facilities (aerial or buried power lines) by field survey of the facility engineer's staking. At that time we also locate the boundary of the "servient tenement". In a perfect world and armed with that info, I create a document that both describes the easement and graphically indicates its location upon the property.
Recently a mortgage company contested the owner's (record grantee of a warranty deed) ability to grant what they called "an encumbrance" upon a piece of property that said mortgage company asserts ownership of a "superior interest" in the property. The facilities are now existing and the deeded owner granted an easement (now of record) for the utility line. The mortgage company actually sent the legal department of the utility company a drawing showing how they would prefer the property be served. Their "proposed route" involves crossing two other pieces of property but shortens the line upon the property on which they feel they have a "superior interest".
The nasty letter was a thinly veiled threat of litigation demanding action such as vacation of the easement and relocation of the facilities. I have seen this happen at least once in my career, but it involved a chunk of commercial property that was embroiled in a bankruptcy. I met with my client's general counsel. He really doesn't know what to make of this. His biggest concern is the mortgage of this property is also filed of record. Within this mortgage are words to the effect of limiting the deeded owner's ability to enter into agreements or contracts that affect the title of the property, but nothing specific about the granting of easements.
It appears as though the mortgage company is asserting rights that would usurp those of the record owner. Anybody out there ever ran into anything similar? Interested parties want to know...
Yes, and I'm still waiting for a resolution, it sounds like it will finally happen this year, but in this case the mortgage company has been informed since the beginning, they just held everything up, needlessly in my opinion.
Thanks for posting that... maybe the mtg co thinks that foreclosure is imminent. Or, maybe they feel that they have a higher vested interest in this property.
I also run into situations where ONE landowner has Title, and another has possession. Who can VEST or convey the desired R/W? Situations where litigation is needed to resolve the boundary, but it has not yet happened...
Fun fun fun, Surveying (surfing) the USA.... I was not a beechboys fan, but that seemed to fit!
Is Oklahoma a Title Theory or Lien Theory state?
[INDENT=1]When financing is involved in a real estate purchase, it is important to understand if you will be subject to the title or lien theory of mortgages. The way in which a state will interpret how mortgage law is followed will be determined by which type of theory is practiced in your state.[/INDENT]
[INDENT=1] [/INDENT]
[INDENT=1]Each type of theory has special considerations on who will hold title and how foreclosure proceedings would take place if they were to become necessary. In title theory states, the borrower does not actually keep title to the property during the loan term. The seller gives the buyer/borrower a deed to the property but when the borrower signs the mortgage for the loan the borrower gives the title back to the mortgage holder. The lender then holds title to the property, as security only, until all loan payments have been made. During that time the borrower has the right to possession of the property, and the lender delivers the deed back to the borrower only after the loan obligation has been satisfied.[/INDENT]
[INDENT=1] [/INDENT]
[INDENT=1]In a lien theory state, the buyer holds the deed to the property during the mortgage term The buyer promises to make all payments to the lender and the mortgage becomes a lien on the property, but title remains with the buyer. The lenderÛªs lien is removed once the payment of all loan payments have been completed. Foreclosure proceedings in a lien theory state may be more difficult for the lender than in a title theory state, due to the fact that the buyer is holding title to the land and not the lender.[/INDENT]
[INDENT=1] [/INDENT]
[INDENT=1]There is another type of mortgage custom which is referred to as the Deed of Trust theory. Under a Deed of Trust, the seller gives title to the buyer, and the buyer then signs a Deed of Trust which makes the lender the beneficiary in the Deed of Trust. A third-party trustee typically holds the title to the property in trust, with the power to foreclose on the buyer if there is a default. The buyer owns the property and has all rights of ownership and possession, subject only to the conditions in the deed of trust. When the loan has been paid off, the lender will give clear the title by way of recording a Deed of Reconveyance. The Deed of Reconveyance removes the lenderÛªs interest in the property.[/INDENT]
[INDENT=1] [/INDENT]
[INDENT=1]Some states have modified the title and lien theories, and these states are referred to as ÛÏintermediary theoryÛ states. In these states, the title remains with the borrower, but the lender may take back title to the property if the borrower defaults on the loan. Be sure to check with your title officer at the time of your purchase or sale to verify the current practice in your state.[/INDENT]
http://sandygadow.com/what-is-the-difference-between-a-title-theory-and-a-lien-theory-state/
James Fleming, post: 382785, member: 136 wrote: Is Oklahoma a Title Theory or Lien Theory state?
Lien Theory, I believe. God knows in which what state the mortgage company is located.
We went through a title company to obtain some right of way recently and that was one of the things they researched prior to closing escrow.
Makes perfect sense to me. If you come to me asking to borrow money and I loan it to you contingent on the value of the land you are using as collateral...You can bet that I will have some small print in our contract that requires notification on your part and a release on mine before you sell the land or encumber it with easements that may negatively impact the value of the collateral.
Once you have met your contractual obligations (paid me in full), you can then enjoy free and clear title and use of the land (subject of course to the whims of the regulators).
Obviously my comments are just flippant common sense ramblings, but it does makes sense to me - maybe because of where I live.
imaudigger, post: 382790, member: 7286 wrote: Makes perfect sense to me. If you come to me asking to borrow money and I loan it to you contingent on the value of the land you are using as collateral...You can bet that I will have some small print in our contract that requires notification on your part and a release on mine before you sell the land or encumber it with easements that may negatively impact the value of the collateral.
I agree, to a point.
In Oklahoma owners' rights are paramount. An example of this was a recent lawsuit where a utility company attempted to block a property owner from granting an additional easement to another utility within their transmission easement. Oklahoma courts have ruled rights of exclusivity belong only to the deeded owner. Since the transmission line merely occupies an easement, said owner of the dominant tenement cannot restrict surface use of the property. Those rights are reserved for the record owner, easement cannot be exclusive unless agreed upon at their creation, or later modified by the grantor.
Along those lines, who decides what negatively or positively impacts a piece of property? The easement in question is for a newly constructed residential home. The utility company is bound by state statutes to provide utility service to subscribers AND has the statutory right to request specific rights (easements) to maintain the line properly. I believe it might be a different story if it were a pipeline or some other cross country route, but this line is service for the property. I believe that is considered an improvement upon the property.
It is a win win for all the attorneys involved. The attorney for the mortgage company has more billable hours by threatening ligation or better yet actual ligation. Attorneys make $$$ going through the process. When the problem is resolved, they have to quite billing. One of the attorneys for a major client would call the last week of the month and go over the same Title Exceptions that we had discussed earlier in the month. This is why people who think all they have to do is not make a mistake to not get sued live in Fantasy Land.
I always have thought that getting a release from the mortgage company for right of way or an easement was standard procedure. I have never seen the mortgage company present an alternate route. I will review my State's laws in light of the info that James provided.
paden cash, post: 382795, member: 20 wrote:
Along those lines, who decides what negatively or positively impacts a piece of property?
Ultimately? - A judge or the party with the most money.
Probably depends on the value of the land...which in Oklahoma probably isn't much.
Don't they GIVE land away there in order to build up the tax base?
I read that somewhere. Probably in tornado alley.
imaudigger, post: 382864, member: 7286 wrote: ...Don't they GIVE land away there in order to build up the tax base?
I read that somewhere. Probably in tornado alley.
They actually stopped that years ago during the Great Depression. At that time it was also discovered the migration of Okies to the coast considerably raised the average IQ of both states. 😉
The Title Company usually replies with "we refuse to accept that" and see how far it will fly.
Utility companies want to take the least route of distance and resistance to supply their plan for the future.
The fine print is supposed to follow local and state laws to parties rights during the term of the document.
Mortgage company has the right to be a part of the process and give or decline approval to incumberance of the property until the agreement is concluded.
Needy party must ask owner for an easement across someone's property. Owner of the property also has the right to refuse to allow a utility to cross their land until an agreement is reached with the party or owner that the utility will service.
Any price or terms could possibly be ask in consideration for an easement like that.
There practically has to be no other possible way to get connected to the grid and the hookup must serve the public for the courts to overturn an owners decision.
0.02
It would be nice if the banks holding the mortgage would actually respond when the agency contacted them for a sign off on the grant of easement! We weigh the liability around here, sometimes the project must keep moving forward. Jp
It's funny. When there is recompen$e involved, the mortgage outfits always get back quick. In some cases my clients wind up paying for easement; usually in the case of a relocate due to a road project, not just a residential service. Anything over $9999.99 requires a partial release if the property is mortgaged.
They want their moolah. Anything else and you will die of starvation sitting on hold.
