Ask the Underwriter: Q4 2023

1. Should an agent include as an exception in Schedule B-I of the final policy covenants and restrictions found in deeds for neighboring lots in the subdivision but not in the deed of the seller’s lot?

To answer this question, the title examiner must determine whether a general plan development was created by the developer of the subdivision. Vermont Title Standard 33.2 regarding Implied Covenants – Common Scheme states “[w]hen a title examiner encounters deeds to lots from a common grantor, some or all of which contain covenants regulating the use of the land conveyed, the title examiner must assess whether the covenants found in the chain of title differ from other deeds from the common grantor, and whether those covenants not found in the chain in title apply to the title being examined by virtue of inclusion in other deeds from the common grantor.”

As noted in the Comments to the Standard, “[a] common scheme of development occurs when a developer imposes covenants on the lots before the first lot is sold, or when the owners of the lots in the development agree to the imposition of the covenants” Comment 1, Title Standard 33.2. Further, “[c]ovenants shall be implied if a general plan is created evidence by 1) subdivision by common owner; 2) general scheme of development for subdivided properties; 3) majority of subdivided lots contain similar covenants; 4) actual or constructive notice is imparted.” Comment 2, Title Standard 332., citing Patch v. Springfield, 2009 VT 117, 187 Vt. 21 (2009).

The attorney representing the purchaser may need to do a title search of the neighboring lots and also of the development to determine whether a general plan development was created. If the first deed out conveyed covenants, covenants were recorded prior to the first deed being recorded, or all of the owners of the lots entered into a written agreement, it is likely that the covenants and restrictions should be listed as an exception in Schedule B-I of the policy despite not otherwise being listed in the seller’s deed.

2. When you do not find a written access agreement or language contained in a deed in the chain to your client’s lot, and there doesn’t appear to be other, public access, to the lot, how can you insure access? 

Before insuring a parcel of land, one must confirm that there is access to the land from either a public right of way or via a private easement. To insure such an easement one must further confirm that such access is marketable under the Vermont Marketable Record Title Act. If a title search does not easily show an access easement either in the chain of deeds, there are other options a title examiner can look for to determine whether there is access to the lot.

The first is a recorded plat map from the time of subdivision of the lots that shows access. A subdivision plan, recorded at the time the subdivision was created may show roads or access ways to be built. Vermont Title Standard 5.3 states: “[u]nless a contrary intention appears of record, a title examiner may presume that a grantee acquired rights in all roads, streets, parks, and other designated ways shown on a recorded plat where a subdivision was lawfully created and constructed, or partially constructed. The implied easement is created where land is conveyed with reference to a recorded plat.”  When a subdivision plat is recorded and referenced in the deed for the lot, and said plat shows access to a lot over use of a certain street or right of way, we can rely on it as a means of access; and this also assumes the party who created the subdivision had marketable title when the subdivision, and what is depicted on said subdivision plans, was created.

The second is finding a separate instrument in the chain that granted access despite it not otherwise being referenced in subsequent deed.  There may be situations where a title examiner is unable to find a recorded plat at the time of subdivision, or the recorded plat map does not show an access point to the lot from use of a specific accessway. In that case, a further review of the land records may be needed beyond the 40 year search period to confirm whether access was granted in another way. Specifically if there is an instrument containing the right of way that was subsequently left out of the chain of title. An access easement is usually considered an appurtenant easement, (one that severs a parcel of land rather than a particular person and which is incident to the ownership of the dominant estate). Vermont Title Standard 5.1 notes that “an appurtenant easement is created when a right benefiting one property (the dominant estate) to use another property (the servient estate) for a specific purpose is established in an instrument executed with deed formalities.”  Comment 1 notes that an “appurtenant easement runs with the land to which it is appurtenant and passes with the land to a subsequent grantee with passage of the title of the dominant estate, whether or not reference is made to the appurtenant easement within the vesting instrument” (Title Standard 5.1, Comment 1).  Therefore, the mere absence of a reference to an easement in the chain does not mean it does not exist or was not carried forward when the easement is appurtenant and was otherwise created.

Absent a plat map and/or an appurtenant easement otherwise found in the land records, the third option is to obtain an access agreement signed by all the interest holders of the street that your client is seeking to use to gain access to their lot. This includes the owners in fee, any mortgage holders, and others who may have a right in and over the easement area (such as other easement holders). Determining who holds the interest holders are, and obtaining their signature and recording such agreement in the land records would, of course, create the access your client otherwise needs.