Bulletin: TX2016004

Date:
August 30, 2016
To:
All Texas Issuing Offices
RE:
UNDERWRITING - Overburdening of Easements

Dear Associates:

For some time we have been advising to carefully consider the issue of overburdening of easements when access is provided by an easement. The common situation is this:

A owns Tract 1.  B owns or acquires Tract 2. The best or only access to Tract 2 is across Tract 1.  A grants an easement over Tract 1 in favor of B as Owner of Tract 2. 

Sometime later, B acquires Tract 3 which is adjacent to Tract 2, but not adjacent to Tract 1.  Access to Tract 3 is through Tract 2 and its easement is across Tract 1. B plans to develop a subdivision of 200 homes on Tract 3.

Using the doctrine of overburdening of an easement, it is possible that a court would say that A agreed to the use of the easement over Tract 1 by B for his family only to access Tract 2, and would not allow the use of the easement for the benefit of Tract 3 (owners of a subdivision with 200 homes or B as developer coordinating the construction, etc.). We are now aware that the doctrine of overburdening may be narrower than we may have suspected. In fact, any use of the easement to access Tract 3 may be considered to be overburdening.

What you should do: 

If presented with a situation similar to the one discussed above and if access to the Tract 3 property is through an easement granted to the owner of identified land other than Tract 3, do not issue a policy of title insurance to Tract 3 without an exception for possible lack of access to the property through the specified easement.

The exception should be EASX44 STG or some variation approved by a Stewart underwriter, such as:

Loss, cost, damage or expense arising by virtue of any claim that access to (Tract 3) is through (Tract 2) which access may overburden the easement over (Tract 1) dated _____, recorded __________ of the _____Records of ________ County, Texas executed by ____________ in favor of ___________.

This exception may be removed with a modification of the existing easement to add the newly acquired property. A Texas underwriter must approve the modification document and you would need to except to the revised easement on Schedule B even if you insure the easement on Schedule A.

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.

THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER  AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.

References

Bulletins Replaced:
None
Related Bulletins:
None
Underwriting Manual:
None
Exceptions Manual:
None
Forms:
None