Posting for

Wednesday, October 20, 1999

by: Dawn Chase

Virginia Lawyers Weekly

and: Bert Rush

VIRGINIA COURT CASE/DUTY TO FLAG/ESCROW AND CLOSING

Debbie Asero and Palma Collins (Fairfax, VA) have forwarded an article from the September 13, 1999 issue of Virginia Lawyers Weekly, titled "Lay Closer Hit for Not Flagging an Easement"--that'll make ya pucker.

The article reports a court case recently decided in Henrico County, VA, against Lawyers Title (in its capacity as a "lay settlement agency"). Some of you may recall that Virginia has recently been a battleground between the organized Bar and lay settlement service providers, and that this battle was resolved by the Virginia legislature's enactment of the Consumer Real Estate Settlement Protection Act ("CRESPA") in 1997. CRESPA permits real estate closings by non-attorney "laypersons."

The plaintiff in the reported case was the purchaser of a home whose transaction was handled by Lawyers Title. Plaintiff's property was encumbered by a road easement-- a fact which was disclosed at closing on a survey and also by an exception taken in the owner's title policy. Plaintiff had asked the seller about the easement, and was told it led to an old cemetary.

After plaintiff moved in she learned the road was regularly used by a neighbor "to give landscaping and maintenance trucks access" to the neighbor's land. The plaintiff found this use annoying and paid the neighbor $6,000 to remove the easement. Then she sued Lawyers Title to recover the $6,000.

Pleading causes of action for breach of contract and negligence, plaintiff complained Lawyers Title failed to bring the easement to her attention at closing, and failed to advise her that she might find its use objectionable.

The trial court held for plaintiff. The article does a very good job of explaining the case. Because of the small amount involved, and the possibility of establishing bad precedent, it's my guess the decision won't be appealed. To view the article, which might also be titled "Payback for CRESPA," click on the URL below.

Does everyone agree with plaintiff's counsel, who says "This would be a lay-down hand of malpractice if a lawyer did this." ?????

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Following Wednesday's posting, Rob Friedman (Manhattan) writes:

First of all, I must declare that I, too, am a "lay person." Something is fishy here. Did plaintiff's lawyer actually examine a copy of the easement to determine who, besides the buyer, had rights? Did the buyer inspect the property at a time when the road might be in actual use, or conveniently do so on a Sunday? Seems to me Lawyers Title did its job properly, and the buyer and buyer's counsel were remiss in forgetting that old legalism, "Caveat emptor!"

Reply: Well, the buyer didn't actually see the easement in use before closing--and she wasn't represented by counsel until after closing.