By James F. Clarke, Esq., VP Underwriting Counsel, WFG National Title Insurance Company, NJ and PA Region
Owners of land abutting a body of water have certain long-established rights to that land and the use of the water adjacent to it. What they can do with their land and the water, however, depends on a somewhat complex set of doctrines, laws and judicial decisions that sometimes overlap. These riparian rights are rooted in the English Common Law and pass with the conveyance of the land.
Although the ALTA policies exclude waterways from the definition of the Land insured therein, the issuance of title insurance to land that abuts or is covered, even partially, by water can pose significant risk to the title insurer if not addressed with appropriate due diligence and caution. With its continuous movement and unpredictable fluctuations, an insured’s property boundaries can shift resulting in a possible change of ownership. Who owns what is not always clear and specific water rights may involve data which is not always revealed by a customary examination of record title. Things get even more complicated when you consider that water rights are governed by various federal, state and local statutes, rules and regulations.
State laws vary on this topic so there is no single checklist that can be applied universally across the country to describe the appropriate due diligence and careful scrutiny required when asked to insure a “water property.” Although not intended to be an exhaustive list, the following sources may be helpful to ascertain any applicable water rights:
- the public record, deeds,
- municipal tax searches,
- surveys,
- State Environmental Protection Agency records,
- filed maps,
- Google Earth,
- third-party search companies.
From a title examination and insuring standpoint, if the property in question is situated next to a body of water, except in the most unusual circumstances, you must assume it is navigable (i.e. sovereignty land) and include an appropriate exception in your commitments and policies. Your regional underwriter should be consulted to determine which exception or exceptions are appropriate and/or required.
Affirmative coverage may be available under certain circumstances to address the sovereign rights of the state and/or federal governments, among other things. However, no affirmative coverage may be provided without prior underwriter authorization.
Be sure to contact your local underwriting counsel with any questions you may have.
By James F. Clarke, Esq., VP Underwriting Counsel, WFG National Title Insurance Company, NJ and PA Region
