Buyer of commercial property needs to be sure of allowed uses

MAILBAG

February 22, 2004

Joseph Citrano Jr. of Baltimore County bought a commercial property for $100,000. It was listed as a 5,662-square-foot lot with a 20-by-60-foot one-story building and parking for eight to 10 cars.

Two months after the purchase, Citrano wanted to build a fence to protect vehicles parked on the property. A neighbor claimed she had an easement over the property preventing such a fence. Citrano says he was not aware of any easement and that neither the real estate agent nor his title company told him that the property was subject to an easement.

He wants to know what recourse he has and whether he should sue the real estate agent, the title company or both.

Dear Mr. Citrano: A buyer of commercial property needs to make sure it can be used for its intended purpose.

That's why it's almost always important for the purchaser to investigate the property before closing on it. The investigation includes checking the zoning on the property to make sure it's zoned properly for the uses the buyer wants to make of it; getting a title report to make sure there are no easements or deed restrictions that limit or prevent the purchaser's intended use; and, if easements or possible encroachments exist, obtaining a survey to show their location.

Usually, a contract for commercial property will include provisions dealing with zoning and title issues. We don't know what your contract said about those issues.

But, when a buyer wants to improve the property, such as by building an addition or a fence, the buyer is well advised to include contract language, which makes his obligation to settle conditioned upon a satisfactory investigation of zoning and title.

In your case, you should first review your sales contract to determine whether the seller promised that the property would not be subject to any easements.

Unless the contract affirmatively states that there are no easements, it usually is the buyer's responsibility to find out by having the title searched by a title company or lawyer.

Because you purchased a title insurance policy, you should review it carefully. If your neighbor has an easement over a portion of your property, as she claims, this easement should be specifically listed in the policy, and your title company should have a copy of the recorded easement document.

If the neighbor's easement is referred to in your title policy, you had legal notice of it, as you should have read the title report and been aware of the easement prior to settlement.

If the easement is not specifically mentioned in your title policy, either there is no easement or your title insurer might be obligated to defend your title against your neighbor's claim.

As for the real estate agent, he is not a surveyor or title insurer. He has no duty to find out or advise you about easements unless they are apparent from an inspection of the property or unless the real estate agent has knowledge of the easement.

I suggest that you take your sales contract, title policy and other purchase documents to a lawyer and get an opinion as to your legal rights based on your situation.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.