NJDEP | Title Nerds

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Forensic title expert Joe Grabas was our special guest for Episode 5 of our second season of Title Nerds, joining co-hosts Mike O’Donnell and Bethany Abele. Joe is a certified title professional, and the Director and Chief Instructor of the Grabas Institute for Continuing Education. He is also the author of “Owning New Jersey: Historic Tales of War, Property Disputes & the Pursuit of Happiness.”

Mike asked Joe to talk about tidelands issues, a particular concern in New Jersey since the State of New Jersey has rights to the land not only currently flowed by the tide, but formerly flowed by the tide, creating unique challenges for homeowners who may not see any apparent water anywhere near the site; the State of New Jersey may still claim ownership of a large share of that property. Joe emphasized the importance of always ordering a wetlands survey and a land survey upfront when contemplating the purchase of any property, as both a title issue and a regulatory issue. Joe also discussed how the NJDEP handles bulkhead bumpouts for waterfront development, another thorny issue, as well as how hearings before the Tidelands Bureau, which considers applications for tidelands grants, are conducted.

Bethany then interviewed Jim Mazewski, an associate in our Title Insurance practice, about Hillary Developer, LLC v Security Title Guarantee Corporation of Baltimore in the New York Appellate Division, 2^nd Department, a published decision at 219 A.D. 3d 815 (2023). Jim explains the complicated details of the case, wherein a Defendant sold property to Hillary Developer under an alternate name, which property had already been sold to a different buyer at a sheriff’s sale to satisfy a judgment. Hillary Developer later filed suit against three parties including Security Title, which had issued Hillary a title insurance policy, alleging that it had not been informed of the judgment’s existence. Security Title then brought claims against its issuing agent, SSS Settlement, for fraudulent concealment and prima facie tort, alleging intentional harm and malice. SSS Settlement moved for dismissal of the claims, which was denied by the trial court but reversed and dismissed on appeal.

Jim said the important takeaway from this case is that, when pleading a fraudulent concealment claim based on a failure to disclose information, it is necessary to identify the specific duty imposing the obligation to make that disclosure.

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Title Nerds co-hosts Mike O’Donnell and Bethany Abele welcomed two partners from our Environmental Practice In Episode 9, Alexa Richman-La Londe and Steve Senior. Alexa and Steve discussed the hot real estate market in New Jersey for commercial/industrial properties, which are frequently environmentally impaired and require remediation. This led to an interesting conversation about the use and mechanics of NJDEP’s Deed Notices that get recorded in land records, including a case where a property owner refused to consent to a Deed Notice (Cozzoli Machine Company v. Crown Real Estate Holdings, Inc., Docket No. A-1733-19, App. Div., Dec. 7, 2021). The discussion led into other environmental documents that show up in title searches (including, other deed restrictions, conservation easements and liens), and the potential obligations of sellers and/or lenders to disclose environmental reports.

Next, Mike interviewed counsel Jorge Sanchez about a case recently heard in the Appellate Division and approved for publication, Woodmont Props. v. Twp. of Westampton, 2022 N.J. Super. LEXIS 13, *2 (N.J. App. Div. Feb. 7, 2022). In this published case, the appeals court affirmed the dismissal of a potential purchaser’s claim for a constructive trust as to foreclosed land, finding that the potential purchaser’s claim could not be sustained because a foreclosure and sheriff’s sale extinguished any unrecorded contractual right to purchase the property. The plaintiff, Woodmont had contracted to purchase a piece of land. The contract required that the seller not encumber the Property more than 80% of its value. Woodmont did not record the contract in the County Clerk’s Office. The following week, the seller gave a mortgage on the land to TD Bank to secure a loan, encumbering the property. The seller defaulted on the loan prior to closing with Woodmont, and TD Bank sought foreclosure of the property. Woodmont did not intervene. While the foreclosure was pending, Woodmont entered into a redevelopment agreement with the Township of Westampton, which was terminated by Westampton when Woodmont failed to secure title to the land. The property was eventually sold to TD Bank at a Sheriff’s Sale. Woodmont subsequently filed suit against Westampton and TD Bank, among others, alleging tortious interference and a breach of the redevelopment agreement. Central to the claim was that the TD mortgage lien was more than 80% of the property’s value. The case was dismissed, and Woodmont appealed. On appeal, the appeals court found that the claims against Westampton failed because the redevelopment agreement was conditioned on Woodmont having title to the property, which it did not. As to TD Bank, the Court first found that even if TD Bank knew of the Woodmount contract, it still had a right to foreclose and need not name Woodmont as the contract was not recorded. To rule otherwise would run contrary to N.J.S.A. 2A:50-30, prior case law. The Court warned that those who did not record their interests ran the risk of their property interest being terminated without being named as defendants in a foreclosure. However, the court did find that Woodmont could have a viable claim against TD Bank for tortiously interfering with its contractual rights with the seller if it indeed knew of the contract .

Title Nerds

A Title Insurance Podcast by Riker Danzig

Tag Archives: NJDEP

Season 2, Episode 5

Season 1, Episode 9