A recent Virginia decision highlights the need for complete research and the dangers of relying exclusively on title searches. In Oliver v. Loudoun County: 85 Va. Cir. 15 (2011), the court considered whether restrictive covenants were enforceable against a developer of a proposed residential, single-family subdivision. Permits approved by the county and representations by the developer consistently demonstrated intent to create a residential scheme for the proposed subdivision. When the developer later attempted to sell two lots to the county for a fire station, residents objected and ultimately prevailed.
Attorneys for the county insisted that no common scheme existed because a title search failed to disclose a recorded document including the purported restrictions. Judge McCahill rejected this argument: “The County's expert, Robert Gordon, relied heavily on the fact that the title search did not reveal a restriction; however, the title search itself is not a safe haven. If there was a restriction on the record, then there would be no need for an equitable servitude.” The court also concluded that the lack of zoning restrictions relied on by the county did not supersede the enforcement of the equitable servitude.
Title searches are only as good as the individuals providing them. I am aware of one specific instance where two separate title searches failed to find three relevant deeds that were properly recorded and linked to the relevant chains of title. Land use professionals should be prepared to check any research supplied by a third party.
(updated June 9, 2019)
