We're looking to purchase a piece of vacant land and the lawyer who drew up the purchase agreement has the title insurance policy clause as "with standard exceptions".

In my home buying experience I've never encountered this as the purchases offers have always been written as "no exceptions"

I've read up on this and it looks like it is in regards to 1) encroachments, shortages, conflicts, etc. 2) interests not shown in public record, but a survey can put to rest. 3) easments, liens not shown in public record. 4) services rendered liens.

I'm not really concerned about 1, and 4 as it's vacant land surrounded by vacant land. 2 and 3 I'm a bit concerned about as there is a power line easment across it, and the purchase agreement mentions nothing about mineral rights. The owner has told me he doesn't want the mineral rights, and that they have the purchase agreement from when their father bought it and it came with mineral rights. I'm afraid if I don't get a no title exception I could find out later someone else had them all along.

My question is what do I do to make sure that its good to go once I receive it. I've asked for a no exception title policy, and I'm waiting to hear back on what they say, but wanted to check in with the brain trust here first.

Will a no exceptions title policy ensure I have mineral rights?

Can I have a standard exceptions policy and mineral rights are still transferred to me via the agreement?

A little background. This is in Michigan, and was a FSBO property where the owner died and his heir is selling it. Their lawyer drew up the purchase agreement and I reviewed it and this was my only real sticking point along with no mention of mineral rights.

Any input is appreciated.

I'll bet when you bring it to their attention they will add min rts in your contract.

Title Insurance companies will show matters of record. Standard exclusions contained in the Commitment are standard throughout the industry.

As far as your assumed mineral rights question goes, the answer is no. If there is something of record regarding mineral rights and the subject property, then that would be shown as an exception. Many title companies will not show beneficial matters however.

When you acquire an interest in real property, you take your title subject to all interests that you have actual notice of, and any which would be disclosed by a search of the public records pertaining to title to land.

Actual notice is what you see, or should see by inspecting the property, that anyone using the property. Let’s say there is a driveway crossing the property, just parallel tire tracks. You need to know where it goes and who uses it and for how long, etc. Interests shown in the public records impart constructive notice, i.e., you are deemed to know whether you actually do or not.

This clause in the purchase agreement defines what title the seller is obligated to deliver at closing.

A title search preparatory to insuring title upon closing should be required, so you can inspect the report and object if anything onerous is found. I don’t know what policy form is in use in Michigan. You need to read and understand that, or someone working for you. It will have standard exclusions and exceptions, perhaps in the wording you recite.

You should also have a survey done and verify with your own eyeballs that proper boundary markers are set. Once that is completed, you can see if there are any visible encroachments or unexplained uses going on you need to concern yourself with. You can judge whether the property is where they think it is, is the size represented, free of encroachments, etc. Don’t laugh. I handled a boundary dispute years ago where, thanks to a lost US government survey marker and sloppy description of the “property”, there was no property when that lost marker was discovered.

So, items 1 and 2 can be taken care of by a survey, which I highly recommend. No. 3... If they are not discoverable on the ground or in the public record and you have no actual knowledge of them, they will no affect your title.

No. 4 I take it is for mechanics lien, work done on or to improve the property. Demand the seller provide an affidavit that there had been no such work authorized by him or anyone on his behalf in the last xxx days whatever the statutory periods are in Michigan.

I’m not a lawyer anymore, but I was for 40 years, served as senior counsel at two major title insurers for a couple of terms and worked my way through law school as a title searcher.

Edit to add the last bit about items.

This message has been edited. Last edited by: JALLEN,