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Our office is the only office in Dane County and one of the few title companies in the state which supplies reports for current or former railroad-owned properties based upon the railroad records held at the office of the State of Wisconsin, Department of Financial Institutions. Why is this significant?
Wisconsin Stats. §190.11(1) provides that “Every conveyance or lease, deed of trust, mortgage or satisfaction thereof made by any railroad corporation …shall be filed with department of financial institutions…”. In addition, Wis. Stats. §190.11(2) indicates that such filings have the same effect and provide the same notice of rights and interest as to any property in the state as though the document had been filed in the office of the Register of Deeds for the particular county or counties in which the property is located. Therefore, if you are dealing with a parcel of real estate for which title had been or is currently held by a railroad company, a review of the railroad records at the State of Wisconsin, Department of Financial Institutions is necessary in order obtain a complete understanding of the title for the premises. Keep in mind that the records at the Department of Financial Institutions cover railroad-owned property not just in Dane County but throughout the entire state.
As an example: the former Nakoma Shopping Center lands in the City of Madison include a strip of land along the west side which was formerly part of the railroad corridor owned by the Illinois Central Railroad Company. The railroad land was originally acquired by from private landholders in 1887 by the Chicago, Madison and Northern Railroad, which through subsequent corporate mergers and acquisitions, became a part of the Illinois Central. In 1971 the Illinois Central conveyed title to the strip to a group of individuals doing business as Brunsell Brothers Lumber & Millwork Company, with subsequent conveyances down to the present-day titleholder. As a result of this history, any party researching title to the premises must use two data sources: the records at the office of the Register of Deeds for Dane County for the period subsequent to 1971 and the railroad records at the Department of Financial Institutions for the pre-1971 period.
In addition to having a separate depository for their real estate instruments, railroad companies also enjoy a unique situation with respect to tax records. Local tax bills may not include property owned by railroad companies; however, even if not on the local assessment rolls, railroad property is nevertheless taxable by the state Department of Revenue. As a result, this state office must be checked in order to verify the tax status for any railroad company if the property in question is railroad-owned.
Being situated in Madison, our office is the only title company whose personnel search these state offices on a regular basis in order to prepare reports relating to railroad-owned property. Our Railroad Report provides the following information for customers:
1) an abstract of the chain of documents related to the initial railroad entity (as identified for us) and its corporate descendants as found in the Department of Financial Institutions, together with a copy of the most recent document(s) related to the current railroad name.
2) copies of unsatisfied mortgage(s), UCC’s, lien, easements/restrictions, etc. as found in the Department of Financial Institutions’ records.
3) a check of the payment status of railroad taxes at the Department of Revenue.
The indices for the railroad records at the Department of Financial Institutions are grantor/grantee based. Unlike documents filed at the local county Register of Deeds office, the railroad documents often do not have specific legal descriptions but instead describe property locations by reference to particular railroad mile markers. As a result, a search of the Department of Financial Institutions railroad indices is more easily started if our office is provided with a copy of a recorded deed or other document referencing the first railroad name so that the correct chain of railroad entities can be followed for the search. Likewise, our railroad search can proceed more swiftly if we are provided with a copy of the tax roll information for the railroad property and a map or survey of the premises, ideally with a quarter-quarter section reference. Having such mapping in hands allows us to compare the information for the premises with the railroad right-of-way maps at the Department of Financial Institutions.
Pricing for each Railroad Report will vary depending upon the amount and type of information which is provided to start our search. Please call (608-271-2800) for a quote.
On June 24th the Wisconsin Office of the Commissioner of Insurance (OCI) issued a bulletin warning title insurance companies against the use of “blanket exceptions” in policy forms for owners and non-lenders. These types of exceptions exclude from coverage various common encumbrances such as recorded covenants, restrictions and easements that can be discovered by a search of the public records. Although the language may vary slightly, the typical “blanket exception” reads: Covenants, conditions, and restrictions, if any, affecting title which appear in the public records; easements or servitudes, if any, which appear in the public records or are shown on any recorded plat or certified survey map; reservations of mineral or mineral rights, if any, appearing in the public land records. Oftentimes this exception is utilized when a title company, in an attempt to reduce costs, has conducted a search only from the current vesting deed forward and has not gone backwards on the search to identify all of the encumbrances which may affect the title to a premises. As the OCI pointed out in its bulletin, title insurance policies normally exclude encumbrances that CANNOT be discovered through a search of the public records. The addition of a “blanket exception” regarding matters that COULD be discovered through a search of the public records would in leave in the OCI’s words, “…little to no coverage for the consumer and does not warn the consumer that the title they are purchasing may have defects. This conflicts with the essential purpose of providing title insurance coverage.” As a result, the OCI has warned title companies that use of this kind of “blanket exception” is not permissible and may result in enforcement action. As noted in the bulletin, title companies can continue to list exceptions for specific encumbrances found through a public records search. The warning on “blanket exceptions” applies to owners policies and would not affect loan policies. We are happy to report for our customers that Dane County Title Company does not and will not utilize a “blanket exception” in policies for owners and non-lenders. We pride ourselves on producing a quality product–the shortcut in research that the “blanket exception” represents does not meet those standards. In addition, as the only title company in Dane County with a complete set of records from 1846 forward, we have no need to loosen our search and examination procedures. Because this type of product has been utilized in our market by our competitors, Dane County Title Company urges consumers to review their title commitment before any closing to determine if this type of “blanket exception” is shown and if it is, that they require the title company to delete the exception and replace it with separately enumerated exceptions for specific encumbrances on title. Should consumers have questions about this or any other aspect of their title insurance product, feel free to contact the trained professionals on our staff. They are always eager to help customers fully understand their title insurance coverage.
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