April 2022

Protecting Your Real Estate Investment

Leave a Comment / Property Purchase Process / By Sean Bukowski

It is possible for thieves to file fraudulent deeds and attempt to sel property they do not own through a fake property sale.
That’s why it is so important for buyers to purchase title insurance when buying commercial or residential property.
In our title attorney business, we work with a local title company to provide title services to buyers and sellers of commercial property and hopefully protect their investment from frauds like this.

I had a conference this past weekend to attend in Dallas. There were good speakers but – like with any conference – I found myself drifting to my phone every once in a while to read some internet articles. And while doing, I read a few about folks scamming property owners with fraudulent deeds. Obviously as a real estate attorney this interests me but we also had a client recently who thought something similar happened to them.

I don’t want to be the local evening news and scare monger in this article (“SCAMMERS ARE COMING FOR YOUR PROPERTY! TUNE IN TO SEE HOW YOU CAN PROTECT YOURSELF!). But these scams do sometimes happen. And when they do, they can be a significant nuisance. As property owners, therefore, we have to take precautions to protect our investment.

And that’s where title insurance comes in. I know some folks hate it and hate the cost. But it really is important. So what are these scams? And how can title insurance protect your property? That’s what we talk about this week.

Beware the Fraudulent Deed Scam

The people who commit the fraudulent deed scam are trying to steal your money. The basic premise is that they forge a deed (often a quitclaim) allegedly transferring the property from the current owner to them. They then file that fraudulent deed with the county clerk. At that point, the thief may try to sell the property to a third party while showing they have a deed to the party in the county property records.

This is, obviously, a big problem for the potential buyer. If not caught, the buyer could pay a lot of money for what he thinks is a property investment. Then, after closing, he does not have any rights in the property because the thief had nothing to sell except lies.

Title Insurance can Protect Your Investment from Scams

This is where title insurance comes in to help protect you. A basic title insurance policy:

Should alert you if you are buying a property from a fraudulent seller; but
If the title company misses the fraudulent deed, reimburse you for your lost investment.

It is, of course, important to read your title commitment thoroughly prior to closing because there could be exclusions to the coverage. But assuming you have normal, full coverage, a title insurance policy can protect you against buying from a fraudulent seller.

Key to Finding a Good Title Company

There is little doubt, therefore, that title insurance is a must purchase when buying a new property. Its equally important to work with a title company and escrow agent that will provide the coverage that you need.

First, you want to make sure you and/or your lawyer have read and understand the title commitment (pre-cursor to the actual policy) prior to close. As I wrote above, there can be exclusions to the policy and its very important to understand what those may be.

Second, you want a title company that understands how important it is to get the deal closed. To be a good closer, its vital to fully understand the Texas Department of Insurance Rules. But if the buyer or seller needs something the TDI rules do not allow, a good closer will also help find a solution that satisfies all of the parties. Because at the end of the day, making sure the deal closes is very important to both the buyer and the seller.

As title fee attorneys at Bukowski Law Firm, we understand how important it is both for the parties to be protected and to get the deal closed. We pride ourselves on providing the best title and escrow services around. We would love, therefore, to help you close your next deal.

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All Ideas are Welcome

Leave a Comment / Social Issues of Central Texas / By Sean Bukowski

Late last summer, Austin started tearing down homeless encampments and dispersing the people who were staying there.
But Austin does not have enough beds to house all of the folks experiencing homelessness in Austin.
Hopefully some corporate citizens can come up with creative solutions to help those who are most in need.

This week I want to revisit a topic that we have not talked about in a while – Austin’s homelessness issues. I’ll explain later in the article why this topic is in my mind this week. But, if you recall, the last time we checked in, Austin had a serious problem with homeless encampments all around the city. And then the voters elected to once again outlaw camping on public grounds. It was something I advocated for because having homeless encampments all around the city is not a good and feasible long-term solution to homelessness.

But the correction always came with one big issue – once the homeless folks are forcibly removed from their encampments, where are they going to go? It’s a question that I do not think we, as Austin citizens, have been prepared enough to answer. But its too important a question to just ignore. So this week I am writing about what potential solutions Austin has put forward and then maybe some outside solutions that got me thinking about this issue again.

Where Have all the Homeless Folks Gone?

It was late last summer or early fall when the City started breaking down the homeless encampments and moving people out of them. At that point, the homeless folks were no longer allowed to camp on public grounds and had to go somewhere else.

The Austin homeless population is estimated to be about 3000 people. Unfortunately, we just currently do not have enough beds to house that many people on a regular basis. As a result, there are many fellow citizens who are sleeping on the streets at night.

There are, of course, multiple potential solutions that exist. While these groups are all undoubtedly doing their best, combined these efforts still do not fulfill all the demand there is for housing. These options include –

ARCH – The ARCH building downtown at 7^th and Neches is run by Front Steps. They can serve about 200-300 people per day and have about 190 beds for overnight stays.
Other housing options – Other places around the city like the Austin Shelter for Women and Children, Casa Marianell, and Lifeworks all house folks experiencing homelessness.
Hotel Purchases – The City has purchased a few hotels to convert into lodging for homeless folks. Each one will house about 20 people when completed.
Encampments – There are still some encampments that pop up throughout the city. And eventually they are torn down.
Developers – Some developers have worked with the city to help house some folks experiencing homelessness.

Despite the effort of these great groups, we still do not have enough housing to meet the needs of everyone who is currently on the streets.

Potential Corporate Solutions to Homelessness

So now I will tell you why this topic came to mind when I was debating what to write about this week. Elon Musk has been in the news a lot lately. It seems like that is always the case, doesn’t it? As you probably know, he acquired about 9% of the outstanding stock of twitter. And then briefly flirted with joining the Twitter board and buying out the rest of Twitter’s stock.

During this time, he was tweeting a lot, as you can expect. And in one of the tweets he suggested closing Twitter’s headquarters – since, as he wrote, nobody goes there anyway – and turning it into a homeless shelter.

Shortly thereafter, Jeff Bezos responded that Amazon had done something similar in Seattle. And in addition to housing a number of folks previously experiencing homelessness, having the housing on Amazon’s campus made it easy for employees to volunteer at the shelter.*

I am embarrassed to admit that Amazon opened this almost two years ago and I had no idea. But I am fascinated by the idea. I am sure there are some unintended consequences of this – and Bezos hasn’t escaped all criticism. But I find the criticism – at least in that article – to be unconvincing.

Amazon and Bezos are doing something in Seattle to try to help house people who are experiencing homelessness. They should be commended for doing it. And I hope they – and all the other CEOs and companies moving to Austin, including Elon Musk – will follow his lead and come up with creative solutions to help our citizens who most need it.

*I’ve written previously about the return of the corporate town. And every time I see a Google or Meta or Amazon office, it appears that we get closer and closer to that reality. But that’s an article I will revisit later.

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Leavin’ on a Jet Plane

Leave a Comment / Social Issues of Central Texas / By Sean Bukowski

There have been a lot of reports lately of chaos at the Austin airport.
This includes long lines, labor shortages, and canceled flights.
Unfortunately, these issues are likely to continue for a while at certain times of the week.

A couple of weeks ago, I wrote about the much needed expansion of the Austin airport (“ABIA”). If you recall, under Project 2040, the plan is to build a new, additional terminal and expand and renovate the existing one. This expansion will increase ABIA’s capacity from 34 gates to at least 66.

As I wrote at the time, there is no doubt we need this. My friend Greg Anderson recently showed me a projection from the US Census Bureau that predicts the Austin metropolitan statistical area (“MSA”) will have approximately 5.3 million residents by 2050. So the current 34 gates are just not going to be sufficient.

Well since I wrote that article, there has been a lot of new excitement at ABIA. And it has not been the good kind of excitement. This week, therefore, I am writing about what’s going on at ABIA.

The Austin Airport has Significant Congestion

You may already know what I am going to write about as this has been in the news a lot lately. But ABIA has seen some incredible backups and shortages lately. Indeed, in the last week, there have been reports of:

Security lines that stretch outside the airport’s doors and down the block. Some reports have these lines taking three hours to get through.
People leaving rental cars on the side of the road and walking to the terminal because the car lanes are so backed up.
An excessive number of cancelled flights.
A shortage of fuel for incoming and outgoing flights.

I am sure you can imagine, therefore, there seems to have been a lot of chaos and unhappy travelers and workers recently at ABIA.

What is the Cause of the ABIA Chaos?

Obviously nobody wants to see these kinds of issues derail an important airport. And there is no doubt that ABIA is trying to solve these issues. But what needs to be fixed? What’s causing this? There are a few contributing factors:

Overcrowding – I talked about this in the previous article, but Austin is booming. And the current size of the airport is just not sufficient. And its not just the current residents – Austin has tons of tourists come through for festivals and concerts, etc. That’s one reason why the trouble has been centered around early morning flights on Monday and Tuesday. Its an incredibly busy time and ABIA is just not equipped for that kind of capacity.
Labor shortages – ABIA Executive Director Jacqueline Yaft asked for additional TSA agents weeks ago. But TSA apparently does not have the agents to spare. It has a labor shortage and, as a result, does not have enough TSA agents to fulfill ABIA’s needs. That will, obviously, lead to longer security lines.*
Tank Farm – ABIA is trying to solve its fuel needs by building extra fuel storage tanks on land near the airport. But according to Jack Craver’s email blog, the neighborhood groups are fighting this. As a result, approval for that storage area is currently held up at city council.

Combining all of these issues has lead to the big problems ABIA is currently facing – and will continue to face.

What is Next for ABIA?

So what do we do now? How do we continue to get flights to and from Austin?

First, I want to make clear that the airport is not always a disaster. As far as I can tell from the reports, the crazy times really are focused around early morning – especially at the beginning of the week. At other times, the airport is running normally.

But ABIA officials have warned that they do not expect the busy days and peak hour long lines to end any time soon. That’s why the 2040 Project is so essential. The quicker we can get the additional gates to meet the growing capacity, the better. And lets hope that TSA can find a way to reduce its labor shortage and get ABIA the number of agents it needs.

Until then … well I certainly do not want to tell you to join CLEAR and TSA Precheck. Because that’s only going to make my lines longer.

*After writing this, TSA announced it was sending 15 new agents to Austin. So that’s obviously good news.

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I Can’t Get Home

Leave a Comment / Property Disputes / By Sean Bukowski

If you own land that does not have access to a public road, there are ways to get an easement over neighboring land to provide you access.
An easement by necessity will only be granted if you can fulfill a three-prong test prescribed by the courts.
To get an easement by necessity, you will likely have to resort to litigation.

Sometimes when I am thinking of things to write about in this blog, I hit a wall and cannot come up with any good thoughts. Its then I must go searching for some interesting ideas. That’s a short way to ask you not to judge me when I tell you I was reading a summary of a real estate decision from the Idaho Supreme Court this week when I had an idea of what to write about.*

The case was about some locked in land to which the property owner did not have access. And that got me thinking of how that is treated here in Texas. We have dealt with some similar issues for some of our clients previously. So that’s what I am writing about this week – how do you get to property for which there is no easy access?

What is an Easement?

I do not want to bore you with a law school lecture but to explain what happens to your landlocked parcel, we first need to understand what an easement is. An easement is a property right in land that is separate from the title ownership. It gives the dominant estate (easement holder) the right to access over the servient estate (the land owner) for a specific purpose.

The most common form of this is the utility easement. So if I own three acres of land (for example), I likely want to give Austin Energy an easement to install electricity lines so that I can have electricity on my property.

This is important when you have land that does not have access to a public road. I know that is weird to think of for us city folk. But it is not uncommon in rural areas.

How do You get to Land if there is No Access?

In Texas, therefore, what do you do if you do not have access to your land through any public roads? That is where an easement comes in. You are going to need to get an easement across someone else’s property to access your land. There are basically four types of easements that could potentially help:

Agreed easement;
Prescriptive easement;
Easement by estoppel; and
Easement by necessity.

Eventually I will try to talk about all of these individually. But this is a relatively short blog and I don’t want to completely bore you. So this week we are only going to talk about the last one – an easement by necessity.

An Easement by Necessity Can Help You Access Your Land

If you do not have access to a public roadway from your land and you do not have an express easement over a neighboring property, you may be able to get an easement by necessity. A court can grant you an easement over someone else’s property because it’s the only possible way to access your property.

To get an easement by necessity, you must demonstrate –

Original unity of property of your landlocked property and the property over which you are seeking the easement;
The claimed easement is a necessity to access your land; and
The necessity existed at the time the property was severed from the purported servient estate.

You must prove all three of these to be able to convince a court to grant you an easement by necessity. See Hamrick v. Ward, 446 S.W.3d 377 (Tex. 2014).

Easement by Necessity Can Lead to Dispute

We have dealt with this situation multiple times on behalf of our clients in the past. And every time we have to deal with it, it inevitably leads to a dispute between the neighboring property owners.

The best course, therefore, is to try to come to an agreement with your neighbor granting you an express easement to access your land. But if you cannot come to an agreement, you do have the possibility of getting an easement by necessity. Though we will likely have to go to litigation to get a court to grant you that easement.

*This is not a normal thing for me. I was just depressed from Michigan’s loss in the NCAA tournament and was trying to avoid sports.

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