Frimberger v. Anzellotti

Connecticut Appellate Court · Property

PropertyEncumbrancesWarranty DeedsInnocent MisrepresentationMarketable TitleLand Use Violationscovenant against encumbranceswarranty deed

Facts

The defendant's predecessor filled part of waterfront property adjacent to tidal wetlands and built a bulkhead without obtaining a permit. The defendant later conveyed the property to the plaintiff by warranty deed free and clear of encumbrances, subject to listed restrictions of record. After the plaintiff sought to repair and improve the bulkhead area, the Department of Environmental Protection indicated that the fill and bulkhead, and possibly part of the house, encroached on tidal wetlands and suggested that the plaintiff submit an application to correct the violation. The plaintiff did not file that application, and the agency had taken no official action compelling compliance by the time of trial.

Issue

Does a latent violation of a wetlands or other land use statute existing at the time of conveyance constitute an encumbrance that breaches the covenant against encumbrances in a warranty deed? If not, can the deed warranty itself serve as the material misrepresentation supporting a claim of innocent misrepresentation?

Rule

An encumbrance is a right or interest in land held by a third person that diminishes value while remaining consistent with passage of the fee, and the covenant against encumbrances is breached only by encumbrances existing at the time of conveyance. Latent violations of state or municipal land use regulations that are not on the land records, are unknown to the seller, have not prompted official enforcement action compelling compliance at the time of conveyance, and have not ripened into a recordable interest do not constitute encumbrances for purposes of the deed warranty. To render title unmarketable, the defect must present a real and substantial probability of litigation or loss at the time of conveyance.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Savannah, Georgia, Nina Lopez sold a waterfront lot to Daniel Price by warranty deed stating the land was free of encumbrances except easements of record. Unknown to both parties, a prior owner had placed riprap within a protected marsh setback without a permit, and no agency had issued any citation, order, or notice before closing.

If Daniel later discovers the setback violation and sues Nina for breach of the covenant against encumbrances, what is the best result?

Explanation. The majority held that the covenant against encumbrances is breached only by an encumbrance existing at conveyance, meaning a third-party right or interest in land that diminishes value while remaining consistent with transfer of the fee. A latent land-use or environmental violation that is unknown to the seller, not on the land records, and not the subject of official action compelling compliance has not ripened into such an interest and is not an encumbrance.