Navigating Title Insurance for Submerged Lands and Shorelines

Arial view of adjacent lakefront properties

Lakes, Rivers and Oceans, Oh My!

Insuring title to real estate property with a boundary line against (or especially within) a body of water is an extra-hazardous risk. A title agent without the benefit of a coastal market or presence may come across a property on a river or lake for the first time and wonder what new title concerns await them under the water. Their sellers and buyers may presume that the property includes the bed of the lake or river that gives their property visual appeal or a resource to use. This is not always the case, and careful analysis is needed to determine what may be covered in the title policies.

Depending on the body of water at issue, consideration may need to be given to federal law as well as state law to determine ownership and property rights related to the bed or shoreline.

The first question is whether the body of water can be considered navigable waters susceptible to use in interstate or foreign commerce. This would create riparian (where land meets a body of water) or water rights in the United States government as well as certain state government rights. An ocean or gulf would seem to be a given, but rivers, lakes and even streams could fall within this category.

Secondly, state law may rely on several different factors to determine who owns the bed or shoreline of a body of water. This may be based on the low- or high-tide mark, the volume of the flow of water or even on recorded reservations of rights as to beds of natural and even man-made bodies of water. Rivers and lakes serving as the boundaries of different states also tend to have volumes of case law devoted to disputes between state governments as to the ownership of the beds and shorelines.

The third question relates to covenants, conditions and restrictions (CCR) of communities benefitted with a body of water and how those may dictate ownership or water rights. CCRs may even dictate who has access across the land to access the body of water.

For the most part, these issues can be dealt with by simply using a riparian/water rights exception tailored to the specific property and accepted by your Stewart underwriter. In some instances, that exception may be a “one-liner,” but it may also contain a few short paragraphs covering everything from surface easements to rights of differing levels of government. It is important to identify the risks that may come into play with waterfront properties and address them. Reach out to your Stewart underwriter and let us help you analyze the issues and protect your customers.