To determine whether severed improvements are real or personal property, the agent must thoroughly review the instruments creating the interest for the intention of the parties involved. Documentation must not only properly describe the improvements, title to which is being or has been constructively severed from that of the land, but must also provide an assurance that the building and improvements “are and shall remain real property”. The agent must also obtain written verification that it is the intention of the parties that the improvements are not to be physically removed from the land to which they are affixed, and there are no “side agreements” to the contrary.
The agent should also make an exception for any easements for access, maintenance, use, and support of such buildings and improvements which, although not necessarily constructed, may be implied by the separate estate or interests created by the severance.
Easement created by express grant or reservation:
“Easement for the access, maintenance, use and support of buildings and improvements situated on and excepted from the land described herein, as may be implied from the severance of the title to buildings and improvements (GRANTED TO/EXCEPTED BY)____,in document recorded_____.”
Easement created by implication:
“Such easements or other rights for the access, maintenance, use and support of buildings and improvements situated on and excepted from the land described herein, as may be implied from the severance of the title to buildings and improvements (GRANTED BY/EXCEPTED BY) ____, document recorded ______.”
When insuring several improvements, exception should be noted to the terms and provisions of the ground lease. With severed improvements it is always required that the improvements be supported by a ground lease. Otherwise, the improvements would encroach onto the land in which they are located. All severed improvement transactions must be submitted to Agents National Title underwriting counsel along with the Company’s Policy Authorization request (for unusual underwriting risks).