Finding Easements Isn’t Easy: The SJC Requires an Expansive Search of the Land Registration SystemPosted: August 24, 2016
How far must one look to identify easements or other encumbrances on registered land in Massachusetts? The Land Registration Act suggests that all answers should lie within the lot’s certificate of title: according to the statute, the holder of a certificate “takes free from all encumbrances except those noted on the certificate,” M.G.L. c. 185, § 46, and the certificate “shall set forth … all particular … easements … to which the land or the owner’s estate is subject,” id. § 47. But, the statute does not tell the whole story, and last fall in Hickey v. Pathways Association, Inc., 472 Mass. 735 (2015), the Supreme Judicial Court (“SJC” or “Court”) confirmed just how far beyond one’s own certificate the search must extend.
As with many Massachusetts easement disputes, Hickey is about access to the beach—Cape Cod Bay in Dennis, in this case. The Hickeys and their neighbors, the Paglias, sought confirmation that only they could use a twenty-foot wide way (the “Way”) that runs between their water-front properties from Shore Drive to the beach. The owners and guests of numerous lots in-land from Shore Drive had been using the Way. Owners of at least 38 in-land lots (the “access-seekers”) were parties to the action; as will be seen, the result has implications for many more lots in the area.
Before proceeding to the details of Hickey, it will be helpful to say a few words about registered land and the typical process for developing a registered-land subdivision. In Massachusetts, land registration is a lengthy, voluntary process of exhaustive title examination (and, potentially, judicial dispute resolution) that results in a guaranteed (and state-insured) confirmation of the owner’s title to the land, which is set forth on a court-issued certificate of title. The “registration case” proceeds in the Land Court, and the tract is initially depicted as a single lot on a court-approved plan referred to as the case’s “A Plan.”
To make a subdivision, the owner creates lots by dividing the tract one sub-area at a time, with each sub-area becoming the subject of its own plan. These later plans, which show individual lots, are designated by sequential letters assigned in chronological order (first the “B Plan,” then the “C Plan,” etc.). When a lot is conveyed, the new owner receives a certificate of title that, at least according to the statute, states all encumbrances on the land.
The registration case in Hickey involved a 217-acre tract. The Paglias’ and Hickeys’ lots and the Way were eventually established by the case’s D Plan and F Plan. The lots were expressly granted rights in the Way when they were created—the issue in Hickey was whether anyone else also had rights. There is no mention of any grant to others of rights in the Way in the Paglias’ and Hickeys’ certificates of title (or those of their predecessors). Under the statute, that would be the end of the story.
Nonetheless, the SJC held that all the access-seekers’ lots enjoyed easements in the Way by applying (and, some would say, expanding) an exception to the statutory rule that it had created in 1994. See Jackson v. Knotts, 418 Mass. 704 (1994). Under that exception, an owner “might take [its] property subject to an easement at the time of purchase … if there were facts described on [its] certificate of title which would prompt a reasonable purchaser to investigate further other certificates of title, documents, or plans in the registration system.” Id. at 711. In Jackson and Hickey, an investigation was required because the lots were in subdivisions, as is very often the case for registered land. The question for investigation is “whether there were facts within the Land Court registration system available to [the owners], at the time of their purchases, which would lead them to discover that [their] property was subject to an encumbrance, even if that encumbrance was not listed on their certificates of title.” Id.
In Jackson, another beach case, the SJC created the exception only to find that it did not apply. The Court looked beyond the silent certificates of the purportedly burdened land to other documents in the registered-land system, as the exception requires, but found no indication in those other documents that the developer intended to convey rights over the disputed access way to anyone else. Id. at 712-13.
The Hickey Court’s application of the Jackson exception yielded the opposite conclusion. The SJC rejected the Hickeys and Paglias’ argument that the required examination was limited to tracing their chains of title back to the D and F Plans that created their lots and back through the deeds by which their lots were conveyed and the resulting title certificates. Those documents showed no grant of any interest in the Way to anyone else. The SJC, however, held that a reasonable search must include much more. Hickey, 472 Mass. at 757-59.
First, the search must go farther back in time and must include documents related to land wholly apart from the land on the D and F Plans. In particular, the Court looked to the B Plan, which earlier had subdivided land on the other side of the 217-acre registered tract. The B Plan created over 225 lots stretching five blocks in-land from the shore, with ways to the beach placed after every third waterfront lot. The B Plan was not referred to in the Paglias’ and Hickeys’ certificates. Nevertheless, it was included in the Court’s required reasonable search. From the B Plan, the SJC stated, the Paglias and Hickeys would have observed the pattern of development in another area of the subdivision and should have inferred that the developer intended a similar pattern in their area, even if there was no indication of other lots on the D and F Plans.
Next, the Court held that a reasonable search must move forward in time from the creation of the Paglia and Hickey lots and the Way (in 1936 and 1944). In doing so, the search must include the title certificates and plans of other lots in the subdivision, at least to the extent the documents were added to the system before the Paglias and Hickeys purchased their lots (in 1994 and 1999). In setting the geographic scope of the examination, the SJC built on its statement in Jackson that, for a lot of registered land bounded by a way, a prospective purchaser “would ‘be expected to examine the certificates of other lot owners in the subdivision to determine whether others might have an interest in the way.’” Hickey, 472 Mass. at 756 (quoting Jackson, 418 Mass. at 712).
Geography-wise, however, Jackson, was a relatively simple case—it involved primarily one subdivision plan covering a limited area and showing all relevant lots. In Hickey, none of the access-seekers’ lots appeared on the Paglias’ D Plan or the Hickeys’ F Plan—they were all created subsequently. The SJC brought them and their respective certificates of title into the search through a series of marginal references linking one plan to another and then to a third and through the fact that one later plan (itself showing over 75 lots) “includes open-ended ways leading into other land of [the developer],” which was ultimately subdivided into over 100 additional lots on yet another plan. Id. at 760. The Court concluded that the Paglias’ and Hickeys’ reasonable searches of documents in the registered-land system should include the separate certificate of title for at least each of the 175-plus lots appearing on those later plans.
Looking at that broad array of title documents, the Court found all the access-seekers were entitled to use the Way, though with slightly different reasoning for two separate groups. The title certificates of the first group granted rights in all the ways appearing on certain plans, and those plans included the disputed Way. The SJC affirmed the Land Court’s conclusion that the first group thus had access rights that a proper search would have revealed. The owners in the second group appeared to be differently situated: their lots were granted rights in ways appearing on a particular plan (the M Plan), which, in the form presented to the Land Court, did not show the Way. Accordingly, the Land Court rejected their claim. In reversing, the SJC gave a further indication of how far a search under the Jackson exception must extend. The Court ruled that a purchaser could not rely on the version of a registered-land plan on file at the county registry, which is where title searches take place. Rather, the SJC took judicial notice of the original M Plan, on file with the land registration office at the Land Court in Boston, which shows a portion of the D and F Plans, including a portion of the Way and the Hickeys’ and Paglias’ lots. Looking at the original M Plan, the SJC concluded that the developers intended to treat the areas shown on the plans “as an interrelated whole” and to grant easements over the Way to all lots. Id. at 761-64.
In sum, Hickey shows that a prospective purchaser undertaking due diligence of registered land cannot rely on the statutory promise that “all encumbrances [will be] noted on the certificate [of title].” M.G.L. c. 185, § 46. Rather, the purchaser must be prepared for an extensive (and expensive) review of potentially hundreds certificates of title to other lots and dozens of plans (including original versions located only in Boston) to determine whether anyone else shares rights in the land.
Bruce Barnett is Of Counsel at DLA Piper, where he concentrates his practice on resolving complex business disputes for clients in state and federal courts and in arbitration, as well as on assisting the firm’s clients with bankruptcy and regulatory matters.