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Lawsuit raises Florida land-title issues impacting building projects

Plaintiffs asked the court to reform or amend the deed to disputed property in their favor, among other claims.

Nothing quite puts a hot building project on ice like the discovery of a possible defect in title to underlying land, bringing construction plans to a screeching halt. Recently, in August 2017, a married couple filed a lawsuit over title problems in Gulfport, Florida, waterfront land they had purchased to build a new home after having obtained a title insurance policy.

After investing on architectural design and surveys, they secured financing and arranged for a builder.

Permitting and title problems

Unexpectedly, the city then denied their building permit because the title to so-called prefilled land between their border and the seawall was not theirs. Title to such strips of land that were prefilled with sand by the state of Florida normally vested in the state. In this case, the state allegedly sold the strip in question to a private company in the 1920s. It has reportedly since been sold to several other companies in succession after a transfer from the original company.

Setback issues

According to the complaint, the problem was with the city's water setback requirement for structure erection. Gulfport would not approve a variance because it measured the 25-foot setback from the lot line, not from the shoreline and not over the prefilled strip, which would normally be owned by the state. The architectural plan had instead been based on measuring the setback from the waterline.

When the plaintiffs asked the Board of the Trustees of the Internal Improvement Trust Fund, the governmental body that controls the prefilled land strips, for possession of that strip, the couple found out about the state's 1921 conveyance to private ownership.

The lawsuit

The parties sued include:

  • The direct seller of the property
  • The company, now defunct, that bought the parcel from the state in 1921
  • Two subsequent companies that owned the parcel, also defunct
  • The construction lender

The lawsuit alleges three claims:

  • Quiet title: When title of property is unclear or clouded or there is question about who legally owns property, asking a court to quiet title is a request that the court determine and declare appropriate ownership. In the Gulfport suit, plaintiffs asked the court to enter judgment that they "are entitled to the sole and exclusive interest of the Property, including the pre-filled lands to the water's edge ..." and that they "have good fee simple title to the land cleared of all clouds and encumbrances."
  • Declaratory action: A plaintiff may ask a court to determine rights as between parties to a controversy. Here, plaintiffs ask the court to find that they have "sole and exclusive interest ... including all pre-filled lands ..."
  • Deed reformation: A party may ask a court to reform a deed by modifying it to reflect who owns the property based on fairness and mutual mistake. Here, plaintiffs point to two mistakes: that neither the parties to the property sale nor the title company knew of the 1921 deed. The couple asks the court to reform the deed to say that they own the prefilled lands.

The eventual resolution of this case will be of interest to Floridians involved with real estate issues.

Florida real estate transactions can be extremely complicated from a legal standpoint, especially when they concern waterfront land like that on inland waterways or directly on the Gulf or Atlantic. Disputes about title defects, title insurance, property ownership, setbacks, boundaries, construction and sales contracts, and more require review and advice from an experienced property lawyer.

Destin real estate lawyers at Ward & Ketchersid, P.A., advise Floridians and out-of-state clients throughout the Panhandle.