Have you ever seen a developer buy out and flatten a bunch of individual houses or buildings and put up one giant development in their place?
This often happens when the character of a neighborhood changes from a quiet-residential or a demure set of family businesses into a trading hub. This is easy enough and even profitable for contractors and the local economy, but it poses many legal challenges.
Combining smaller lots into one real estate development requires a Unity of Title. Learn more about how this works and why the law needs it in this quick guide.
Unity of Title
To an owner or property developer, a Unity of Title is like a special agreement with the local municipality. When the developer or owner has two or more distinct lots they want to use for one real estate development, they enter into a written agreement with the local municipality.
In this document, the owner agrees not to sell or lease the original lots as separate units. Instead, each tenant in the building or set of buildings will have an equal, undivided interest in the development.
Most jurisdictions also require an opinion of title as a foundation for the Unity of Title process.
Opinion of Title
An opinion of title isn’t what the real estate lawyer thinks about the place. Instead, it’s a very detailed and comprehensive breakdown of all the legal matters related to the lots the developer or owner wants to unify. This process ensures no mortgages, special exceptions, or easements on any of the properties.
How the Process Works
First, a real estate attorney has to get the deeds of all the properties to be unified. These will help them prepare an opinion of title and see if the development is legal in that area. The completed opinion of title will then be bundled with proof of tax payments, deeds, and any other information the locality requires.
Then, you’ll need to complete a particular Unity of Title form or agreement. These vary between municipalities and states, but they’re all essentially the same promise not to split the use of the properties. Many municipalities require both steps to be completed before they approve building plans.
Why Is There All This Hassle?
The Unity of Title process is really a convention of property law to stop people from fighting with each other or the property’s owner(s). Since all tenants have the same (undivided) rights to the entire development, you don’t need a court to impose easements or resolve disputes. It also allows the owners to establish true joint tenancy in cases where owners may have initially paid unequal amounts for the properties.
Property Law: A Fundamental Thing No One Talks About
The real estate market is always open to innovative new developments. However, if you want to combine smaller lots into one development, you must go through the Unity of Title process.
The Unity of Title process helps the local municipality see when land is being used in a new way. It also has distinct legal benefits for owners and renters of that development, including true joint tenancy.
Unity of Title is a small part of a large body of property law that you interact with every day. Gain more useful knowledge by exploring the rest of our blog.
