Massachusetts Agencies

Effect on Title

Hazardous Waste

In Chicago Title Insurance Company v. Kumar, 24 Mass.App.Ct. 53, 506 N.E.2d 154 (1987) the question before the court was, when there was hazardous material on site, whether its mere existence, before the filing of a lien by the commonwealth, would render the title unmarketable. The court said:

We hold that this condition is not a defect in or lien or encumbrance on the title and that it does not constitute unmarketability of title.

The mere possibility that the Commonwealth may attach a future lien under G.L. c. 21E, 13, as a result of the release of hazardous material (existing but unknown at the time a title insurance policy is issued) when the Commonwealth has neither expended moneys on the property requiring reimbursement nor recorded the necessary statement of claim, is insufficient to create a "defect in or lien or encumbrance on . . . title.

One can hold perfect title to land that is valueless; one can have marketable title to land while the land itself is unmarketable." Hocking v. Title Ins. & Trust Co., 37 Cal. 2d 644, 651 (1951). The presence of hazardous material may affect the market value of the defendant's land, but, on the present record, it does not affect the title to the land.

The case was decided in connection with coverage under a title policy, but the ruling seems to cover the situation of other contractual rights as well.

It would appear that the existence of the oil tank does not affect the quality of the title to the property, although it may have an impact upon its desirability.