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 Post subject: Railroad Real Estate Legal "Basics"
PostPosted: Sat Apr 06, 2013 5:53 am 

Joined: Sun Aug 22, 2004 7:37 pm
Posts: 298
One of the most frequently asked questions I get as a Railroad Archivist is about railroad real estate and the law. While I don't dispense legal advice, I usually reccomend that they seek out the services of a real estate lawyer with experience in this area. But it would help to know the basics. Usually the questions I get are from land owners who own some property along either an active or abandoned railroad right-of-way or own an abandoned railroad bed, and are trying to verify ownership, or if they have any rights to a claim. I probably know just enough to be 'dangerous' but thought perhaps others who frequent this board might benefit from this exchange of information.

Does anybody know of an on-line primer or a published source that provides some context or explanation of railroad real estate law (with defined terms such as "quit claim", "deed", "reversion" and so forth)?


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 Post subject: Re: Railroad Real Estate Legal "Basics"
PostPosted: Sat Apr 06, 2013 12:08 pm 

Joined: Mon Aug 23, 2004 3:01 pm
Posts: 1755
Location: SouthEast Pennsylvania
I would also suggest the definitions of "eminent domain", "condemnation", "adverse possession", "easement", "right of way", etc.
Jimmy McHugh told of someone who purchased land outside of New Hope, Pa. form someone who had owned it back before the New Hope & Ivyland RR had been built. Their new deed, copied form the old one, showed that they owned continuously from one side of the tracks to the other, and made no mention of a railroad dividing the property or anything being sold to it. Jimmy replied that the North East Pennsylvania RR had acquired its way across that parcel by condemnation, although he didn't say how much of a right or title it got, just how wide. It may have only been granted an easement or right to use and cross the land, but not actual ownership, which might have remained with the original land owner.
Railroad engineering books advise that if a railroad ever buys additional land outright when they already have an easement over other land owned by that seller, to try to include the land under the easement in the purchase as well.


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 Post subject: Re: Railroad Real Estate Legal "Basics"
PostPosted: Sun Apr 07, 2013 4:05 am 

Joined: Sun Aug 22, 2004 8:51 pm
Posts: 2055
Location: Southern California
Kurt,

These types of inquiries are often handled by professional surveyors. In turn it may involve title search companies and lawyers experienced with land, title and easement statutes and case laws.

I would suggest that you present your inquiry to the professional surveyors' association in your state.

A resource for finding such organizations can be found on one of the webpages at the website of Professional Surveyor Magazine. Use the resource tab and select resource map. Here is a direct link to the resource map.

Since you are in Pennsylvania you can consider presenting your inquiry to:
Pennsylvania Society of Land Surveyors

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 Post subject: Re: Railroad Real Estate Legal "Basics"
PostPosted: Sun Apr 07, 2013 11:31 pm 

Joined: Thu Nov 22, 2007 5:46 am
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Location: S.F. Bay Area
Oh boy here we go. I am not a lawyer and I don't need to be, because the vast majority of relevant law is not in the law books. It's on the deeds.

Deeds, recorded easements etc. are public documents, haul down to the courthouse and have a looksy. You need a little vocabulary here.

Deeds are recorded. Recorded in big books called "liber". It means "book". Books are numbered and so is each actual page.

The Liber number identifies a deed or other document. Your deed might be Liber 1582 Page 844". That is how deeds are named. Rarely mentioned is the county name. That Liber# is only good in that county.

Tax parcel IDs are the numbering system used to identify land proper. They are assigned by the county, and the format can be somewhat arbitrary by county, but expect 10-15 digits. There's lots of slack in this namespace to allow for subdividing. Here's one: CL6-108-2380-00 Here's another: 0043-C-00250-0000-01. Again the county name is rarely mentioned but it's essential.

Street address needs no introduction. Trouble is we are often dealing with land that doesn't have a street address, so all we can go by is tax parcel ID.

Register/Registrar of Deeds: the county office which has all the Liber books and can give/sell you a copy of the deed for xerox costs. They have all the Liber's cross indexed by tax parcel ID and street address.

Tax assessor's office: the county office that has a bunch of plat maps, probably on computer that overlay onto satellite photos and have the tax parcel ID for every parcel in the county. In a perfect world, the tax maps align perfectly with the deeds. Good news: For a lot of counties, this stuff is accessible online and often free.

Most likely you are dealing with parcels with a nonexistent or ambiguous street address. Therefore, your first stop is the tax assessor's office. You ask get on his GIS system and you find the tax parcel ID for the specific slice of land you have in mind.

With that in hand, you go to the register of deeds. Ask for a list of all deeds, easements and the like associated with it, and you'll get a bunch of Liber numbers. Then you ask to see or copy all of them. Congrats, you just did your first title search!

Why did I start here? Because the title search is where everything flows from. Without knowing what these documents actually say, anything somebody says about reversion etc. is just a bunch of self-gratifying hot air. Really, it's not that hard. I do them without hesitation when I'm curious and have the time to spend a half hour at the courthouse and a half hour sitting at Starbucks reading documents.

For a journeyman's title search, go to a title company. They will be more thorough, look for more hidden stuff, do a cursory search for defects, and stand ready to insure a purchase. Last time I paid a title company to do that, it cost me $200.

For a master's title search, take the title search company's efforts to a real estate lawyer, who will look much more thoroughly for defects and recommend or create remedies. But be prepared to spend a lot of money: once engaged the lawyer will expect and proceed to do the entire deal soup to nuts.

Surveyors help when you don't know or agree where the line is on the ground. If your dispute is irrelevant to the exact location of the line, I fail to see the usefulness of a surveyor.

The classic blunder is to overlook a document which is, in fact, relevant. Case in point the guy with the deed which does not mention the New Hope & Ivyland - he probably has not found the other deed which transfers the land to the railroad, because he wasn't trying to find it.

The other definitions: Wikipedia explains better than I can.

Reversion is never a default behavior in law. It can only exist if specifically spelled out in the easement. And even then, it may be undone by the recent trend in state laws to override reversion to keep rights-of-way intact: railbanking, landbanking, rails to trails, all that.

Adverse possession does not work on railroads, because railroads have eminent domain.


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 Post subject: Re: Railroad Real Estate Legal "Basics"
PostPosted: Mon Apr 08, 2013 2:12 am 

Joined: Mon Aug 23, 2004 3:01 pm
Posts: 1755
Location: SouthEast Pennsylvania
robertmacdowell wrote:
The classic blunder is to overlook a document which is, in fact, relevant. Case in point the guy with the deed which does not mention the New Hope & Ivyland - he probably has not found the other deed which transfers the land to the railroad, because he wasn't trying to find it.
I think that Jimmy McHugh said that in this Pennsylvania case, there was no other deed, the railroad got a Court Order when their petition for Eminent Domain was granted. Court decisions are also filed, but not always in the same books as deeds.
Quote:
Adverse possession does not work on railroads, because railroads have eminent domain.
It may work if the railroad does nothing. A Reading Company employee was "beating the bounds", inspecting what his records showed that the railroad owned, and found that a customer in Reading, Pa. was running their locomotive crane over some railroad owned land and track for more than 30 years, without any agreement or payment. The Real Estate department wanted to collect for track rental as far back as the statute of limitations would allow, the Legal department replied not to bother, that 30 years was long enough for adverse possession to be established. While Eminent Domain could overcome that, it wouldn't be retroactive!


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 Post subject: Re: Railroad Real Estate Legal "Basics"
PostPosted: Mon Apr 08, 2013 9:07 am 

Joined: Sun Aug 22, 2004 8:28 am
Posts: 2732
Location: Salt Lake City, Utah
robertmacdowell wrote:
Oh boy here we go. I am not a lawyer and I don't need to be, because the vast majority of relevant law is not in the law books. It's on the deeds.


Mr. MacDowell is largely correct. Real Estate law requires a lot of "legwork" in doing the deed and title research for any given piece of property.

That being said, just a few additions to this conversation:

1. Depending on your jurisdiction, using an attorney to do your real estate transactions may be required. This depends on state to state, and even within a state. Check and see what the custom is before you delve into the issue.

2. A solo practitioner who does real estate law rents office space from the firm I am currently working for. He was telling me the other day that malpractice rates for his practice have skyrocketed the past few years. It's not because attorneys like him, that do real estate all the time are messing up, it's because attorneys who aren't experienced are dabbling in it. If you find that you need the services of an attorney to handle your organization's real estate needs, find one who does it nearly all the time.

3. I'm pretty sure Mr. Bell's original inquiry was due to the fact that he fields a lot of questions regarding abandoned railroads and reversion rights. One of the largest misconceptions out there is that the railroad's right of way reverts to the adjacent landowner upon abandonment. Is this true? Well, it's the classic legal answer "It depends." However, usually it does not.

4. That being said, whether there is a right of reversion depends largely on how the original property was acquired by the railroad. Must railroad construction east of the Mississippi was done in an era before states had general incorporation laws. This means that many railroads had to seek a charter from the state legislature, in the form of legislation, to lay out the company's responsibilities and give it corporate powers. These charters will spell out how a railroad could acquire right of way, usually through direct purchase or eminent domain. In some cases, they also spell out what is to happen if the line is abandoned. However, as Mr. MacDowell pointed out, it depends on whether your state has adopted recent laws to preserve the right of way.

5. If the railroad in question was a "land grant" railroad (like many of the western railroads), then all bets are off, as usually their rights of way were given to them by the federal government (or in limited cases, the state/territorial government).

Most mistakes in real estate law happen because one does not do a thorough enough title search, or mistakes by predecessors in not properly recording deeds, court decisions granting eminent domain, etc.

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David M. Wilkins

"They love him, gentlemen, and they respect him, not only for himself, for his character, for his integrity and judgment and iron will, but they love him most of all for the enemies he has made."


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 Post subject: Re: Railroad Real Estate Legal "Basics"
PostPosted: Mon Apr 08, 2013 10:20 am 

Joined: Sun Aug 22, 2004 7:23 am
Posts: 492
Location: Strasburg, PA
Apropos to Mr. MacDowell, many county registers have their records on line, which makes the initial search easier.

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 Post subject: Re: Railroad Real Estate Legal "Basics"
PostPosted: Mon Apr 08, 2013 11:59 am 

Joined: Sun Aug 22, 2004 5:55 pm
Posts: 1109
Location: Warren, PA
Having done a lot of right-of-way research during the shortline creation era from Conrail properties, a couple things to throw in:

1) Often the railroad copy of the valuation map is the best surviving document documenting the SALE OF out parcels and the date. It's not always difficult with the original val map circa 1917, but determining if the railroad still owns it can be a bear. Conrail did a pretty good job of recording sales though.

2) There are dramatic differences between states and localaties on the quality of the courthouse property records. As New York State 'taxes' railroad real estate (until it is folded into a public agency) the property records and parcel documentation is pretty good. Then there is Pennsylvania, where they are exempt from local taxation, so you can imagine the quality of the deed and successor title information in comparison.

3) Beware of the fact that many railroads are/were the official property boundary marker for subsequent legal surveys on adjacent parcels. 'to the center of the main track' with an offset of XX feet to the fenceline' or such language is not uncommon. That's all fine and good until somebody removed that main track and used the second track, or entirely removed the track, or other such issues. Just got involved in one where a wood bridge had been replaced, relining a curve, and moving the original main line in 1947, and the original property deed was to the centerline of a track that had moved about six feet west. Surveyor was absolutely baffled until he saw the original valuation map.

4) There are a couple of services that can get copies of the original ICC copy of the valuation maps in the national archives. Do You Graphics in Maryland is one. But it's 'as it was' with no post-1917 land updates, beware. 'original' deed information is often, but not always, recorded on those 1917 val maps.

As a final caution, many 'real estate professionals' are more than clueless about railroad right-of-way issues. Only a handful truly understand the mechanics of how railroads got where they are, or what 'abandoned' actually means. Your average railroad enthusiast is more knowlegable, justifiably questioning, and cautious about making 'the answer is' statements than a real estate agent that likes to reply 'oh, its reverted, its your property, the trains don't run there anymore, you own right up to the edge of the ties', ad nauseum. That's the source of many of hard feelings to railroad preservation - the property owner/buyer BELIEVED what somebody in real estate told them, and consider that to be a property warranty.


Last edited by Randy Gustafson on Mon Apr 08, 2013 12:08 pm, edited 1 time in total.

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 Post subject: Re: Railroad Real Estate Legal "Basics"
PostPosted: Mon Apr 08, 2013 12:04 pm 

Joined: Sun Aug 22, 2004 8:28 am
Posts: 2732
Location: Salt Lake City, Utah
S. Weaver wrote:
Apropos to Mr. MacDowell, many county registers have their records on line, which makes the initial search easier.


Yes, many states and counties have their real estate and court records online. It's interesting reading sometimes.

For example, it can give you an appreciation of how many "tickets to Paradise" a particular little shortline/tourist railroad in Lancaster County, PA has to sell each year just to pay the real estate tax bill.

David W.
Ad Valorem, MO

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David M. Wilkins

"They love him, gentlemen, and they respect him, not only for himself, for his character, for his integrity and judgment and iron will, but they love him most of all for the enemies he has made."


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 Post subject: Re: Railroad Real Estate Legal "Basics"
PostPosted: Mon Apr 08, 2013 2:42 pm 

Joined: Sun Aug 22, 2004 1:51 pm
Posts: 12150
Location: Somewhere east of Prescott, AZ along the old Santa Fe "Prescott & Eastern"
wilkinsd wrote:
For example, it can give you an appreciation of how many "tickets to Paradise" a particular little shortline/tourist railroad in Lancaster County, PA has to sell each year just to pay the real estate tax bill.


Randy Gustafton wrote:
Then there is Pennsylvania, where they are exempt from local taxation


Does.... Not.... Compute......

I can suggest that, indeed, Pennsylvania localities CAN apply real estate taxes to railroads. I watched, from a distance, as my home county "sold" the local PRR railroad station in my hometown at sheriff's sale for unpaid taxes, only to have the lawyer who "bought:" the station discover during title search that they had been still trying to bill Penn Central at Six Penn Center in Philadelphia, then switched to corporate successor American Presidential Underwriters, who of course ignored the bills because by then Conrail, and by the time of the actual sale Norfolk Southern, owned it. The tax sale was invalidated, and when NS got wind of what was happening, they offered it to the borough for a song.


Last edited by Alexander D. Mitchell IV on Mon Apr 08, 2013 6:39 pm, edited 1 time in total.

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 Post subject: Re: Railroad Real Estate Legal "Basics"
PostPosted: Mon Apr 08, 2013 2:52 pm 

Joined: Mon Aug 23, 2004 3:01 pm
Posts: 1755
Location: SouthEast Pennsylvania
In the case of the New Hope & Ivyland RR in Pennsylvania, most of its deeds and agreements refer to the center line of itself, not a particular track. Apparently this line was established, maybe by legislation, before the railroad was built in 1891. Since the railroad's lands are not always symmetrical, a description for a section 70 feet wide might say something like 30 feet from the center line on one side and 40 feet from it on the other. Sometimes, more modern deeds for nearby properties use this center line as a reference point!


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 Post subject: Re: Railroad Real Estate Legal "Basics"
PostPosted: Mon Apr 08, 2013 2:55 pm 

Joined: Mon Aug 23, 2004 12:59 pm
Posts: 650
Alexander D. Mitchell IV wrote:
Randy Gustafson wrote:
Then there is Pennsylvania, where they are exempt from local taxation


Does.... Not.... Compute......

I can suggest that, indeed, Pennsylvania localities CAN apply real estate taxes to railroads.

In California, public utilities are subject to property taxes, but for consistency the assessed valuations are determined by the State Board of Equalization rather than by the local county assessors.


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 Post subject: Re: Railroad Real Estate Legal "Basics"
PostPosted: Mon Apr 08, 2013 3:10 pm 

Joined: Sun Aug 22, 2004 5:55 pm
Posts: 1109
Location: Warren, PA
See the following: Railroads are classified as public utilities:

http://www.tax.ny.gov/research/property ... lvania.htm

Lots of good information though.

Remember there's a BIG HOLE here in property that is either owned by the railroad that is not part of the actual operations 'nonsystem operations'. I suspect if you've got local property taxes to a railroad in PA, this is why.

This is the #1 reason why shortlines in PA often control their property and shortlines in NY can't afford to. NY has full local taxation on all railroads, so turning them over to a county or authority or SOMETHING is standard practice.

Be aware that PA has grown very vague in state supreme court ruling allowing localities to attempt to tax nonprofits that do not perform public charity. We have a hotbed local case that will probably end up in state supreme court; they are attempting to tax nursing homes, hospitals, and the YMCA. Stay tuned.

The point here is not on who gets taxed, its that the accuracy of owners, deeds, titles, and documentation is in direct proportion to getting taxed on it. If you aren't getting taxed, neither the owner or taxing body expends a lot of effort on keeping local records acurate, so beware what your state and locality does. That's at the root of relying on local courthouse records you'll run across.


Last edited by Randy Gustafson on Mon Apr 08, 2013 3:27 pm, edited 4 times in total.

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 Post subject: Re: Railroad Real Estate Legal "Basics"
PostPosted: Mon Apr 08, 2013 3:13 pm 

Joined: Mon Aug 23, 2004 3:01 pm
Posts: 1755
Location: SouthEast Pennsylvania
To split a legal hair, here is an excerpt from:
http://www.portal.state.pa.us/portal/se ... _tax/14427
Quote:
The public utility realty tax (PURTA) is levied against certain entities furnishing utility services regulated by the Pennsylvania Public Utility Commission or a similar regulatory body. The commonwealth imposes this tax on public utility realty in lieu of local real estate taxes and distributes the local realty tax equivalent to local taxing authorities.
After ConRail Day, 4/1/76, PennCentral and its later names were no longer Public Utilities, so it would be proper to impose local real estate taxes on their properties. Part of the confusion could be that it took ConRail a few years to get all of its deeds recorded, so that local tax assessors could find out that a new Public Utility owned certain properties.


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 Post subject: Re: Railroad Real Estate Legal "Basics"
PostPosted: Mon Apr 08, 2013 3:49 pm 

Joined: Sun Aug 22, 2004 5:55 pm
Posts: 1109
Location: Warren, PA
Remember that Penn Central kept the 'nonoperating' properties that could be sold as NOT part of Conrail, so yeah, that would apply for taxation. Here in our town that included the original abandoned passenger station and parking lot. That's the same property that had the property boundary deed referenced to the track center that was later moved, placing the resulting eastern boundary of the parcel in the middle of the building next door. Which is how a surveyor starts drinking heavily looking for a solution.

I absolutely believe your New Hope story and it rings true to me. The confusion in PA on courthouse ownership records for railroad property has been proven to me time and time again. Everyplace I've had to do courthouse searches on a corridor I've found mistakes; usually either the railroad paying tax bills on things that don't exist like real property improvements on coaling towers and removed stations, or localities sending bills to the Pennsylvania Railroad, Penn Central, Erie-Lackawanna, and any manner of predecessors.


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