RAILROAD LANDS AND REAL ESTATE TITLES

With respect to affect of railroads on real estate titles, two statutes deserve attention.

M.G.L.A. c.40, §54A imposes restrictions on construction of new buildings on lands previously used as railroad rights of way or "any property appurtenant thereto". Since the statute governs the use of the property as opposed to its ownership, it is excluded from the coverage under a standard ALTA title insurance policy.  However, the Supreme Judicial Court held in Somerset Savings Bank v. Chicago Title Insurance Company, 420 Mass. 422, 639 N.E. 2d 1123 (1995), that the property is still subject to the provisions of the statute. Somerset involved construction of a high rise apartment building over a former railroad right of the way. Since the railroad owner conveyed its property in 1926, this conveyance fell outside the scope of a standard fifty-year title search, and the examiner did not pick the actual document naming the railroad owner. The court, however, found other documents in the title search that provided enough evidence to determine that the property had once been used as a railroad right of way, and stated that, depending on their everyday practices, title insurance companies might still be found liable if they otherwise routinely list railroad rights of ways for informational purposes in their policies. In light of said case, Old Republic suggests that its agents list railroad rights of way for informational purposes on schedule B of their policies by using the following note:

However, while planning their closings, the conveyancers should be aware of M.G.L. c.161C §7, which governs the acquisition of railroad land and will affect titles to real properties. The statute gives the Commonwealth of Massachusetts a right of first refusal as to the purchase of railroad land. A written notice must be given the Executive Office of Transportation and Construction (EOTC), or its designee. The railroad may sell or transfer their land only after they receive a written rejection of their offer by EOTC or after the expiration of 90 days from the date the offer was made to EOTC.