Lance R. Pomerantz
Attorney at Law

Land     Title     Law

“Constructive Notice”  The  Newsletter

Excerpted from the July 8, 2015 mailing of "Constructive Notice":

The Title Search & the PCDS

A federal Magistrate Judge in upstate New York recently explored the relationship between a title search report and the Property Condition Disclosure Statement (“PCDS”) provided by the seller. Eagan v. Glassbrenner, No. 14-CV-507S (W. D. N. Y., June 10, 2015).

Sellers had answered “no” to PCDS Question 4, concerning whether anyone else had a lease, easement or any other right to use or occupy the property "other than those stated in documents available in the public record." Buyer had ordered a title search that revealed five recorded oil and gas leases. After closing, Buyer started receiving royalty checks from the lessee. Buyer sued Sellers, contending that seller lied when answering Question 4.

The Court found “[t]he title search report contained enough information to allow the [Buyer] to search the public record for further information about those leases.” Hence, the plain language of Question 4 precluded summary judgment for the Buyer.


This case points up the ramifications of the PCDS when complex commercial activities are carried out on residential land. The other issue the Court addressed concerned whether natural gas storage "operations" in a natural rock formation beneath the land occur in a way that would constitute a storage "facility." Sellers had answered “yes” to PCDS Question 14 concerning storage “tanks,” but had given a separate affidavit wherein they asserted “to the best of our knowledge … no storage facilities exist under the premises.” Noting that Buyer had waived two opportunities to inspect the premises prior to closing and that discovery about Sellers' knowledge at the time the affidavit was given had not yet been completed, the Court declined to grant summary judgment.