Do you need a Title Report for your Accessory Dwelling Unit?

You may have heard that a title report may be required in order to determine where you can build your accessory dwelling unit (ADU). Read on to learn what a title report is, what info a title report covers, and when you need a title report to design and build an ADU in San Diego.

What is a title report or a preliminary title report?

A Title Report is the document containing the results of the title search, which is required by most mortgage lenders and insurers when there is a transfer of ownership. A Preliminary Title Report is essentially the same, but is not an insurable document; it is informational only and used most often by jurisdictions and property owners as part of the development process. When building an ADU in San Diego, a Preliminary Title Report is used.

What is included in a title report?

Both a Title Report and a Preliminary Title Report contain the following information:

  • The property or parcel of land in question.
  • The legal description of the parcel of land.
  • The owner of record for the property.
  • Any requirements or restrictions or notes about the property.
  • A listing of easements, liens, encumbrances, and other information affecting the title to the property as of the time and date of the report.

What does a title report (or preliminary title report) tell you about where you can build your accessory dwelling unit?

The information in the report is from a public records search; most or all of the records are located at the County Recorders Office located in the same county as the parcel of land. It contains all publicly available knowledge an owner or buyer would need related to the property. This is important as it relates to the potential development of an ADU; it may directly influence the location and placement of the ADU on the property. This is because the title report may call out pre-existing setback requirements that each jurisdiction has on the property, which would supersede ADU regulations.

For example, if there is a pre-existing sewer easement on the property, in addition to 4’ setbacks on the property, the buildable envelope of where the ADU may be placed will be reduced. Based on lot size, this may directly impact how large of an ADU you can build, regardless of what state laws state are granted “by right.” As such, if the existing recorded easement and setbacks leave only an 800 square foot developable envelope, the homeowner will not be allowed to develop an ADU any larger than 800 square feet, regardless of the fact that the jurisdiction may allow for ADUs up to 1,200 square feet.

What are the limitations of a preliminary title report?

As it relates to development of an ADU, what the Title Report does not tell you is whether there are any non-recorded private easements or restrictions on the property that either the owner or a prior owner may have entered into. These non-recorded easements or restrictions would have the same limiting factors as recorded easements, only a private citizen (the dominant tenement) look to enforce them via injunctive relief through the courts (would be able to sue the property owner to enforce the non-recorded easement or restriction). Any such action would then become public record and would be thereafter recorded against the property, which would thereafter show up on the Title Report and reduce the developable envelope (as well as have court costs associated with the litigation).

When should I get a title report for my ADU?

If you suspect there may be an easement or restriction on your property, we recommend running a preliminary title report as part of the ADU feasibility study. This enables us to determine the best location for the ADU based on all property constraints. If you wait to run the title report and end up designing an ADU in an area covered by an easement, the city will likely catch this oversight in the plan check process. You would then need to redesign the ADU, which would of course take additional time and money.

How can I obtain a title report for my ADU project?

You can get a preliminary title report directly from a title company. We’re happy to put you in touch with providers we have worked with in the past. Title reports typically cost $1000-$1500 and take up to a week to obtain.

Can I use an existing copy of a preliminary title report?

If you have recently purchased or refinanced the property, you may have a usable copy of a title report. If that copy was digital, you can ask the title company for a new version (although the title company is under no obligation to provide it and may charge a fee). Some cities will only accept title reports from the last 5 years. This is because new liens, easements or other encumbrances may have been placed on the property since the last title report (or preliminary title report) was issued that may impact the placement of the ADU on the property.