Fraud Against Attorneys & Title Companies
By The State of Florida
Title Companies Subsidize Road Building In Florida
By Pastor G. ReckartTitle companies are subdizing road building in Florida by paying out millions of dollars in settlements for Murphy Act road reservation easments. Property owners nation wide in the United States are affected since funds to pay for these road easements come from higher prices charged for their title insurance. The money to pay out millions of dollars in road easement settlements in Florida comes from title company fees charged in other states to those who purchase property. Since interstate transactions fund this subdizidation of Florida roads through payment for road easements, something here should fall within Article I, Section 8 of the U.S. Constitution that regulates interstate commerce. There should be some Federal law that would prohibit the State of Florida from this extortation of title companies by manipulating the way these Murphy Act road reservation easments are deemed valid or invalid. Until something is done, property owners nation wide will be paying a secret tax rolled into their title insurance fee to continue to pay for subsidized road building in Florida.
Title insurance is a great blessing to property owners. It is a way to peace of mind over a real estate purchase. And that is the way this insurance is supposed to work. I have not met a crooked title insurance company yet. I hope I never do. The public needs protection in real estate transactions and title insurance companies offer a great service. When the public is at risk or in danger by shady real estate transactions the government should step in and protect its citizens. At the same time, the same government should step in and assist title companies who insure real estate titles in Florida. That is the way government should work. Or at least that is the ideal way government should work. What are we to think then when the government becomes the thief? How are we to respond to governmental stealing and outright fraud? Well, it is time someone ask this question and we get an answer. Is it right for the State of Florida to perform acts of fraud on title companies who insure titles in our state? Is it fair for the State of Florida to perform acts which if a private company did, the whole board of directors would be put in jail and the key thrown away?
Here is the sad story of a multi-million dollar swindle against title companies who have written policies insuring real estate purchases in Florida.
There exist in the State of Florida what is known as Murphy Act State Road reservations and easements. Basically this means there was legislation called the Murphy Act that allowed the State of Florida to take property for back taxes owed and sell them at public auction to the highest bidder. During the depression years there were millions of acres of Florida that were on the tax rolls. Property taxes were used to pay and support infrastructure such as roads, sewers, water, fire protection, schools, etc., and operation of public government.
Because of the depression 1930-1937, many property owners had no money to pay the taxes on their property. Many properties were owned by northern snowbirds who purchased lots through massive mail order programs. When the depression hit and taxes were not paid the local governments had little money to operate. By 1937 there was an approximate $97,000,000.00 in unpaid property taxes throughout Florida. When taxes are not paid the county in the jurisdiction of the property has authority to sell tax certificates in the amount of the value of the taxes due, the certificates themselves bearing interest. Because there were few with money to purchase these tax certificates, the taxes went unpaid and county governments found themselves in need of money and no place to obtain it. These tax delinquent properties remained on the tax rolls year after year with no apparent resolution to the problem. This dragged on until in 1937 the Florida Legislature passed the Murphy Act (Chapter 18296). The Murphy Act empowered the State to begin the process of foreclosure on these tax delinquent properties and transferred to the Trustees of the Internal Improvement Trust Fund (TIITF), the ownership and the right to dispose of them at public auctions.
Inherently there is absolutely NOTHING WRONG WITH THIS. But what followed became the largest land swindle in Florida history.
Once the TIITF Board had possession of these millions of acres of land they planned to put them up for public auction as soon as possible and get them back on the tax rolls. Before this took place, on September 17, 1940 Secretary F.C. Elliot presented a written request by the State Road Department asking for reservations on the Murphy Act lands in the possession of the Trustees for future state road right-of-way expansion along existing state roads. This request was approved by a vote of the TIITF Board. Now it was time to sell off these lands. But alas, there was a suggestion that if these reserved easements for future state road right-of-way was such a good idea, why not designate many thousands of rural roads and city streets as State Roads and thus secure for the next billion years enough right-of-way for the State. This went from private meetings into the State of Florida legislature where in the year 1941 they passed Chapter 20659 (Hillsborough County), a massive real estate bill taking many tens of thousands of County and City roads state-wide and designating them State Roads. This legislation was signed into Law by the Governor on June 3, 1941. County by county every road being taken from the Counties and Cities by the State was listed in the legislation. All of this was done to have in place the legality of claiming these were existing State Roads at the time Murphy Act Deeds were conveyed and make legitimate the reservation on such tax sale conveyances along these roadways.
Ok, so now it is all in place, the land swindle would begin. Advertisements were printed throughout Florida in local newspapers announcing the plans to sell these parcels to the highest bidders. Auctions were scheduled. The various counties would act for the State as selling agents. The counties would be paid for their services and for their share in these auctions. At the auctions it was announced that the deeds would contain a State Road reservation for future right-of-ways. These easements would be two hundred feet wide (200'), one hundred feet each side of the centerline. Available was the 1941 legislation revealing the streets and roads along which these easements would be claimed. There was however promises made and these coerced many to bid and purchase these tax delinquent lands. The deed contained a ten acre clause. If the total acreage on the deed did not exceed ten acres the reservation was not valid and the buyer had no worry about the easement. This comforted many bidders and they purchased parcel after parcel under ten acres to avoid these reserved easements. In fact, the State of Florida grouped these parcels in such a way that there were many thousands parcels purposely sized under ten acres so the reservation would not apply. There was no other purpose for parcels to be sold in many areas under the ten acre size except this. The State of Florida purposely deceived the purchasers as we shall see and has since been plundering the profits of title insurance companies in the greatest fraud ever perpetrated against an insurance business.
The Florida State Road Department enacted Rules concerning these Murphy Act reservations and published them. These Rules were placed into the hands of attorneys and title insurance companies. We assume these Rules met with approval of the TIITF Board because there is no evidence in the 60+ years of their minutes where they disagreed and ordered change or correction. The TIITF Board and the State Road Department worked very close with one another over this time period concerning these reservations. So there is no reason to believe there was a disagreement between them over the Rules. In fact, it is very likely since there was no objection to the language of the Rules, that this language was the intent of the TIITF Board. There being no objection to the language by the TIITF Board for 50+ years we would say this testifies SOMETHING!
The State Road Department enacted a Rule that if a property owner sought release of the reservation easement, if the deed did not contain in the aggregate ten acres the reservation was not valid. Got that? If the deed did not contain ten acres the reservation was considered not valid and the property had no cloud on the title. This Rule existed and continued to exist as of May 16, 1978. Click here to see a copy of a letter from the Secretary of the Florida Department of Transportation and the Rules governing Murphy Act road reservation easements.
The fraud begins right here!
Honest and hard working real estate attorneys and title companies trusted, relied upon, and had faith in the representations of the Florida State Road Department, the TIITF Board, and the various Counties, that Murphy Act deeds containing less then ten acres were not clouded with the reservation. When properties were sold off by those who purchased them at auction the majority of the transfer deeds DID NOT CONTAIN the Murphy Act reservations. The reason is simple, the Rules said these reservations were not valid on parcels under ten acres and there was no reason to include a cloud or encumbrance that did not exist. When surveys were returned showing less then ten acres the reservation was not transferred by attorneys drawing up new deeds. These same attorneys were also issuers of title insurance. Title insurance companies came in and insured these titles and DID NOT PLACE EXCLUSIONS on the policies for these Murphy Act reservations. Title insurance companies trusted, relied upon, and had faith in the representations of the Florida State Road Department Rules that these reservations were not valid. They insured titles on these under ten acre parcels and for the most part never paid a claim for years. They would not need to pay since the ten acre clause was not considered valid. Another reason was the TIITF Board instituted rules by which a property owner could request release of the reservations and if there was no planned expansion of the street or road adjacent to the property in question a release was granted. Title companies were instantly relieved of liability. This was wonderful for all concerned. Then a change occurred concerning these deeds and the ten acre clause. A change that amounts to massive FRAUD!
The State of Florida TIITF Board changed its own criteria for release of these reservations. The Florida Department of Transportation CHANGED ITS RULES and opinion of these reservations. Now, the ten acre clause was not valid and all the reservations were said to be valid even if the parcels on the deed did not amount to ten acres. All of a sudden title insurance companies were accused of missing the reservations and had to start paying millions of dollars to settle claims. The FRAUD began and continues against title companies. Then in 1984 title companies saw the fraud coming and sought for release of these if a property owner could demonstrate paying taxes on the parcels since 1971. This was passed into legislation in 1984. But the interpretation also was to be perverted by the State of Florida to continue its fraud. Title companies began to pay millions of dollars in settlements and have refused to challenge this fraud. Attorneys who drew up deeds without the reservation were liable for damages but have escaped unscathed since title companies took the beating and thief.
Who benefits from the fraud? The State of Florida benefits. Counties now benefit. Cities now benefit. Look at these officials and they will stare at you unashamedly saying the government has a right to take this property without compensation. They will stare at you and claim if the State is made to pay for real estate along road expansions where these TIITF reservations are alleged to exist, it will cost many millions of dollars more for road projects. I have heard them in public meetings say the public will out-cry if the easements are not used and they must pay property owners for them. They stack public opinion against property owners with the help of the news media thinking they are helping to save tax dollars by supporting the State and the fraud.
Title companies could have fought this in court long ago and won and could have saved millions of dollars in settlements. Title insurance would be cheaper in Florida if it was not for these annual millions of dollar settlements. Property owners would not need to spend millions of taxpayer dollars in eminent domain court cases using high-priced consultants. The millions of dollars in stolen property cost nearly equal in legal fees so that the State, Counties, and Cities do not obtain that much of a savings by claiming the reservations.
TIITF Board changes the rules to effectuate the fraud.
What better way to steal then with a legal document call an Administrative Rule? In Florida these Administrative Rules have the effect of law without necessity of legislation. Courts are expected to make decisions based not only upon laws legislated by the legislature but also by these Administrative Rules. The Florida Department of Transportation has a gun to its head with FDEP Administrative Rule 18-2.104(2) Florida Administrative Code (F.A.C.). So, on in 1995 the Department issued a new set of its own Rules concerning the Murphy Act road reservations in its Right of Way Manuel. In order for an attorney and a judge to see the change in rules to effectuate the fraud all prior Administrative Rules by FDEP concerning Murphy Act road reservations and releases must be obtained all the way back to 1941. Once these are obtained and place in their dated order the changes to pull off the fraud will be obvious. Then, follow up on this by obtaining all the Rules and Policies of Florida Department Of Transportation and its predecessor the Florida State Road Department in regard to Murphy Act road reservations and releases. There is a striking change just between 1978 and 1995 within the FDOT Rules and Policies. Who changed the Rules and why? The only benefit to the State to change the Rules and effectuate a change in policy at FDOT is financial, money, millions of dollars in property value, that could be stolen by carefully changing the interpretation of the ten acre clause on Murphy Act deeds. Review the Rules and Policy of FDOT on the next two links. First the 1978 image files of FDOT and showing that if the parcel or property for which a release was sought did not contain an aggregate of ten acres, the reservation was not valid. Then view the 1995 image file of FDOT where the ten acre clause is not to even be considered in the release. Between 1978 and 1995 there is 17 years, when did the policy change so millions of acres of property could be stolen from property owners by change of Rules and Policies.
1978 Rules and Policies of FDOT
1995 Rules and Policies of FDOT
The 1995 Rules do not address the 10 acre clause at all. They mention only the 20 acre clause found in Florida Statutes 270.11 2(b) where the right of entry is released into a parcel where phosphate, mineral, metal, and petrolmeun rights were reserved. This means, the State of Florida gives up all rights to these by releasing their right of entry into the property. This applies only to parcels 20 acres or less in one cpntiguous tract of 20 acres and under the same ownership. The ten acre clause dealing with Murphy Act Road easements is missing altogether. It has been totally gutted out of the new rules. The mention of "20 acres" was to mislead and misguide those applying the Rules. There never was a 20 acre clause on a Murphy Act Deed that I have seen. This is not just a typographical error this is just one more trick to effectuate fraud. In the 1995 rules FDOT has been stripped by FDEP of applying the ten acre test and releasing these Murphy Act road reservations. The change in the Rules provides the State with a means to steal millions of acres of property and cheat property owners out of millions of dollars in property settlements. What the TIITF Board, FDEP, and FDOT are doing against citizens is immoral and reprehensible.
The following title companies have collectively paid millions of dollars for reservations that legally do not exist but they refuse to fight and win. Who ultimately pays for these settlements? The public pays through higher title policy fees. The Florida Insurance Commission has a duty to look into this and straighten this out on behalf of the people of Flordia.
ALLIANCE TITLE OF AMERICA,INC.
AMERICAN GUARANTY TITLE INSURANCE COMPANY
ATLANTIC TITLE INSURANCE COMPANY OF SOUTH CAROLINA
ATTORNEYS' TITLE INSURANCE FUND,INC.
CENSTAR TITLE INSURANCE COMPANY
CHICAGO TITLE INSURANCE COMPANY
COMMERCE TITLE INSURANCE COMPANY
COMMONWEALTH LAND TITLE INSURANCE COMPANY
FIDELITY NATIONAL TITLE INSURANCE COMPANY
FIRST AMERICAN TITLE INSURANCE COMPANY
INVESTORS TITLE INSURANCE COMPANY
LAWYERS TITLE INSURANCE CORPORATION
NATIONAL TITLE INSURANCE COMPANY
NATIONAL TITLE INSURANCE OF NEW YORK INC.
NORTH AMERICAN TITLE INSURANCE CORPORATION
OLD REPUBLIC NATIONAL TITLE INSURANCE COMPANY
SECURITY UNION TITLE INSURANCE COMPANY
SOUTHERN TITLE INSURANCE CORPORATION
STEWART TITLE GUARANTY COMPANY
TICOR TITLE INSURANCE COMPANY
TICOR TITLE INSURANCE COMPANY OF FLORIDA
TITLE INSURANCE COMPANY OF AMERICA
TRANSNATION TITLE INSURANCE COMPANY
UNITED GENERAL TITLE INSURANCE COMPANY
WESTCOR LAND TITLE INSURANCE COMPANY
When will the time come that this fraud will be corrected and the State of Florida repents of this gross sin against property owners? Governor Bush and the present TIITF Board could take up this issue and resolve it. These reservations were created by a vote of the Board and they can be eliminated by a vote of the present Board. Will these have the courage and the morality to correct this sixty year old injustice?Now why is a Pastor involved in this matter? I am involved because of mistreatment by the City of Tampa and its Transportation Department in lying to property owners along 40th Street where there is a widening project underway. The officials of the City came into our neighborhood and promised all property owners they would not suffer any loss or damage because of the TIITF reservations. They promised to pay the full market value. They did in fact pay many property owners the full market value under the scheme of their "early acquisition willing seller program." Then they approached a couple property owners and offered them $250 for their fee simple title to the reservation. When the property owners refused, the City filed suit. Then the City withdrew the suits and sent notice of using the reservation easement without any payment whatsoever. The City of Tampa has taken the course of action of beating up the property owners along 40th Street. Our Church is on the hit list I am told and they plan to do us the same way when it is time to deal with property owners in Segment C of the project. Part of this mistreatment of the Church is because I have been so out-spoken against these TIITF road reservations and have challenged the lies of Jim Burnside Project Manager and his boss Elton Smith City of Tampa Transporation Manager. Because I challenged these two liars they re-aligned the footprint of the roadway moving it west with a dog-leg into the proposed roandabout so they would not go through our Church. They thought to punish me and the Church members because we opposed the TIITF lies they were telling. The City can beat up the Church if it wants but I promise them to stand my ground and the Church members will stand with me in front of bulldozers if we have to, even if it means going to jail.
Pastor G. Reckart
Look At The Murphy Act Rules Of The Florida State Road Department (FDOT) 1978
Look At The Image Files of the FDOT 1978 Rules and Policies
Look At The Murphy Act Rules Of The Florida State Road Department (FDOT) 1995
FDEP Declaratory Statement about ten acre clause and Mann case