You can drive to the house. There is a gravel lane off the township road, it has obviously been used for fifty years, the seller uses it every day, and the tenant has used it for the last six. Everything about the property says access.
Then the title commitment comes back and Schedule B excepts “rights of access to and from the land,” or the survey note says the parcel has no frontage on a public right of way, and the lender’s conditions list grows a line item that was not there before. Suddenly the deal is not about the house.
This is different from a shared driveway problem. A shared driveway is an access right that exists and is held in common, with questions about maintenance and who can block whom. Those questions are real and they are covered in shared driveways, private roads, and access easements. What follows is the harder case: there is no recorded right of access at all, and the only way in crosses land somebody else owns.
What the base policy does and does not insure
A standard loan policy insures title to the described land. It does not, on its own, insure that you can get to the described land.
That sounds like a technicality and it is the whole problem. Access is a separate insurable item, covered by its own endorsement, and the title company will only issue that endorsement if it can find a recorded basis for access. A recorded easement, a plat dedicating a street, frontage on a public road. Something in the chain.
The ALTA 17 series endorsement insures that the land has actual vehicular and pedestrian access to a physically open public street. That is the endorsement your lender wants and the one you should want. Which endorsements are worth paying for on investor paper, and what each one buys, is in the title endorsements worth paying for.
If the underwriter will not issue it, that is not a negotiation. It is information. The underwriter has looked for a recorded right of access and has not found one.
Why decades of use is not the answer you want
Every investor who hits this says the same thing: people have driven that lane for fifty years, so there must be a right.
There may well be. The doctrines exist. An easement by necessity can arise when a parcel is severed from a larger tract in a way that leaves it without access. An easement by prescription or by implication can arise from long, open, continuous use. Those are genuine legal theories and in many cases a court would find in your favor.
But an unwritten right that a court would probably recognize is not the same thing as a recorded right a title underwriter will insure. The underwriter is being asked to take a risk, not to predict a verdict, and an unrecorded claim means the risk is litigation against a neighbor who has every incentive to disagree once money is involved. That is why unwritten easements are the thing lenders will not close on, even when everyone agrees the easement almost certainly exists.
The reasoning is the same reasoning that applies to a deed whose legal description omits part of what you thought you were buying. The physical reality on the ground does not control. The recorded instrument does. That case is worked through in when the legal description leaves out your garage.
How the parcel got this way
Three origins account for most of it, and knowing which one you have tells you how hard the fix will be.
The informal family split. A parent owned forty acres, deeded ten to each of four children by metes and bounds, and nobody created easements because everyone was family and everyone could drive wherever they liked. Two generations later the parcels are in unrelated hands. This is the most common origin and usually the most fixable, because the burdened parcel’s owner often has the same problem in the other direction.
The unapproved subdivision. Somebody split a tract by deed without taking it through the municipality, which means nobody ever confirmed that each resulting lot had legal access, because confirming that is one of the things subdivision review exists to do. If this is your situation the access problem is one symptom of a larger one, and the full set of consequences is in the deed split nobody approved.
The vacated or never opened road. The plat shows a street. The street was never built, or was formally vacated by the municipality decades ago, and the right of way reverted to the abutting owners. The parcel’s frontage is on a road that does not legally exist. This one surprises people because the plat looks fine.
You find out which you have by reading the commitment properly rather than skimming for the payoff figure. Schedule A describes what is insured, Schedule B-I lists what must be satisfied, and Schedule B-II lists what the policy will not cover. Access problems live in B-II as an exception and in B-I as a requirement. How to read the document is in how to read a title commitment.
The appraisal is quietly assuming the thing in question
Here is the part that costs the most and gets noticed the least.
An appraiser values a property as a property with access, because that is what a reasonable buyer would assume from the driveway in the photographs. Unless the appraiser is specifically told that legal access is in question, the report will not flag it, and the value you are lending against is a value that presumes a right nobody has confirmed.
So you can end up with a clean appraisal, an unclean title commitment, and a deal where the two documents are describing different properties. When the access issue is disclosed and the appraiser is asked to address it, the answer is usually either a materially lower value or a refusal to complete the assignment without a hypothetical condition, which most investor programs will not accept.
Tell the appraiser early if you know about it. An appraisal that addresses the condition is worth more to you than a clean one you cannot use.
The three fixes and what they cost
Buy a recorded easement from the neighbor. This is the real answer in most cases. You need a surveyed description of the easement area, a written grant with the right scope, which means vehicular and pedestrian access, utilities, and maintenance obligations stated, and it needs to be recorded. Expect three thousand to six thousand dollars in survey and legal work, and then whatever the neighbor wants, which is the uncapped number. A cooperative neighbor with a nominal payment is a two week fix. A neighbor who understands they are the only road in is a different conversation.
Petition for a private road or seek a declaratory judgment. Many states have a statutory process to lay out a private road to a landlocked parcel, and a court can also declare that an easement by necessity exists. Both work and both take months, with costs and availability varying considerably by state and subject to change. This is the path when the neighbor will not deal.
Walk. Sometimes the right answer. A parcel with no legal access and an uncooperative abutter is not a discount, it is a different asset class.
What does not work is closing on the promise that the seller will get it handled afterward, or a side letter from the neighbor that never gets recorded. If it is not recorded, the next owner of that neighboring parcel is not bound by it, and you have bought the problem rather than solved it.
Running it as a number
Take a rental under contract at 185,000 dollars with twenty five percent down. The loan is 138,750 dollars at 7.5 percent on thirty years, so principal and interest are about 970 dollars. Taxes at 2,280 dollars a year add 190 dollars, insurance at 1,320 dollars adds 110 dollars. Monthly obligation is 1,270 dollars against rent of 1,675 dollars, so coverage is about 1.32. A normal deal.
Now price the easement. Survey and counsel at 4,500 dollars, a payment to the neighbor at 15,000 dollars, and three months of delay during which you are not collecting rent but are paying a rate lock extension and a seller per diem. Call the hard cost 19,500 dollars and the soft cost 2,400 dollars. Your all in basis moves from 185,000 dollars to about 206,900 dollars on a property that appraises at 192,000 dollars.
The coverage ratio did not change, because the easement cost came out of your pocket rather than the loan. What changed is that you put an extra 21,900 dollars of cash into a deal whose annual cash flow above debt service is about 4,860 dollars. That is four and a half years of cash flow to buy a driveway. Work your own version in the DSCR deal calculator, and if the ratio inputs need a refresher they are in how to calculate DSCR.
The honest conclusion from that math is that an access problem is almost never worth solving at full price. It is worth solving at a purchase price that reflects it, which means the number to negotiate is the contract price, not the easement.
Related conditions that travel with it
A parcel with access questions frequently has survey questions too, and the lender will want a new one rather than a twenty year old plat. When that requirement triggers is in when a rental purchase needs a new survey.
If the recorded description or a prior deed is simply wrong rather than incomplete, the correction route is a separate instrument and a separate timeline, set out in when the recorded document is wrong.
And if the deed carries an affirmative performance deadline enforced by a reverter, which land bank and municipal program deeds often do, an access delay can run you straight into it. That interaction is worth checking against reverter clauses and performance deadlines.
Two smaller points
If you are quoting this deal outside Pennsylvania, remember that the cost side of a short, points heavy loan used to carry you through an easement fight is measured differently in different states, and in some of them there is a legal ceiling on the all in charge rather than the note rate. That is explained in usury limits on an investor loan.
And none of the above arrives in a tidy disclosure. Investor loans sit outside the consumer forms regime, so the conditions list and the title commitment are the documents that tell you the truth. Why that is, and what you get instead, is in why a DSCR loan skips consumer forms. On the entity side, the separate filing your lender makes against the LLC rather than the house is in the UCC-1 and the fixture filing.
One last connection. If the easement negotiation turns into a guaranty discussion because you need a bridge facility to carry the property while it resolves, the ongoing financial conditions in that guaranty are their own topic, covered in net worth and liquidity covenants after your loan closes.
Where this lands
A base title policy insures the land, not the way in. Access is a separate endorsement and the underwriter will only issue it against a recorded right. Decades of visible use is a legal theory, not an insurable fact, and lenders do not close on legal theories. Confirm before you remove contingencies that the commitment does not except access and that the underwriter will issue the access endorsement. If it will not, treat the fix as a purchase price negotiation rather than a closing cost, because the hard and soft cost of buying a driveway routinely exceeds four years of the property’s cash flow.
If you have a commitment in front of you with an access exception and you are not sure whether it is a two week fix or a dead deal, send it over. We place loans on rentals and flips across Pennsylvania and additional states, and we would rather tell you on day three than on day thirty.
FMC Capital is a Pittsburgh-based mortgage brokerage serving real estate investors. NMLS #1840537. Call 412-990-2941. This article is general information about title and loan mechanics and is not legal advice. Easement doctrines, private road petition procedures, title endorsement availability and underwriting standards vary by state, by title underwriter and by lender and are subject to change. All figures are illustrative. Consult a licensed attorney in the state where the property is located.