Family Owned Trusts
Basically, there are two types of land trusts and depending on the kind you are dealing with will help you find out how to use a land trust to protect your property.
My property in New Mexico is part of a land trust. In fact, the deed to my home is about four inches thick and does mention the Queen of Spain. What is also in there is the following: Cristobal de la Serna Land Grant.
What this means in New Mexico is after the Treaty of Hidalgo was signed in 1848 (meaning New Mexico became part of the United States) to protect native lands (Mexican and Spanish), families (or a group of families) were allowed to develop and hold land trusts on many parcels of land—in the case of where I live, over 22,000 acres, which now contains 7,000 single-family properties.
Land trusts such as these are not that uncommon and I wasn’t aware of the extent of trouble I’d be in—until I wanted to move and sell my house.
Most of these old land grants sit uselessly in some county records hall, but my Serna Land Grant came to light when heirs of the original land trust decided to invoke their right to my property! Can I sell my property? Sure—if someone pays cash and doesn’t need a title insurance policy which “insures" that the property is free and clear of any encumbrances. According to the lawsuit filed by the trustee heirs if someone wants to purchase my home and obtain a mortgage, they will be unable to obtain title insurance saying the land and property is free and clear. Most lenders will not enter into a mortgage without property insurance—in fact, I don’t know of one lender that will.
New Mexico isn’t the only state where this is happening of late, so once you’ve read through this article, run for your mortgage papers and look at your warranty deed and title insurance to see if any stipulations about land grants or land trusts appear. If so, you may have trouble selling your property. Of course, most of these heirs leave the trusts as they are and many homes are perfectly safe to sell even if the title insurance company is required to mention the trust in the title policy.
Not in my case, however. The worst part problem with the Serna Land Grant in New Mexico is the lawsuit says the property must be divided between “all heirs." Can you image how many heirs there are after hundreds of years? Impossible to track.
In New Mexico, the current homeowners are fighting with the land grant associations and are turning to local courts to make a decision on who owns what. This isn’t working however, and judges are agreeing the trust is indeed valid. Courts and attorneys are advising those affected by these types of land grants to file a claim with the original title insurance company, which many have done, however, the list is long and the response is slow. These family land grants trusts are just one way those of long ago protected land from ever being sold or owned by anyone other than those named in the grant. If this has happened to you, file a claim with the title insurance company—after all it was they who insured the property was free and clear.