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Tuesday, June 7, 2011

Land Grants Issue in Taos, New Mexico

For those of you that have an interest in the Taos area for Real Estate, pleae take a few minutes and reak the TCAR Postion Paper on the Land Grants that have been filed. 

These Grants are affecting the mortagage and title insurance processes in sales and ownership of certain properties in Taos County.

Position Paper

Taos County Association of REALTORS®

Fight Title Issues from New Land Grant Deeds

May 5, 2011

Prepared at the request of:

Taos County Association of Realtors®

1210 Salazar Rd. #H

Taos, NM 87571


John Kejr, President


Taos County Association of REALTORS® Fight Title Issues from New Land Grant Deeds Page 1 of 17

May 5, 2011

Executive Summary

Two warranty deeds, filed in Taos County (N.M.), have put the local economy into uncertain

territory. The deeds, which claimed title to some 40,000 acres of historic land grants,

immediately clouded the title of thousands of properties and hampered the ability to transfer,

buy, or sell those properties. Title insurers and lenders have restricted their issuing policies

and loans, awaiting legal resolution. Thousands of landowners also are in limbo, unclear

about the value of their properties and their rights of property ownership. The Taos County

Association of REALTORS® has undertaken to do whatever necessary to resolve this crisis

now, and for the long term.


On Oct. 20, 2010, Leandro and Lawrence Ortiz filed a warranty deed with the Office of the

Taos County (N.M.) Clerk, claiming they had clear title on nearly 21,000 acres and granting title

to the heirs of the Arroyo Hondo land grant. Two months later Robert O. Gonzales, of Ranchos

de Taos, did the same for more than 22,000 acres in the Cristobal de la Serna grant.

Since the time of these filings, every deed within these land grant boundaries has been

clouded, and property transactions and financing have been severely limited in Taos. Title

companies have restricted and, in some cases, stopped issuing title insurance for transactions

within the land grants. Banks and mortgage companies have gotten skittish about refinancing. As

of mid-April 2011, more than $9 million in real estate and financing business has been delayed

or, in some cases, abandoned. No one can say how many other deals have died since then.

Most observers – including Mr. Gonzales himself (as quoted in
The Taos News) – agree that

the filings were primarily strategic political moves, although several foreclosures within the

grants also have been delayed because of the filings. Letters written to and published by

Taos News
by these land grant activists want to raise past grievances, reopen old court cases, and

debate long-settled issues of ownership and access.

In good years, the Taos real estate and construction markets represented about 30 percent of

the local business activity – and generated a like number of jobs. Both sectors have suffered

Taos County Association of REALTORS® Fight Title Issues from New Land Grant Deeds Page 2 of 17

May 5, 2011

mightily in the Great Recession; these filings have created third-party obstructions to the

industries’ ability to recover.

Lifting a warranty deed from the Taos County books requires a court order, according to state

law. A number of stakeholders appear ready to take the land grant heirs to court to get such an

order, including the Town of Taos, title companies and banks, and aggrieved landowners.

However, court action takes time, and the Taos District Court docket is one of the most crowded

in the state. In addition, any court order could be appealed. In the meantime the business of real

estate transactions, a major hub of the Taos economy, suffers.

Taos County Association of REALTORS® Fight Title Issues from New Land Grant Deeds Page 3 of 17

May 5, 2011

What Could Happen If The Effects Of These Deeds Remain

In her veto message of HB 653, Gov. Susana Martinez called for a criminal investigation into

these filings. She warned that, “This conflict has the potential to pit neighbor against neighbor

and tear the community’s social fabric.” The Taos County Association of REALTORS® agrees,

and fears that ramifications of this filing of deeds may extend far into the future. For example:

The ability of private property owners within the land grants to sell would be severely

stifled, and the natural forces of supply and demand will be altered.

People who might be looking to relocate in Taos area would be discouraged by the

chaos in the Taos market, and likely look to buy a home somewhere else – or not at


The image of a real estate market in disarray would stigmatize the entire Taos market

for years to come, not just properties within the land grants.

Property values would be driven downward by this market disruption, destroying

much of the hard-earned wealth of those whose inheritance is mainly in family-held

real estate, and of those many people who saved up in order to live in the Taos area.

Hardships in the real estate and related industries would spread to all other segments

of the local economy, creating a localized economic depression that would hurt

regional businesses and individuals for years to come.

The Taos County tax base would decline, curtailing the ability of Taos County

government to provide essential services, and placing the county’s ability to issue and

pay for bonds in jeopardy.

The potential for heightened racial, social, and economic conflict may increase within

the community, including the possibility of violence.

Not matter how long they stay on the books, these filings in Taos County by land

grant activists may empower sympathizers elsewhere to create similar havoc.

Taos County Association of REALTORS® Fight Title Issues from New Land Grant Deeds Page 4 of 17

May 5, 2011

The REALTORS® Stance

1. It is the Taos County Association of REALTORS' (TCAR) position that it is imperative

that a court of proper jurisdiction expeditiously determine the validity and legitimacy of

these deeds and that until such time as this is done, that these deeds be given no merit.

Statements made by knowledgeable people to local media suggest nefarious motives for

filing the deeds, thus, calling into question the legitimacy of the deeds and supporting

TCAR's position that until proven otherwise, these deeds should not be given the power

to cloud titles of properties within the grants.

2. These filings should have no bearing upon property transactions, including the right of

landowners with insurable title on a property to enjoy all the rights of transfer.

3. The property owners of record are to be considered the legitimate owners until proven


4. The association is dedicated to protecting private property rights of all citizens, so it

supports all steps that can be taken to put an end to this crisis as soon as possible.

5. Damage to individuals, businesses and local governments -- and tension among cultural

groups within our community -- escalate every day that this issue remains unsolved.

Therefore, we urge aggressive, swift, and decisive action from all who can play a part in

bringing this crisis to an end.

6. The association does not discourage those who believe that they have a legitimate claim

to property not in their possession from taking appropriate action in proper legal

channels. Title insurance should protect the innocent insured, if their title was not valid.

Taos County Association of REALTORS® Fight Title Issues from New Land Grant Deeds Page 5 of 17

May 5, 2011

Facts and Figures

• The Taos County assessor lists 9,681 assessed properties within the Cristobal de la

Serna grant on its tax rolls, and 3,074 assessed properties within the Arroyo Hondo grant.

Heirs and non-heirs alike now populate both areas.

• In the past 40 years, New Mexico courts repeatedly have ruled in favor of non-heir

landowners in clear title lawsuits brought by heirs of Cristobal de la Serna. Those cases have

long passed their deadlines for appeal.

• A 2004 GAO report found that land grant heirs have had ample opportunity in the past

to assert their claims and raise grievances in court.

• A similar filing about 10 years ago in Rio Arriba County, claiming all property for

land grant heirs, was summarily ignored by lawyers and title insurers.

• The Taos County assessor produced a special report that warned of “drastic” tax

increases and precipitous value declines if the warranty deeds were to stand. Likewise, Gross

Receipts Taxes charged for transaction services, such as an appraisal, will be affected.

• A bill in the New Mexico Legislature making filing of a known false deed a crime was

vetoed by the governor, who said existing fraud statutes already have that power. However,

New Mexico’s criminal fraud statutes won’t apply in these cases unless intent to deceive can

be proven; an intention to create chaos and publicity by filing false deeds doesn’t rise to fraud.

Taos County Association of REALTORS® Fight Title Issues from New Land Grant Deeds Page 6 of 17

May 5, 2011

What the REALTORS® Wish To Accomplish

1. Seek declaratory judgments and other legal proceedings to make the deeds invalid, void,

or of no effect.

2. Encourage prosecution of those who are assisting the land grants while practicing law

without a license.

3. Change the regulatory environment to allow title insurers to insure over these deeds.

4. Allow market forces to fairly price and compensate for risk to insurers.

5. Place pressure on underwriters to write new policies.

6. Lobby for legislation that will prevent reoccurrence in the future, including a true slander

of title law for non-fraud situations, with strong consequences.

7. Create a campaign to keep the public informed as to the status of judicial proceedings

related to these deeds and encourage real estate transactions within Taos County.

8. Pursue fast-track agenda items to allow quick relief and prevent compounded damage.

9. Prevent old land grant claims from repeatedly being used to harass and intimidate

property owners.

Taos County Association of REALTORS® Fight Title Issues from New Land Grant Deeds Page 7 of 17

May 5, 2011

Anecdotal Evidence

A number of individuals and businesses already have suffered because of these filings.

Some of examples of these hardships are:

In January 2011, the pastor of a church within the Arroyo Hondo grant attempted to put his

former church building up for sale. His plans died when he couldn’t get title insurance, and an

$85,000 deal fell through.

Owners of a commercial building in Taos sought to sell, but they were stymied in their

attempts to get title insurance.

A couple from Denver who found a foreclosed property within the La Serna grant had

financing in hand, but the lender backed out when it learned of the filings. The prospective

buyers lost $6,000 in pre-closing costs.

A Taos-area woman sought to refinance a house to pay for a $47,000 surgery, but she

failed to get the money because of the filings.

An Arroyo Hondo landowner closed on a $60,000 deal but then backed out, objecting to

having to pay an extra premium for an exception on her title insurance policy.

On the day of closing with clear title in hand, the prospective buyer received notice that the

title company had changed its mind and declined coverage; therefore, the buyer lost the cost

of the appraisal, the Realtor lost commission, and the bank lost future mortgage payments.

Taos County Association of REALTORS® Fight Title Issues from New Land Grant Deeds Page 8 of 17

May 5, 2011


The Taos County Association of REALTORS® has taken the lead in defending the citizens’

right to buy and sell property in an unencumbered market. The Taos market is currently under

siege from third-party intrusions, and TCAR has alerted property owners of the situation through

newspaper letters and op-ed articles, email correspondence with the Taos business community,

and interviews on local radio.

The TCAR board stands ready to provide whatever support it can to any stakeholder in court

actions, to lobby for changes in title insurance regulations, and to work to enact laws to keep this

tragedy from ever happening again.

TCAR also encourages all interested parties to utilize proper channels to resolve land grant

issues in New Mexico -- once and for all.

Taos County Association of REALTORS® Fight Title Issues from New Land Grant Deeds Page 9 of 17

May 5, 2011

End Notes

Outside information in this Position Paper came from a variety of sources:

1. Copies of the deeds in question came from

2. The statistics on the potential impact of the filed deeds upon the Taos County tax base

came from a Feb. 24 document issued by Assessor Darlene Vigil. Copies can be obtained

from the Taos County Assessor’s Office or viewed at




3. The GAO Report was issued on Sept. 10, 2001, Document GAO-01-951, at the request of

New Mexico Sens. Jeff Bingaman and Pete Domenici, and Rep. Tom Udall. The

document can be downloaded at

4. The Treat of Guadalupe Hildalgo can be viewed at


5. The statement regarding the intention for filing of the deeds can be found in a March 4

story in The Taos News at

6. Gov. Susana Martinez’ veto message on HB 653 can be read at

7. Anecdotes about specific impacts of the filing of the deeds came from discussions with


8. Information about the position taken by title insurers came from discussion with local

title company executives.

9. The New Mexico statute on fraud is titled “30-16-6. Fraud.”

10. Maps of the Cristobal de la Serna and Arroyo Hondo land grants can be viewed at




11. Information on title insurance came from the America Land Title Association website at

Taos County Association of REALTORS® Fight Title Issues from New Land Grant Deeds Page 10 of 17

May 5, 2011

Appendix A

What Is Title Insurance?

The objective of title insurance is to protect the parties in a real estate transaction, assure them

that the property is free of any unknown encumbrances, and provide coverage should any be

discovered after the sale.

Prior to the transaction, a title company conducts a title search to locate potential problems

and rectify them, if possible. Such problems may be mechanic’s liens, tax liens, easements,

rights of way, air or subsurface rights, or other third-party interests. Any of these discrepancies

creates a “cloud” on the title, which must be either resolved, excluded from coverage, or “insured

around” before a transaction can go forward.

If the title search indicates a clear title, then the local title company and its national

underwriters will assume the risk of future claims -- and the costs of fighting them -- and issue an

insurance policy to the owner.

That action gives the lender assurances that the risk of investing in a mortgage has been

minimized to the greatest extent possible. On rare occasions, a lender who is familiar with local

circumstances will write a mortgage despite an apparent cloud -- usually at higher costs to the

borrower to compensate for the additional risk. Typically, however, national lenders and

secondary-market investors who are not familiar with local risks will shy away from backing

such mortgages.

State law permits title companies to include an “endorsement” in a policy that requires an

additional premium to cover the risk of future title challenges on particular known issues, such as

deeds assumed to be false that cover large tracts of land. However, such a premium must first be

adopted by the regulatory agency – in this case, the New Mexico Department of Insurance. The

department must convene a hearing on the proposed endorsement before issuing its ruling.

What Has Changed In Taos County

The clouds placed upon some 11,000 assessed properties in Taos County by these filings have

put property owners, title companies, and lenders on tenuous ground. The three local title

companies in Taos – who act as brokers or agents for national underwriters -- say they will

consider each policy application on a “case-by-case basis.” One national underwriter has insured

Taos County Association of REALTORS® Fight Title Issues from New Land Grant Deeds Page 11 of 17

May 5, 2011

several titles only if a prior owner’s policy exists, and only up to the value of that policy. Some

local companies have insured over these deeds, but they are beholden to the policies of their

underwriters who ultimately bear the financial risk of claims against any insurance policy. Others

say they will only insure a title if the cloud from these filings is disclosed to the buyer, and an

exception is included in the policy to exempt coverage related to these filings. In practice, title

insurance with coverage over these deeds is not available for previously uninsured properties,

and extremely limited for those previously insured.

Local lenders say they would like to continue selling mortgages, despite the potential clouds

on titles. However, their financial risk in mortgages is normally higher than other assets, so the

unusual situation in Taos only increases that risk – and turns lenders to more secure, less risky

investments than mortgages.

Until these clouds have been permanently removed from any transactions within the two

affected historic land grants, both title insurers and lenders say they will be cautious. A few

transactions likely will get through despite these potential encumbrances. However, Taos

insurers and lenders say that in order for transactions to close, both parties may have to show

greater financial strength than usual and agree to an exception on the title insurance policy – until

this situation is resolved in court. Meanwhile, the present situation will prevent a sizable

percentage of transactions from successfully consummating.

Taos County Association of REALTORS® Fight Title Issues from New Land Grant Deeds Page 12 of 17

May 5, 2011

Appendix B

Parties From Whom REALTORS® Request Assistance

Party Requested Action

Title Insurance Underwriters

and their state and national


Identify conditions that necessitate new policies.

Pursue steps to implement these policies.

File lawsuits to remove impacts of these deeds.

Pressure all parties for prompt resolution.

Taos County District Attorney, New

Mexico State Attorney General

Investigate and prosecute those who have filed

these allegedly illegal deeds.

Assist other parties in enacting laws to make filing

false deeds a crime, and to develop an efficient

means to mitigate their impacts.

Pressure all parties for prompt resolution.

State Legislature, Governor
Enact a law to make slander of title a crime in

New Mexico.

Enact a law to permit false deeds to be removed,

or to be made null and void.

Lobby the governor to issues proclamations from

her office that can help provide relief.

Pressure all parties for prompt resolution.

Determine a strategy to prevent any future false

deed filings.

Discourage legislation that would strengthen land

grant rights for those wishing to use them to work

against private property rights.

Advance a pro-property rights agenda.

Town of Taos and Taos County


Seek legal action to remove deeds, or to make

them null and void.

Lobby for legislation.

Pressure all parties for prompt resolution.

New Mexico Public Regulation


Identify regulations that may prevent insuring

over these false deeds and remove these obstacles

as quickly as possible.

Investigate as to whether the underwriters have

performed according to current regulations.

Pressure all parties for prompt resolution.

Taos County Association of REALTORS® Fight Title Issues from New Land Grant Deeds Page 13 of 17

May 5, 2011

Party Requested Action

Federal lawmakers
Pursue legislation that prevents false deeds as a

means for attempting to settle land grant issues.

Conduct investigations into the effects of these

deeds, and seek permanent solutions.

Pursue legislation to settle land grant issues.

Enable “fast track” resolutions of issues to prevent

extended damage.

Pressure all parties for prompt resolution.

Federal regulators and agencies
Determine the impact of these deeds upon their


Develop strategies to overcome these impacts.

Pressure all parties for prompt resolution.

National Association of


REALTORS® Association of New


Recognize that this issue is not just a local issue,

because its impacts on property rights could

spread throughout the region and nation.

Advise the local REALTOR® association as to

resources, policies, and strategies for dealing with

the issue.

Provide contacts and access to influential people

who could bring solutions.

Provide legal assistance funds to fight false deeds.

Assist in public advocacy issues to assure the

public that it is safe to purchase property within

boundaries of former land grants.

Place pressure on other parties to seek quick

resolution of this issue.

Advocate for political action in favor of those

seeking property rights issues and against those

who are unwilling to act or act against those


Other affected associations and


(Homebuilders, chambers of

commerce, federal loan

guaranteeing agencies, major

lenders and owners of foreclosed


Work with REALTORS® to develop solutions.

Determine the impact of these deeds upon their

missions. Develop strategies to overcome these


Pressure all parties for prompt resolution.

Taos County Association of REALTORS® Fight Title Issues from New Land Grant Deeds Page 14 of 17

May 5, 2011

Party Requested Action

The public
Encourage them to notify us of their impacts, and

notify them on how we can help.

The media
Push for objective and accurate reporting of the


Voice our concerns in interviews, op-ed pieces,

and letters to the editor.

Inform other media outlets in the state of the issue

and consequences should similar deeds be filed


Educate the public on the hidden agenda of some

Land Grant activists and the threat that it poses to

private property rights.

The Cristobal de la Serna and

Arroyo Hondo land grant

associations and others

contemplating false deed actions

Convince them that false deeds are not a

constructive way to advance their agenda.

Let them know that REALTORS® will not object

to attempts to claim lands or recover damages

where they can demonstrate that they are the

rightful owners, provided that they do so using

established legal procedures.

Educate them on the negative impacts that false

deed actions are having upon heirs and others

sympathetic to their cause.

Taos County Association of REALTORS® Fight Title Issues from New Land Grant Deeds Page 15 of 17

May 5, 2011

Appendix C


Taos County Association of REALTORS® Fight Title Issues from New Land Grant Deeds Page 16 of 17

May 5, 2011

Taos County Association of REALTORS® Fight Title Issues from New Land Grant Deeds Page 17 of 17

May 5, 2011

Thursday, June 2, 2011

How much insurance is enough?

Daily Real Estate News | May 31, 2011 | Share
How Much Home Insurance Is Enough?
Home Owner's insurance policies are often an after-thought--that is, until disaster strikes.

Home owners in Joplin, Mo., Tuscaloosa, Ala., and other cities recently flattened by tornados are now finding that out too late as they discover that their insurance policies likely will not entirely cover the costs to rebuild.

While most home owner's insurance policies will cover tornado damage, many home insurance policies are undervalued. In fact, one study from 2008 by Marshall & Swift finds that 64 percent of homes are undervalued for insurance purposes.

Home Owner's insurance coverage typically comes in three categories:
  • Replacement cost: It covers the cost of replacing or repairing a home, based on a certain dollar limit. However, some home owners with this type of insurance find that their insurance does not reflect increases in the cost of construction since they originally took out the policy.
  • Extended replacement cost: The insurance company will pay a certain percentage above the replacement cost to account for inflation. However, home owners still may face inadequate coverage with this too, particularly if they haven’t updated their insurance coverage in awhile.
  • Guaranteed replacement cost: Regardless of how much prices have increased since first taking out the policy, this coverage will pay the total cost of replacing your home. This coverage can be expensive and also difficult to even get.
Most standard home insurance policies also include an "inflation guard" provision, which automatically adjusts the coverage limit when a policy is renewed, but some coverage may charge extra for this.

Many policies also will cover lost or damaged possessions at about 50 percent to 70 percent of the amount of insurance on the home. (The USA Today cites an example: If your policy provides $250,000 to rebuild a home, you may stand to also get $125,000 extra to replace your damaged belongings.)

Source: “If Disaster Strikes, Will Your Insurance Come Through?” Gannett News Services (May 31, 2011)

Read More

5 Things to Know About Home Owner's Insurance

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