As discussed above, Grassdale remains Open Space Land protected by multiple statutes. As a result, it is impossible for FDRPC to transfer a valid title for the property. Two tactics have been used to get around the title issue.
On March 25, 2021, FDRPC signed an “Indemnification Agreement” which remained secret until revealed by FOIA. This Agreement states:
“A review of the state of the title to the PROJECT and the enabling legislation for the Seller (FDRPC) reveals that the COMPLEX was purchased on or about September 15, 1994 by the State of Delaware with Delaware Land and Water Conservation Trust Funds under the Delaware Land Protection Act…” Land purchased with Delaware Land and Water Conservation Trust Funds is protected “in perpetuity” and cannot be sold for private development.
In this “Indemnification Agreement”, FDRPC admits that “the SELLER (FDRPC) has notified the PURCHASER that the SELLER is not able to correct such TITLE DEFECT.” In a July 22, 2020 Memorandum, FRDPC Counsel, Max Walton, claimed ignorance of these statutes on behalf of himself and the FDRPC Board.
Unable to deliver legal title, FDRPC entered into this agreement to indemnify the Purchaser’s title company for $100,000 in legal fees to defend against a Delaware Land Protection Act claim.
In the Indemnification Agreement, this tactic is referred to as “Affirmative Coverage” which involves providing money to defend a claim which cannot be defended based on legal merit.
Special Warranty Deed
The Grassdale sale was closed with a Special Warranty Deed. Below is the Investopedia definition of this type of deed:
“A special warranty deed is a deed to real estate where the seller of the property—known as the grantor—warrants only against anything that occurred during their physical ownership. In other words, the grantor doesn’t guarantee against any defects in clear title that existed before they took possession of the property.”
FDRPC acquired Grassdale in March 2016 with this deed which carried forward all the protections of the original 1994 deed. Given this history resulting in the uncorrectable title defect, the Special Warranty Deed would not seem to provide valid title.
In addition, like virtually all Grassdale legal documents obtained through FOIA, this Special Warranty Deed is incomplete lacking a critical Exhibit B “Approved Title Matters”.