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Law Offices of Ronald W. Rutz
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August 11, 2005: Rural Real Property

Q: This time of year I receive a very large number of questions concerning purchasing rural real property. I decided to update an old column to act as a guideline for use by potential buyers. So here is part one of a short list, in no particular order, of factors to review when purchasing acreage. The remaining points will be in the next column.

A: First, satisfy yourself that you are actually getting the number of acres that you expect to acquire. Many contracts are worded to give significant wiggle room on what the seller must convey, even if the approximate acreage is listed. It might be better to have a price per acre as opposed to one overall price for the parcel. Check for the survey pins and even insist upon a survey. The real boundaries may not be where they appear to be. This is particularly important if a building, big trees, a water source, etc., are near the border.

Check the fences carefully. Are they located in the right place and in good repair. Otherwise, such adjustments or fix ups can be very expensive for a new owner. (Note that cowboys and rural property owners actually spend a significant amount of their time unromantically fixing fences instead of hanging with the female bovines or moseying along on "them their" ponies.)

Unless you have direct public access to the property, examine the ingress and egress easement documents carefully to be certain that you have valid access to the property and that you can use the easement as you contemplated (i.e., transport machinery, run water or electrical lines, increase use if you subdivide, etc., in addition to just traveling back and forth). Additionally, determine who is responsible for the easement repairs and/or maintenance charges. If several users share expenses, is there an effective mechanism to force contribution? Remember governmental entities are only responsible for public roads and unless used by school buses may remain ungraded or unplowed longer than you would like.

Also, remember that there is no easement for your "view," so do not expect neighbors to be sensitive to your esthetics expectation, unless there are enforceable covenants in place or the appropriate zoning ordinances exist that you could use for your benefit.

Check the property for unrecorded easements (people using the property) because others may have the right to cross the property, cut trees, hunt, run livestock, mine rock, etc., even if references to these activities does not appear in any recorded documents. Walking the property and looking for signs of such activities is a must.

If water is involved, has it been more than ten years since part or all of the water was used or leased? If yes, then the unused part of the water right could have been forfeited under the abandonment rules, even if you paid the "owner" for it as part of the purchased price.

For ditch water, will the running charges be increased after the sale and do you have enough shares in the ditch company or lateral company to open the headgate? Where is your headgate? Are there lateral ditch easements in place, by which water is brought from the main ditch across others’ property to the real estate you are interested in purchasing? Even if you bought water, do you have the right to use the lateral ditch from the main ditch to run the water? Often stock ownership in the lateral ditch is required in addition to owning stock in the main ditch and possibly also owning a separate water right.

Just because you have water running through your property does not give you the right to dam or use it. And if there is enough water to float a boat, be prepared for the possibility of recreators bobbing by.

What is your domestic water source? Do not automatically assume that you will drill and find enough usable water or that a well you drill will hit potable water. Has the well been adjudicated or is it recognized as an exempt structure?

If well water is not exempt, you might be required to join and pay fees to an underground water user association, which can be very expensive. And check out the septic system to be sure that the "leech field" or the containment tank you were planning will be permitted by the county planning office or the one in place is still proper.

Will you have an insect problem, such as from pine beetles, or a weed infestation problem? It would be a shame to buy that property covered with trees only to have many of them dead the next year or find that the ground is covered with noxious vegetation, which could be costly to eradicate.

Well, so much for part one of the "short list." To be continued.

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