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Law Offices of Ronald W. Rutz
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March 13, 2004: Buying Rural Real Property

Q: This time of year many people are looking to purchase rural property and ask many, many questions. So it might be time to revisit some of the factors to recognize and to resolve prior to the closing.

A: ACCESS: Unless there is direct public access to the property, examine the property ingress and egress easements carefully to be sure that you can do what you contemplate (increase traffic use, transport machinery, run water or electrical lines, prevent others from using, etc.) and determine who is responsible for the easement repairs and/or maintenance charges. If expenses are shared by several users, is there an effective mechanism to force contribution? Remember the County has no obligation to keep public roads open, let alone your right-of-way winding over hills and dales.

WATER: If water is involved (whether from a well or surface use), 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 be forfeited under the abandonment rules. For ditch water, will the running charges be increased after the sale and do you have enough shares in the ditch or lateral company to open the headgate so you can use the ditch? Where is your headgate? (What is a headgate?) If a stream runs through the property, do you have any rights other than watching the water run by as it erodes or floods your property? If there is no water source, can a well be successfully drilled?

INSECTS AND WEEDS: 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 next year, and the rest dead the following year, or to buy property infested with noxious "weeds" which may require removal at no small expense to you, assuming that you can even control the infestation.

ENVIRONMENTAL ISSUES: Are there environmental problems such as with oil and insecticide spills from prior agricultural users, old tires, a dump that the previous owners created, etc.? And even though the ground is barren and dusty, it could be classified as wetlands or even a flood plain, thereby preventing you from building or even repairing current structures. Be certain that there are no threatened or endangered plants or animals present on the property. Otherwise, you may learn more about the environmental laws than you ever wanted to know, with the accompanying restrictions imposed on your use.

FENCES: Check the fences carefully. Are they located in the right place? You may think that you are buying 35 acres, but if the fences enclose less land, you may be stuck with that enclosure and still have to pay the full price. Are the fences in good repair (very expensive otherwise)? 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.

USE EASEMENTS: Check the property for unrecorded easements – i.e., other people using the property, even if not part of the documented paper chain of title. Others may have the right to cross the property, cut trees, hunt, run livestock, mine rock, etc. and you cannot stop these uses on "your property."

CONSERVATION EASEMENTS: Have certain development or conservation "easements" been conveyed away? It is currently politically correct to push these land restrictions (although it seems the tide is turning), but remember as a buyer you are stuck with the property "as is" even though someone back up the chain of title decided to cash in on the then current estate planning fads. Unless properly negotiated, these restrictions last forever and do inhibit land use and depress property values.

ZONING: Even with agriculturally zoned land, an owner can keep only a certain number of animals per acre, depending on the kind of animal and intended use. Yes, the county can tell a land owner that they either need to get rid of the extra horses or get a zoning variance. Thus, you may not be able to become that ostrich baron after all without securing zoning changes or variances to legally house that herd that you have in mind.

MOVEABLE PERSONAL PROPERTY: What stays with the property and what goes? The storage bin, the well pump, the gas tank, the propane tank, irrigation tubes, livestock panels, etc. may be long gone by the time you arrive after the closing. So don’t "expect" anything. List all such items in the sales contract.

MINERAL RIGHTS: Are you getting all of the mineral rights? If not, realistically assess how this will impact what you plan to buy. Too many buyers have found oil and gas or mining activity in that pretty pasture and even worse may only be entitled to 1/2 or less of the 1/8 of the owner’s royalties as compensation for the destruction of the "Norman Rockwell" scene right outside your picture window.

INSURANCE: As a red flag item, be sure that the proper permits were obtained to build or repair properties, especially from a safety point of view. At the very least, especially with older homes, have your people inspect the structures. And most importantly, check the insurance history of the property. Otherwise, you might find the structures very expensive to insure, and they may even be uninsurable.

NEIGHBORS: Finally, take your neighbors as they are (just like relatives). If you move near to a feed lot, a lumber mill, an area set aside to store or grind hay, or ensilage pits, you may have problems adjusting. But it is your problem.

I hope that this was not too boring and that one or two readers lasted this long, reading to the bitter end. But I did promise a number of people that I would again touch on this topic in a column at some time. And this is the "short list." Just be thankful that you did not have to wade through my long list. Remember, do not ask an attorney to list the negatives. You may never stray outside the city limits again!

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