Thursday, 12 June 2014 20:54

Check Land Rights Before You Buy Or Sell A Home

You own the house, but do you own the land it sits on? Before you buy or sell a home, you should check to see who really owns the land beneath the structure. A family in Tampa Bay, Florida found out at closing that the home builder had signed the land rights away to their own energy company. This granted the energy company "mineral rights", allowing them to drill, mine, and explore for precious minerals beneath the family's home.

How do you protect yourself from such surprises? How is this even possible? Here are some things you need to know to avoid this "gotcha":

You Probably Do Own the Land

Most real estate ownership laws regard the house and the land it sits on as one and the same. Exceptions do pop up, though. An owner may discover an easement for a sidewalk or driveway that cuts right through their property. Therefore, it's very important to carefully review contracts and disclosures.

Contracts and Disclosures

Whether you're a home-builder or a home-owner, you can't make any claims of property rights until you disclose those rights in a contract or disclosure statement.

Each state handles this differently. Many disclosure statements require the seller to tell the buyer if someone else has a claim on the property, or even if the buyer is limited to claims in the future. If the seller doesn't know, or if the state you are buying in doesn't require this disclosure, then you need to review the property's title report carefully before you even think about signing off.

Title Report

It has happened that a seller was unaware of an existing claim to the property. For example, a current owner who bought in a newer subdivision directly from a home-builder might not be aware of a situation such as the one in Florida. Easement, encroachment, or even a small lien can exist that a current seller is unaware of. It is important at this time for all parties to work together to determine a best course of action. Any access to the land beneath the home would have to be granted via a deed, and this would show up in a preliminary title report.

This report provides information on ownership, loans, easements, encroachments, deeds or trusts, unpaid taxes, and anything else against the property. A home-builder who deeds mineral rights to himself would have to record that deed, and it would stay in place until they and the current owner agree to take it off of the report.

Avoid Last-Minute Surprises

The family in Tampa Bay didn't realize until too late that they had signed over to the builder's holding company "eternal rights to practically anything of value (found) buried underground, including gold, ground water, and gemstones," according to the Tampa Bay Times. That's bad enough for the family while they're living in the house, but even worse, it could cause trouble for them when they decide to sell.

Always give yourself enough time to do your "due diligence". Many people think "due diligence" equals "property inspection". With new property, some might not feel the need to do a property inspection. What they don't realize is that there is so much more to a property inspection than making sure the pipes don't leak and the foundation hasn't settled at an odd angle.

At closing is never a good time to learn that you aren't getting everything you think you're paying for. Deeding property rights isn't something that gets buried in the fine print and is thus easily overlooked. Such a thing would require paragraphs, if not pages, of documentation.

Clearly, your best course of action is to carefully read and understand all of the documentation and disclosures prior to signing. If you're uncertain, contact us and let us help you decide if the purchase you're looking at is right for you.

Free Consultation

Name *

Please let us know your name.
Phone *

Please enter a valid 10 digit number
Email *

Please let us know your email address.

Springfield IL Homes

homes for sale near springfield il

Click here to view an interactive map of properties Jim Fulgenzi Sales Force have assisted clients in buying or selling.

Featured Testimonial

"Your attention to detail and incredible knowledge is invaluable...our experience finding a home in Sherman IL was first rate!"

Jim & Pat O. - Sherman IL

Copyright 2012 - Springfield IL Real Estate Company | 2475 West Monroe, Springfield, IL 62704 | 1.217.341.5393
Real Estate Company in St. Louis Mo

Website Search Engine Optimization and Development By St. Louis Website Marketing Company Elite Web STL