Rural Land Purchase and Adverse Possession 

There are special considerations when buying rural land for development. Buyers often focus on the mortgage interest rates, fees and loan costs but in California, for example, there are many other pitfalls awaiting the novice.  you could end up with a lot you can not build upon.

You must know if the lot you are purchasing meets basic service requirements. There can be problems associated with road access, lot boundaries, habitat restrictions, water, and sewage disposal. Any of these issues can greatly affect the feasibility of your rural land development and home building project.

You need an experienced real estate broker or agent working for you exclusively as buyer's agent on such a purchase.  The agent can help you open an escrow to manage the purchase terms, money and closing of your raw land deal.

Weasel Clause

Your agent can help you write a well constructed purchase offer.  The offer must provide for buyer contingencies. A contingency is an escape clause for you, the buyer. Such a clause is sometimes called a "Weasel Clause".  It can allow you to weasel out of the deal if something pops up that you did not expect.

It is not uncommon to find that the seller of rural land does not know the true boundaries of the land. You are buying a lot that is described by a legal methodology. The address is just an informal designation for a specific lot. It may or may not be accurate.

Perhaps the seller has already had the lot surveyed and can provide you with proper documentation. It most cases you will want to have the property surveyed by a licensed surveyor and have the lot corners marked. The surveyor will mark the borders of the lot with stakes.

Plot Plan

You also will receive a plot plan from the surveyor that outlines the lot, shows neighboring lots and any dedicated roads to the lot. In your offer request the seller pay to have the corners marked by a licensed surveyor.

After the property is marked by the surveyor you should go to the land and physically view the corners and other lot boundaries. What if a neighbor has fenced off part of the lot? The fencing is the neighbor's claim on the portion of the lot within the fence.

Has the neighbor been using the land for grazing or farming. Whatever the use, if it has been in existence for a number of years, there is an issue of who owns that part of the land. This area of law is called adverse possession. You will need to consult with a real estate attorney if you find any indication that others have been using the land.

Habitat Zones

What about special habitat zones? A lot located within a designated zone may have restrictions. There may be some species of plant or animal that is protected within the area.

Sometimes the habitat zone will allow for development but only after a special study is conducted. You may be able to build, but not until the impact study is prepared.

To determine if the lot is within a special zone contact the county land use or planning department and ask about any restrictions or zones that may impact the lot. If a special study is needed ask the seller to pay for the study in the offer.

Roads to the lot can be an issue. Some counties require each lot to have access via a dedicated road before building permits can be issued. A dedicated road will appear on the plot map prepared by the surveyor.

Easements

Some parcels of land will have easements granted allowing you to cross an adjoining lot for access. This is adequate in many counties but not all. Be sure to find out through the planning department what the road requirements are and if your lot complies.

Water is the life blood of land. If there is a local water district, learn how far you will need to bring in the water lines. Typically a well is drilled for back country land.

You need water within a reasonable depth with a bare bones minimum of 5 gallons per minute production. It will save you at least 5 thousand dollars if you can get 10 gallons per minute because you won’t need to store and pump water for your use.

Modern fire protection typically requires a fire tank be installed on your lot that is available for fire fighters to protect your buildings. You can use that tank for drinking water but it creates problems with storage and water contamination from water sitting in a tank to long prior to use.

Well Water

Well water can have contamination problems. Some wells produce water with sulfur gas dissolved in the water. Sulfur gives a foul rotten eggs odor to water. Or you may find the water has excessive dissolved iron content, giving the water a rusty appearance and unpleasant taste.

Some times fluoride is present in excess amounts that require treatment to remove. You can discover what your well drillers experience has been in the area. Try talking to the neighboring lot owners and see what problems they may have found. Water can be treated to be potable but you really want to keep it as simple as possible.

If there is a well on the lot have it tested to find out if the water is drinkable.

Finally septic systems are used throughout most rural areas. Unless your lot has sewage services nearby you will need a septic system. The lot needs to be perc. tested by a licensed soils engineer to determine the feasibility of a septic system.

The engineer will provide you with a report that defines the septic system required to build on the lot. If a lot will not pass a peculation test you need to find another parcel to buy.

Author Lou Tompkins provides mortgage and Real Estate assistance in California. http://www.loutompkins.com