Land Use Risk Managment

In the marketing of sale of vacant land the extent to which the purchaser or the seller may encourage you to offer expertise in order to fill the knowledge and information gap is the extent to which you must be aware and control the level of your risk injected into the transaction. That which you represent so shall you be held accountable. A personal opinion can be interpreted as expert or legal advice. The following sample questions will help you to identify those areas where you must limit yourself to qualified answers or restrict involvement. Purchasers are reluctant to recognize the element of risk in the possible variables in a land purchase and will attempt to shift that risk to the licensee.

Copies of local zoning or planning laws provided to the purchaser (with cover letters for the file) will relieve the pressure of interpretation on the part of the REALTOR.

Informed consent and comparable value are legal tests for representations in land sales. Comparably priced land parcels can vary widely in permitted uses and actual development costs. In many instances land use regulations will be moderately to severely restrictive of the purchasers options. Make no assumptions regarding the purchasers previous experience with land use laws.

1. Q.: Is the property subdividable?

A.: The only approval for subdivision is given by the Planning Board, within the framework of the Planning and Zoning Law. I can find out how much copies would cost and obtain one for you.

Ex.: The Planning Board has evaluation responsibilities and subjective prerogatives. Sufficient acreage to meet zoning requirements does not automatically guarantee subdivision approval.

2. Q.: Can I use my home for business and/or accessory apartment?

A.: Check with Zoning Enforcement Officer and obtain a permit or letter of response or authorization if possible.

Ex.: The purchaser's concept of "Business" and town definitions of customary home occupation may be substantially different, as are specific definitions and requirements for accessory apartments.

3. Q.: Is a Variance/Special Use Permit easy (difficult) to obtain?

A.: Since either would require a decision of a Board, I cannot answer. I can provide copies of the codes for your attorney to review.

Ex.: You must avoid the trap of subjective judgement. Be cautious regarding the implication that personal contracts or local good standing can smooth the path. This can become an implied representation which will, in the mind of the buyer, become part of the "listing".

4. Q.: Can you get a building permit for me? Can you "GET" approvals for me?

A.: I can have forms sent to you for you to complete and return. Approvals should be handled by you or representative.

Ex.: Involvement in any permitting process should be undertaken only if responsibilities and compensation are agreed in advance with expertise and previous experience to reinforce your qualifications.

5. Q.: Can you get me a contractor?

A.: I can give you several names to choose from.

Ex.: Unless your firm exclusively represents a builder, only one contractor is a subjective judgement for which you can be held responsible.

6. Q.: How much does the "average" septic system and well cost?

A.: There is no such thing as average in the construction of a septic system. The cost can be estimated only by an experienced contractor from the specifications on a Board of Health Approval or engineer's plan. Well depths are individual and can vary widely in the same area.

Ex.: Trap! The answer says it all. Defer to experienced source of information.

7. Q.: As long as the wetlands are not on my property, I don't have to worry about them. Right?

A.: Not necessarily. State required setbacks from wetland areas can still influence how you can use your property.

Ex.: This scenario can apply to adjoining streams, lakes, rivers, flood plains, coastlines, wildlife sanctuaries, historical sites, state and national parks, and watershed areas.

8. Q.: As long as I stay within the setbacks, can I building whatever I want to build?

A.: The Zoning Laws vary from town to town and also within a town as to use, size, percentage of lot coverage, height, style and public highway access. Deed restrictions and building codes must also be consulted.

9. Q.: I do not want to building on the property now. I'll have the Board of Health Approval done later.

A.: That is within you right. You know that you cannot obtain a building permit without approval for on lot septic system and you know that these systems vary widely in cost. However, if you elect not to have this test prior to closing the sale contracts will contain a waiver of responsibility and liability for the seller and the broker.

10. Q.: If there is already a survey, then there is no question about what I own, right?

A.: Partially. Does the survey show the locations of buildings? Power poles? Water mains? Driveways? Land features? Survey stakes or monuments? Easements? A survey does not give complete information on all the aspects of the title to the property only a title search and title insurance can give a complete picture.

11. Q.: If there is an existing survey to the property, I do not want to pay for another one.

A.: The existing survey should be recertified to you and your title company for the date of the closing. This should include a visual inspection of the property by the surveyor and location of all survey monuments or rods.

Ex.: Over time and with improvement of adjoining properties, encroachments (fences, driveways, plantings, buildings etc.) or removal of survey stakes can occur. A title policy is written with the disclaimer "as shown by survey". The liability for remedy of a problem not shown on the survey may fall to the buyer.

12. Q.: I have the opportunity to list a large number of building lots in an old subdivision. The owners want to liquidate quickly and are prepared to sell substantially below market values.

A.: Research!! How old is the subdivision? Do you have CURRENT confirmation in WRITING from the permitting Legal Unit (county, town, agency) that the lots are buildable? Has the zoning been changed? Have county or state sewage disposal regulations changed? Was there a time limit on any of the bundle of approvals necessary to obtain a building permit? Is this a paper subdivision? Was the subdivision ever filed in the public record?

Ex.: "Building lot" is a REPRESENTATION. Current documentation is essential. Even approved subdivisions can be voided over time by overlay regulations or failure of the developer to comply with approval requirements.

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