Buying Land

93 Plus Potential Land Disclosure Issues

Anyone involved in a typical Land transaction, leasing, buying or selling may be exposed to 93 plus potential Land issues. For years now I have advocated for need of a “Land Disclosure” form throughout our country. So far only four states have such a document available for the real estate industry and they are Arizona, California, Georgia and Tennessee.

Most states have “Residential Property Disclosure” forms which are executed at time of the listing by the sellers and reviewed and signed off by the buyers during the offering process. We recommend these forms to also be used even in cases where you are selling without the assistance of a real estate firm.

North Carolina’s “Residential Property Disclosure” form has only twenty-one issues, far less than the Land form who should have and fewer than other comparable forms found around the country.

Here are a few examples of the ninety-three plus potential Land Disclosure issues currently in place by the four states previously mentioned.

“Are you aware of any?”

  • Encroachments
  • Easements
  • Endangered species: Plant Animal
  • Flooding whether currently or previously
  • Forfeiture of rights (mineral, timber, development, etc.)
  • Government sponsored clean-up of the property
  • Goundwater contamination
  • Illegal uses (manufacture of liquor, methamphetamine, marijuana cultivation, etc.)
  • Landfill operations: legal or illegal or previous planned
  • Mineshafts or tunnels
  • Noxious fumes or odors
  • Pipelines (natural gas, petroleum, etc.)
  • Well water contamination: current or previous
  • Conservation Easements
  • Stream Restorations
  • “Are there any Gravesites on the Property?
  • “Are there any animal cemeteries or animal burial sites?
  • “Are you aware of the presence of:”
  • Asbestos, Benzene, Fuel/chemical storage, Paint (Lead based paint) (Other paint/solvents), Methane gas, Pesticides, Radioactive material, Radon gas, Underground storage tank(s), EPA Phase I, II or III studies.
  • “Are you aware of any past or present issues or problems with any of the following on the property?”
  • Soil settlement/expansion
  • Drainage/grade
  • Earth Movement
  • Erosion
  • Flooding
  • Fissures
  • Dampness/moisture other than around rivers, streams, lakes, etc.
  • Sliding
  • Wetlands or previous wetland areas
  • Do you have a survey? When was it done? Who did the survey? Do you have a copy? Has it been recorded?
  • Is or will it be subject to protective covenants, conditions or restrictions?
  • Is the legal owner(s) of the Property a foreign person or a non-resident alien pursuant to the Foreign Investment in Real Property Tax Act (FIRPTA)?
  • Is the Property located in an unincorporated area of the county?
  • Is the Property subject to extra territorial jurisdiction?
  • What is the current zoning of the Property?
  • Has the property been timbered in the past 25 years?
  • Harvest monitored by a Registered Forester?
  • Timber replanted after the harvest with (species)
  • Is the property in an Agricultural or Forest tax deferment program?
  • Coming soon “Carbon Credits” that will also need to be disclosed.

Land can have a lot of issues and knowing all the aspects involved is critical for all involved in any of these transactions.

The Real Estate Industry “Realtor®” program has an established “The Realtor® Code of Ethics” as a guideline for practicing real estate. This code has seventeen articles. Article 11 states:

“The services which Realtors® provide to their clients and customers shall conform to the standards of practice and competence which is reasonably expected in a specific real estate disciplines in which the engage; specifically, residential real estate brokerage, real estate syndication, real estate auction, and international real estate.” (Our Professional Standards Committee voted unanimously in Washington in May this year at the NAR Mid-Year Convention meeting to include the four letter word “Land” in Article 11 of the code, subject to the Executive Committee final approval this fall).

“Realtors® shall not undertake to provide specialized professional services concerning a type of property or service that is outside their field of competence unless they engage the assistance of one who is competent on such types of property or service, or unless the facts are fully disclosed to the client. Any persons engaged to provide such assistance shall be so identified to the client and their contribution to the assignment should be set forth.” (Amended 1/95)

See: www.realtor.org/MemPolWeb.nsf/pages/Code

Unfortunately when one goes to real estate school around the country and takes the 160 +/- hours of classroom instruction and testing, they are not taught about Land, Commercial real estate, Property Management, etc., only about residential property and real estate law. Do not assume that all real estate agents have the knowledge in the specific areas of brokerage.

If you are buying or selling Land or Farms or Ranches, make sure to find a member of the Realtors Land Institute to help you in this process. Specifically look for an Accredited Land Consultant, their Designation for those experts in Land who have worked hard to achieve it.

Consult with a Land attorney if you plan to create your own “Land Disclosure” form. If you are a real estate agent, please check with your Broker-in Charge before creating or using even if your state has a standard required “Land Disclosure” form already approved. The potential risks and liabilities created because of non-disclosures can be very costly.

This content may not be used or reproduced in any manner whatsoever, in part or in whole, without written permission of LANDTHINK. Use of this content without permission is a violation of federal copyright law. The articles, posts, comments, opinions and information provided by LANDTHINK are for informational and research purposes only and DOES NOT substitute or coincide with the advice of an attorney, accountant, real estate broker or any other licensed real estate professional. LANDTHINK strongly advises visitors and readers to seek their own professional guidance and advice related to buying, investing in or selling real estate.

About the author

Lou Jewell ALC

Lou Jewell is an Accredited Land Consultant and the author of An Insider’s Guide to Land Investment. He is the Broker of Dan River Real Estate, Inc. in North Carolina and is an RLI Land 101 Instructor. He served as the President North Carolina RLI Chapter 33 in 2003 and the NCRCA Board of Governors in 2008.

13 Comments

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  • Here is just one example of your generoisty both as a teacher and consultant for the LAND. Thank You.

    “I love the idea of stewardship.”

  • Thanks janeAnne~,

    This is a very important document that I hope as time goes on that all states and territories will adopt.

    The fact that our industry, the real estate industry, has not incorporated more Land education in the basic licensing courses offered today should be addressed. To have the knowledge of the potential liabilities under “agency law” would help all of us, buyers, sellers and agents, attorneys, title companies and more limit the potential liabilities in a Land transaction…and if you really look a real estate transfers, they all involve Land…even that suburban home.

    Our GRI classes should choose to incorporate the Realtors Land 101 two day course as an elective. A few states like Nebraska already do.

    Lou Jewell ALC
    “A Voice for Land”

    Maybe this article will help.

  • Good point Lou! Here in Oregon we do have a land sale disclosure form for sellers to fill out! Another way to protect yourself as a buyer is to use someone with experience and accreditation in land sales! Like ourselves!

    • Hi Lou,
      I have not completed all of the requirements, but do use the RLI website and know several of the ALC’s here in Oregon. I might add they are a great bunch of down-to-earth folks! (Pun intended:-)). I will email the document to you later today, am just running out to an auction.
      Dee

  • Hey Lou, this is a very good article,I’m sure it will serve me well in the future.
    Thanks again, Charlie Bugge’ (252-723-2111) Carolina Homes Realty Inc.
    PS Debbie Johan says Hi!

  • Oh Please tell Debbie hello…my best and brightest student who actually listen to my advise and made money…

    Ask her to email me…I need her vote in September for National VP RLI…

    She is a good one…Thanks for your kind comments…Land Disclosure is a matter of consequence…

    Lou Jewell ALC
    “A Voice for Land”

  • Thanks Dee,

    I look forward to receiveig it…Keep working on that ALC and get those guys out there to vote for me in September for National VP RLI….

    Lou Jewell ALC
    “A Voice for Land”

  • Hey Lou,
    The older I get the more important ‘lists’ become…This is an extensive one that will be in my possession at all times. With your permisson, of course. Thanks!

  • Very interesting Lou! We are looking forward to buying property (farm land) and these are all relevant. For the non initiated (yours truly) I wonder if you could elaborate on the differences between:
    “easements” and “conservation Easements” and “protective covenants, conditions or restrictions” as they sound all pretty much the same — maybe there are clear distinctions to those who know the trade but as I educate myself, a little further info would be much appreciated. A draft of a possible full disclosure agreement including all these and then some would certainly be very helpful, but this is a great starter! Thanks for sharing! J.

    • Hi Joao,

      I referred to “easements” as a means of accessing Land that has no road frontage. There are good easements and not so good easements. I suggest you Google the word “easement” because I could write a book on that subject.

      “Conservation Easements” is a different animal all together. Conservation Easements is a legal process whereby a third party, usually a nonprofit organization buys a portion or all of your Land and puts covenants on the Land that will protect it “forever” in it’s natural state. Again, I suggest you Google “Conservation Easements” and bone up on the subject.

      Most developers like me when creating a development will put “Restrictions” as to what the Land can be used for. Example, size and type of construction, no junk or unlicensed vehicles, garbage must be maintained in a sanitary condition and disposed of on a weekly basis…

      Personally I prefer the covenants to be called “Protective Covenants” as opposed to “Restrictive Covenants”. I would rather be “Protected” not “Restricted”. For years I have advocated a change of the terminology to the attorneys who write these covenants.

      Our North Carolina Commercial Forms Committee for which I am one is current finalizing our draft to our State Board for approval this fall.

      Stay tuned to LindThink.com for I plan to write an article to once the form is approved.

      Lou Jewell ALC

  • Thoughtful article . I am thankful for the facts , Does anyone know where my company might get ahold of a blank 2013 TN Residential Property Condition Disclosure form to type on ?

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