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    93 Plus Potential Land Disclosure Issues

    by Lou Jewell, ALC

    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 fourteen states have such a document available for the real estate industry.

    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.

    January 2011 NCAR approved Form 502 “Land Information Worksheet” in our Commercial Forms. This is not a required form but our NCRCA Board of Governors are looking to move it to our Legislative Committee in the future.

    Last year Virginia association of Realtors® adopted this form and other NCRCA Commercial forms.

    Here are a few examples of the seventy-three plus potential Land Disclosure issues currently in place by the several 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 2009 at the NAR Mid-Year Convention meeting to include the four letter word “Land” in Article 11 of the code. It was approved by the NAR Board of Directors in San Diego in November and adopted January, 2010).

    “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: http://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.

    See: http://www.rliland.com  for the nearest RLI agent and the RLI programs and educational opportunities.

    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 Form 502 “Land Information Worksheet” form already approved. The potential risks and liabilities created because of non-disclosures can be very costly.

    Lou Jewell ALC
    Accredited Land Consultant
    RLI Land 101 Instructor
    Land Pro Real Estate, Inc.
    www.mylandpro.com

    Discussion — 2 Responses

    • D'Arcy Browning October 27, 2016 on 8:21 am

      Excellent, thank you

      Reply
    • Brian Andrus October 28, 2016 on 5:29 am

      A very good and very needed article. Thank you, Lou.

      Brian Andrus, CCIM / ALC
      Broker/Owner Stonebridge Real Estate, Inc.
      Clearwater, Florida

      Reply

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