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Buying Land? Could a Sinkhole Sink Your Investment?

buying land? could a sinkhole sink your investment?

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Published date:

April 18, 2016

Last updated date:

April 18, 2016

By Manny Manriquez

By Mark Bingaman Social Media Expert with the Indy Real Estate Experts You've seen the news reports and probably shaken your head at the surreal scene: Out of nowhere, a massive hole appears in the ground and either swallows or threatens a home, building, or neighborhood. You briefly wonder if it could happen to you. Is it possible that one night you could be awakened by the terrifying sound of part of your house collapsing into a massive hole? According to the U.S. Geological Survey, sinkholes are most prevalent in areas where rock below the surface is composed primarily of limestone, carbonate rock, salt beds, or other rocks that easily dissolve as water flows around them. As a prospective property owner, you face the most risk if you are considering buying land in the states of Florida, Texas, Alabama, Missouri, Kentucky, Tennessee, or Pennsylvania. While sinkholes are most common in these states due to the composition of rock that underlies the ground there, these scary craters can open in any state or geographic locale and often can be blamed on human activities. Man-Made Sinkholes Those buying land in an area where any sort of mining may have occurred should keep in mind the possibility that abandoned mine shafts could be lurking beneath the property, weakening the ground and eventually leading to a sinkhole. Other land-use practices that could lead to the formation of a cavernous hole on the property include groundwater pumping or many different types of construction and development practices. Sinkholes can strike when natural water-drainage patterns are altered and different water-diversion systems are implemented or runoff-storage ponds are created. Sinkhole Professional Testing If you're concerned about possible sinkhole development (past, present or future) on a piece of land you want to buy, an inspector who is a licensed professional geologist may be helpful in determining basic risk and whether a sinkhole existed previously on the property. There are a number of more extensive testing procedures that can be conducted, including soil boring and ground penetrating radar, but these are expensive. Real Estate Law: Sinkhole Disclosure Obviously, the development of a sinkhole can be most catastrophic (including financially) in an urban or residential setting where loss of life could occur and buildings severely damaged or completely destroyed. Therefore it's a bit surprising that even in a place like Florida (where sinkholes often occur) state law currently does not mandate that new construction sites be tested for sinkholes. It's generally not dictated by building codes and private contractors do not normally test for sinkholes, probably because of the additional expense. However, Florida state law does include a sinkhole disclosure law requiring sellers to disclose whether a sinkhole insurance claim was made against the property, whether it was paid, and if that money was actually used to repair the problem. Regardless of what state you may buy land or property in, be sure to check if that state has such a disclosure law. Keep in mind that even if no such mention is made on the real estate seller's disclosure form, you should probably still prod the seller, just to be sure. Such disclosure can often be overlooked, as sinkholes are not exactly an issue that's “top-of-mind” - especially if the insurance claim or incident occurred several owners previous. The bottom line is that the protection for a buyer will vary dramatically from state-to-state. If you have reason for concern, you should conduct further due diligence. Check out these maps and info sources on sinkholes: USGS - Sinkholes Florida Department of Environmental Protection  
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