Don’t Be Undermined
Unless you’re buying a condo, you might just assume you’re getting everything within your new home’s property lines: ground, water, air.
Usually, you’d be right.
The builder or homeowner who sells you a home transfers rights to the property to you. If the seller is holding onto certain rights, this must be disclosed, following directions set forth in state law. But what if your seller is unaware of rights the original developer retained? Or maybe you’re living in a state where no one has to tell you anything about it.
Yes, it happens.
The Fine and Not-So-Fine Print
When you’ve picked out a house to buy, your real estate agent will order a report from the title company. Others’ rights of access to anything over or under your property should be listed on the preliminary title report. The report should cover instruments recorded separately from the house deed — such as grants of easements.
It’s common for titles to be transferred with easements for corporate access, shared driveways, and so forth. Although most easements don’t diminish the worth and appeal of a home, the buyer must know where they are in order to keep them clear. In practical effect, some easements can make it impossible for the owner to put an addition on a home, build a fence or pool, or make landscaping changes.
A related document is the property survey, which points out companies’ access to the land.
For property bordered by water or subject to natural erosion, a boundary could have changed significantly since the last survey, or nearby landowners could inadvertently begin to encroach. This is a frequent example of why a buyer might insist on a new survey.
☛ A real estate buyer may want to commission an updated survey. Decide for yourself: The Property Survey: Do You Need One?
Title reports and county recorders supply information about legal access rights. But a buyer may naturally focus on the details of the house itself, along with the appraisals and inspections. Every document added to the heap makes the whole stack seem like fine print. But buyers should make time for due diligence. The necessary period of study can even be formalized as a buyer’s contingency in the purchase contract.
Now, let’s look at why due diligence involves more than the appraisals and inspections.
Mineral Rights: Mine, or Yours?
Developers have reserved mineral rights when selling real estate in numerous states, including Texas, North Dakota, and Florida. Some of the most coveted assets are gold, oil, natural gas, precious stones, and groundwater. Usually, the buyer knows what the developer has in mind, thanks to the seller’s disclosures. But surprises do happen.
Some buyers have been startled by text they’ve found in their closing documents. At the height of the fracking rush, real estate developers claimed or transferred the rights to assets beneath thousands of homes. In Florida, developers were not compelled to give advance disclosure to buyers. And what can a buyer do upon finding a grant deed of mineral rights in the bottom of a stack of paperwork at the closing table?
☛ Ideally, the buyer of a home with a clear title receives complete ownership. In reality, things can be complicated! Know What’s in Your “Bundle of Rights” When You Buy a Home.
Water Rights: Increasingly Valuable
If the land you’re buying sits over, around, or beside water, you may own riparian rights: the legal prerogative to use that water. In the eastern states, riparian rights are common, and run with the land from owner to owner, enabling homeowners to use the streams and lakes.
Many western states have a legal tradition of “prior appropriation” to assign first-in-time rights. Water rights states give property owners a right to draw water from beneath their properties. Owners convey these rights with the land, but also may be able to sell them apart from it. So, if you buy western property, underground or surface water may be yours — or the rights might already be assigned to someone else.
In most states, no matter how strong the property owner’s rights are, boaters and rafters may pass through private land. But they may be barred by state law from walking on the banks, or touching land more than necessary to safely float through the area. Check state law to be sure of your rights as a private property owner. Colorado law has kept rafters from floating through private property (although doing so is not prosecuted).
In Oregon, prior appropriation has been under intense scrutiny as water becomes increasingly scarce and household wells run dry. Proposals to create markets would allow landowners with senior water rights to lease them to others in urgent need. Meanwhile, residents must abide by rules shielding the federally protected Oregon spotted frogs. Their conservation plan mandates the setting aside of water for 30 years — and private owners are impacted.
Air Rights: The Case of the Droneslayer
Investors spend heavily on air rights for reception towers and skyscrapers, but the next contested space involves flight paths for drones in suburbia. Back in 2015, a Kentucky homeowner was enjoying a barbeque when a Phantom 3 drone flew over the scene. The homeowner, irritated by the uninvited guest, grabbed a gun and shot down the drone.
The owner of the $900 gadget filed a complaint. Soon the self-styled “droneslayer” was charged with criminal mischief and wanton endangerment for discharging the firearm in a residential area. The drone’s owner claimed it was flying at 200 feet overhead, but the droneslayer said it close enough to invade the privacy of local homeowners. Witnesses agreed and the case was dismissed. (A federal district court also dismissed the drone pilot’s lawsuit against the slayer in 2017.)
The emergence of droneslayers has pressed policy makers to set firm drone flight rules. The struggle continues.
Summing It Up, Down, and Under the Ground
Buyers should learn about the air, surface, and underground rights that come with their properties. A careful reading of the disclosures and title documents is important before the signing of a real estate contract.
In case of significant concerns, the buyer should seek an attorney’s opinion of the documentation, and receive advice on averting or recovering diminished property value.
Supporting References
Larry Morandi for the National Conference of State Legislatures: Western Water; In Brief – What If a River Runs Through It? (Jul./Aug. 2010).
Brendon Desimone for the Zillow Blog: Do You Own the Land Under Your Home? (Jan. 24, 2014).
Tony Guerra for Home Guides via SFGate.com: How Do Water Rights Relate to Real Estate Transactions? (undated).
Tampa Bay Times: Home Builder Grabs Drilling Rights Beneath Thousands of Tampa Bay Homes (Feb. 11, 2014).
Gillian Flaccus and Brittany Peterson for the Associated Press: Drought Haves, Have-Nots Test How to Share Water in the West (Sep. 16, 2021).
Brent Skorup and Connor Haaland for GovTech.com: Opinion – When It Comes to Drones, Who Owns Our Backyard Airspace? (Mar. 20, 2020).
Boggs v. Merideth, No. 3:16-CV-00006 (W.D. Ky. Mar. 21, 2017).
Natalia Martinez for Wav3.com: “Drone Slayer” Claims Victory in Court (updated Dec. 11, 2015).
Photo credits: Skitterphoto, via Pixabay, and Alexandr Podvalny, via Pexels.