As ranch and land brokers, we often see legal access issues and many times the severity of the issue is not even known to the sellers. Owners of family ranches that have been in the family for many generations often are not aware that they have no record of legal right to use the access they have been utilizing for many generations or just assume they do.
This creates significant issues when owners decide to sell their family ranch or farm. Without legal access, the ranch is virtually unmarketable as few buyers are willing to buy land for which the only way to access the land is by helicopter. Also, owners often have the misconception that since they have been using the same access for years with no conflict with owners of the lands they cross there will be no problem getting an easement that provides legal access. Often that is when the difficulties begin as most landowners are not favorable to just giving easements since it encumbers their property and has potential negative valuation impacts as well as impacting their peaceful enjoyment of their property.
If you’re considering selling your ranch, farm, or recreational property we encourage you to verify your legal access before placing the property up for sale. This is where working with a knowledgeable broker is important as they can assist with this process as well as other prep work that is necessary before putting a property on the market.
If the property fronts on a public road or highway documenting legal access is pretty straightforward. Surveys are great resources for documenting this type of access. In instances where the access crosses private lands belonging to others or federal lands such as forest service or Bureau of Land Management, documenting legal access becomes more involved. Typically legal access across private lands is provided by an easement and there are different types of easements which we will cover later. When access crosses federal land, it is often provided by a right-of-way which is revocable and therefore typically not considered permanent legal access.
If you are not sure what your legal access is, a good place to start is by contacting a local title company and ordering a preliminary title search report. This will typically list any easements that are appurtenant to the property and have been recorded. If an easement has been executed but not recorded, the preliminary title search will not reveal the easement you will have to locate a copy of the fully executed easement. It is recommended easements be recorded with the county for this reason as it puts the public on notice of the existence of the easement.
While the primary concern of legal access is marketability, a second concern is insurability as title companies will not issue a title policy in most cases insuring a property that has no legal access and if they do the title company will exclude coverage for legal access. We often see instances where a property was purchased from a local resident without going through a title company and the purchaser just assumed the property had legal access because the buyer had known the family and property history for years only come to find out there is no legal access when they decide to sell.
Another instance where legal access becomes a real hang-up is when the buyer is financing the purchase. Banks will not finance a ranch, land, or recreational sporting property that does not have documented legal access.
For these reasons, it is very important to be able to document legal access when an owner begins to prepare to sell their property. The best case scenario is the property fronts a public road or highway or has an easement that has previously been given or purchased and is documented; preferably recorded at the county clerk’s office.
There are two general types of easements.
When selling land typically an appurtenant easement would be required for legal access as an in gross easement would remain attached to the current owner and not pass to the buyer. Therefore the new owner would not have any legal access. The previous owner would still have access to the land they no longer own due to the in gross easement.
There are five major elements of an easement.
There are three ways an easement may be established.
The last two are more difficult to establish and in most cases require going to court which can be costly. For this reason, it is generally best to work to get an express easement granted through negotiating with the servient tenant to obtain a mutually beneficial outcome.
Easements can be very complicated and we recommend seeking legal counsel for legal advice. Attorneys can provide counsel and advice in situations where legal access is in question and may be able to assist in securing proper legal access.
If considering selling your property work with a knowledgeable broker who will assist you in preparing to place your ranch, farm, or land on the market for sale. This will help avoid many costly mistakes.
Disclaimer: This article is not intended as legal advice. Author is not an attorney. Seek legal counsel with any questions regarding the law.