What to do with a lake bed?

[Rick Rickert]

Hello all,

I am a casual RE investor who has been to BP.com several times to read archives, but now have a unique situation with my primary residence that I'm hoping someone can advise me on.

My wife and I recently bought a house in an older (1930's) subdivision. The land was at that time, privately owned. The owner at that time built a dam, and his get-rich plan was to sell electricity. When that didn't pan out, he sold lots and cabins, which has created the private community of about 200 houses we have today. The roads are not state owned, but are rather owned by the community association.

When we were going through the purchase process, there was a document which said that "this house includes rights to the 14.85ac lake as well". My RE agent and myself both interpreted that as "the owner will get a 1/200th share of the lake, commonly owned by all houses in the development".

A couple nights ago we went to the meeting of the community association and introduced ourselves as new residents of the community, and when we told people which house we bought, they said, "oh, so you're the new owners of the lake". Apparently my seller bought the lake bed rights several years ago to stop a neighbor from building an obnoxiously large dock with pylons. All houses in the area have small floating docks.

So we own the rights to the lake BED. In Virginia it is not possible to own an actual lake. The water is owned by the state. This is actually a good thing, as otherwise I'd be liable for any accidents which happened in the water. As it stands, I'm just liable if someone hits their head on the bottom of the lake for any reason. Even though that's very remote, I have plans to transfer the lake bed to an LLC which I have but no longer use.

In an odd twist, the dam is undergoing a 2-year repair, making about 50% of the lake bed exposed until next summer.

So my questions are:

1) What could I possibly do with this 'land'?

2) How would I be able to determine a value for this? I was told the previous owner bought it for $2000 about 10 years ago. Since I can't see a use for it, I'm having trouble seeing a value for it. And I doubt a residential appraiser would be qualified to appraise a lake bed.

Suggestions or random thoughts are welcomed.

-Rick