Titles, Surveyors, Property Lines

[Account Closed]

We have an interesting twist on a new property we are negotiating. The owner has a home sitting on roughly 2 acres which for the most part only 1 acre makes up what would be considered the yard. The remaining land has trees, a barn and some livestock. As a result, the owner would like to sell the home with the land around the home (1 acre) but have a surveyor create a new property line so that the two are now individual plots. 

Now, to further complicate things he does not want to do this in advance of selling the property. In short, he wants to ensure that it is sold before he has the property lines redrawn. 

Lastly, we have not determined if we will keep this property or wholesale it to one of the investors we work with.

Now, my real question(s) are:

1) How does this impact the title to the home? Needless to say it will change from 2 acres to 1 acre, but I have no idea how long that process takes.

2) Will this create additional challenges with the closing?

3) What other factors should we be considering in this process?

While this is a new twist I don't think that it is such that we should be running away from the deal, this is just something we have never come up before. 

Thanks in advance,

Glenn 

[Bill Gulley]

This isn't rocket science, I've done several in 2 and 3 lots, one was 7 with existing structures, a bit more complicated.

May I mention, these situations do come up and that studying the basics of RE can make you money in solving these matters.

What you're needing is a "Minor-Subdivision" generally these are much easier to approve by a zoning commission as you probably aren't changing the classification or use.

You will need to begin with the existing legal description, it will probably be described in "meets and bounds" rather than by the lot and block, guessing it's rural with a barn and critters.

Guess it would be rather long to describe the entire process, but to start with, you (at least I)  didn't need a survey. Hope the property isn't an irregular shape, that gets more complicated. You need to know what the minimum lot size is for that area, the P&Z office can tell you. With that, you can then lay out a proposed minor subdivision.

Read the description, a rectangular or square shape can be divided by reading the legal and simply subtract the area needing to be cut off for the new legal. You then need to figure the sq ft of each proposed lot to ensure you are at or above the minimum required.

If it's an irregular shape, sharpen your geometry skills.

Once you have the lot measured (all this is at your desk, no need to measure out there, yet unless you think you're close to a structure and if you are, ensure you have the required set back that may be necessary).

I did the rest, but here may be different than there, so now go to an engineer, a surveyor or an attorney who might be willing, and give the old description and the new measurements off the existing legal to them to write a ne legal description for both lots, see what your P&Z office may require as to writing legal descriptions. If you can do it, ensure the new legal descriptions "close" and that the sum of the parts is equal to the whole, have your title company check it and ensure it's insurable.  

A minor subdivision of an existing lot may not need a survey, but could, here it's not. You the owner or the powers required will need to attest to that no encroachment will exist, your P&Z office will likely have an application package for a minor subdivision. It could get complicated if you need proof of water runoff, sewer or septic requirements, any roadway agreements or easements. Existing easements are simply copied to each lot as applicable.

With the proposed lot descriptions, existing description and package, file for the change and if you're good to go, you will go to a board or committee meeting for a hearing style approval.

These are usually slam dunks, they may require you to agree to other requirements (usually, you may be grandfathered to improvements or changes and they may ask you waive such things as a new lot would then be required to meet, like conveying easements should they become necessary in the future). Why are they so accepting? Because the tax assessment for two lots will be higher than one large lot, both will be marketable at a much higher value than one lot with excess land.

Generally too, the owner must make the application or an interested party or representative of either (attorney) but you should be able to do this yourself.

After the minor subdivision has been drawn, you can contract for that parcel as will be described, subject to approval. I have done drawings on typing paper showing the boundaries and improvements, your office might be more picky as to scale, I kind of doubt it for a minor sub of an existing lot/acreage.  

If you do need a survey, you will probably need to pay for it and deduct it from your purchase price or have the seller credit you with whatever is agreed.

After the minor subdivision is approved and filed, you can go to your closing. Tax assessments will usually follow the following year as the Assessor will pick up minor subs through the process and will need to reassess values, at closing you will likely have old assessments used, so your contract needs to mention new assessments being assigned to the existing owners, basically agree that taxes assessed in that year will be accepted, your title company can help you here.

Reason the seller wants it divided first is probably because he knows about what a survey would cost, he may not be aware that you don't really need a survey to draft a new legal description.  

Investors should be familiar with minor subdivision requirements, it's a great way to buy and peel off money from what many owners don't think of! 

PS, that 7 parcel minor sub had a river along a common boundary to all the lots, what fun! LOL  :)

Edited;

Time frame, if you get busy, maybe within 45 or 60 days, depends when the P&Z board meets.

Ensure there are no liens, they may need to be cleared prior to filing as a lien holder has the 2 acres encumbered, you might consider buying sub-2, but I wouldn't other than RE taxes as mentioned.

Make sure the area is acceptable for any septic requirements.

Check easements and you may need to draft an easement for ingress/egress as your minor sub can not land-lock either parcel.

Double check for encroachments and set back requirements.

Water retention issues?

Review the package of requirements if they give you one before you begin and make sure all the requirements can be met before you spend time and money.

Good luck. :)