You bought a piece of land, didn’t do adequate research, and used a knock-off real estate agent — one who doesn’t know land. He cared more about the smudge on his Mercedes, and the mud on their newly purchased penny loafers, than what they were selling you.
That’s a recipe for disaster. When you don’t do due diligence, people get hurt (emotionally and financially). Part of this research includes easements and zoning. Always completely understand these before signing the dotted line.
Zoning and easements are filled with nuanced elements. Overlooking important zoning laws can impede building and property use plans. Failing to study easements can cause the same issues, and more. Here are some of the basics you should know.
Editor’s Note: This is not financial, investment, legal, or real estate advice. Consult with a financial planner, investment specialist, real estate lawyer, and real estate professional before buying or selling real estate.
Major Differences: Easements vs. Zoning
There are major differences between easements and zoning. While zoning controls what you can build or do on the land, easements control who can cross or use parts of the land. Despite their differences, these concepts do overlap and impact property values.
Understanding Land Zoning in Real Estate
It’s vital to know what zoning laws mean and why they exist. The designated zoning laws are set and enforced by the local government (e.g.: city or county). They, and sometimes with public input, determine the different activities and uses permitted with these zones. There are common types of zones, including residential zoning, commercial and industrial zoning, agricultural and rural zoning, mixed-use zoning, and more.
“These are restrictions the county has on each individual parcel,” said Luke Wallace, Land Specialist with Whitetail Properties. “It’s about the utilization of that parcel and the county stipulations involved.
“Make sure that you can properly use the parcel you're looking to purchase,” Wallace continued. “For your intended purposes, know the zoning on that section of ground. Maybe it states you can or can't build a home, cabin, or other residential structure. Determining this should be part of everyone's due diligence.”
Residential Zoning (Single-Family, Multi-Family Homes): The residential zoning designation is for generalized residential homes. It might include single family or multi-family builds. Generally, these have limited rules and regulations.
Commercial and Industrial Zoning: The commercial and industrial zoning designation is limited to commercial and industrial use. It allows businesses and large corporations to construct vast campuses, factories, warehouses, and more. Typically, other uses within these areas, such as residential, are not permitted or financially viable.
Agricultural and Rural Zoning: The agricultural and rural zoning designation applies to just that — the use of land for agricultural and other rural purposes. Oftentimes, unless inside city limits with specific ordinances, this includes various recreational uses, such as hunting, shooting, trail riding, and much more.
Mixed-Use Zoning: The mixed-use zoning rule allows for a variety of uses. It’s often a catch-all designation that allows for residential, agricultural, and more. Oftentimes, it does not specifically allow for industrialization.
“The closer you get to cities, the more you want to look into it,” Wallace said. “Plus, the more you want to make the phone calls about parcels, details are pivotal. Within certain counties, zoning plays a lot bigger factor than most people tend to realize.”
General zoning aside, these also often regulate setbacks, height limits, and more. For example, it might stipulate how close a building can be to a road or property line. It could have rules on how tall buildings are allowed to be within certain zones.
To verify zoning, you must understand how to check a property's current zoning status. Consult the city or county to determine the status of a lot that’s of interest or for sale. Always confirm current and inquire about anticipated future zoning decisions associated with a parcel that you aspire to purchase.
Understanding Land Easements in Real Estate
The next step is understanding what an easement is and how it affects land ownership. There are several main types of easements, including utility easements, right-of-way easements, conservation easements, and others.
Utility Easements (Power, Water, Gas Lines, Etc.): Utility easements often refer to those associated with power, water, gas, fiber, and other lines. Utilities companies often have easements and right-of-ways that pass through private property. There is nothing that can be done about this, as it’s baked into most state, county, and local real estate laws. Depending on how you view it, this can either help or hurt a property’s situation.
“These are typically maintenance easements,” said Spenser Bradley, a Whitetail Properties Land Specialist in Alabama. “For example, if a powerline runs through the property, you know they'll have an access easement to maintain the powerline.”
According to Bradley, in many instances, you can still hunt on and plant food plots under and around these utility lines. In fact, he says Alabama Power actually encourages food plots. It’s less ground that they have to pay to maintain.
When assessing land, Wallace emphasizes the importance of whether or not you're planning to build deeper into a property, especially areas further from roadways and with only easement access. Determine if utilities are included and if you can run powerlines. Can you run water and all necessary utilities? If not, it might be an issue.
Right-of-Way Easements (Road Access, Pathways): Right-of-way easements refer to access, such as access routes that connect roadways to properties that do not have deeded road frontage. Oftentimes, these paths allow people to travel from a road and through another property to reach the tract with a deeded easement.
Bradley says that access is one of, if not the most important part of, a property’s value. It's not just necessarily road frontage. He’s seen where it has road frontage but there’s a cliff there, so access isn’t an option. Or, a deep ditch separates the road from the property. Ultimately, access quality is such an important part of property value.
With a legal easement, you don't own the land. Rather, you have the entitlement to cross a piece of land along that marked easement. Essentially, despite not owning the land, you can't be stopped from accessing along the easement to reach your property.
“The common term is ‘runs with the land,” Bradley said. “So, if you purchase a 40-acre piece that doesn't have road frontage, if it comes with a perpetual easement, that means it runs with the land. You'll always have that easement. If you sell the property down the road, the new owners will have that.”
Conservation Easements (Restrictions on Use): Conservation easements are directly funded by government programs. Examples include CRP, CREP, WRP, ACEP, and many more. These are contractual agreements that span a contracted number of years or in perpetuity, with the property in question. The goal is to maximize wildlife, landscape, and water conservation by preventing agricultural and other potential damaging practices.
According to Wallace, conservation easements are government programs that pay landowners to keep their ground out of production. Instead, they plant native grasses and implement other natural habitat management practices.
“Historically, most common is probably the CRP program, which is an acronym for the Conservation Reserve Program,” Wallace said. This and similar programs pay landowners to plant native grasses and keep those grasslands and wetlands out of production.” Today, there are many other conservation organizations in play, most of which replaced CRP.
Overall, with a basic understanding of easement types, you must know how to find existing easements on a property title. This is a tedious process, but one worth doing. Study the property deed, plat maps, professional title searches, county public records, utility provider details, and other available information.
A Deeper Dive on Access Easements
With a basic understanding of access easements, it pays off to dive even deeper and find as much info as possible.
“An access easement is the path to your parcel across someone else's ground,” Wallace said. “The majority of the ones I see are surveyed. There's a certain width that they must be. There are certain stipulations that come with each one.”
Easements can impact land values. Generally, an apples-to-apples property with road frontage is more valuable than one with a deeded easement. Conversely, an easement that cuts through the middle rather than the edge of a property, can potentially devalue the property that it runs through (or at least deter buyers). Thus, it is usually best for all parties involved to place easements along the edges of property lines.
“Don't cut an easement right through the middle of that parcel on the front side,” Wallace said. “Make sure the easement for that access point is off to the side.”
It’s important to ensure an accurate and very specifically worded deeded easement. They must check the boxes and verify all bases are covered. Wallace recommends all parties to check over easement documentation and verbiage carefully.
“Have an attorney draft documents that cover all the legal aspects of getting that easement insurance,” Wallace said. “That way, it stands the test of time, and you know, at no point, will someone cut off access to you or the future owner.
“I've seen some easements drawn up that favor either the person giving the easement or the person utilizing the easement,” Wallace continued. “You want an equal balance where both parties are satisfied.”
What Is a Landlocked Property?
A landlocked property is one that doesn’t have attached road frontage or an easement deeded with it. It’s virtually unreachable, which is a problem.
“Most properties have direct access to a public road or road frontage,” said Mark Williams, a Whitetail Properties Land Specialist in Kentucky and Illinois. “This is the preferred choice by most land buyers, because it usually provides easy access to utilities. Properties can also be accessed by easements for ingress and egress. This option gives you more security and makes the property more private. However, it does turn a decent percentage of buyers off due to the lack of public road access.
“If a property does not have road frontage on a public road or an easement for ingress or egress, then it is landlocked,” Williams said. In Kentucky, it is not legal to landlock a property but that doesn’t mean that you will not spend thousands of dollars getting access if there is not any. Verbal or handshake agreements are not easements and can be stopped anytime, so make sure the easement is recorded and is transferable to heirs, assigns, and successors if you are looking to buy a property without public road access.”
Bradley encourages people not to accept handshake agreements. He says that a handshake agreement is just that. It's as good as a handshake, which sadly, isn't worth much these days.
Bradley says he runs into easement issues all of the time. He’ll speak to a seller that's interested in listing the property. They discuss the access and he learns a neighbor has “always let them through.” Sure, that's worked for that seller, but it's a problem for potential buyers.
“I've seen it happen where a new person comes in and they don't let them through,” Bradley said. “Or the neighbor who is open to letting them sells his property or passes away. Then, the next owner doesn't allow anybody to cross through there. You're not totally out of luck, but you're looking at hiring an attorney to start the easement process. It's a big, complicated process.”
Steps to Protect Your Land Purchase
Real estate is a complex business. It requires thorough understanding of highly nuanced elements that inexperienced people and even poorly trained real estate agents can miss or misinterpret.
There are important steps to protect your land purchase, including the outlined steps below:
1. Hire a professional land surveyor.
2. Request a thorough title search.
3. Visit the local zoning or planning office.
4. Ask the seller for disclosure documents.
5. Consult the Whitetail Properties Land Specialist serving as your buyer’s agent.
Common Mistakes and Red Flags
There are many common mistakes and red flags to avoid, especially if automatically assuming you can build a home anywhere on the parcel of interest.
Furthermore, never ignore utility access rights across your yard. And fighting these is a futile attempt.
Of course, never forget to check future local development plans. This is a common mistake that often comes back to disrupt even those who complete all other due diligence.
Work With a Whitetail Properties Land Specialist
No matter the property of interest, always work with a Whitetail Properties Land Specialist and Ranch & Farm Auctions. Conduct research before buying land. Let a Land Specialist assist with that process. Oftentimes, situation depending, it costs nothing to you to call on a buyer’s agent. You have much to gain with minimal to no cost directly to the buyer’s agent representing you.