Selling Water-Covered Property
Truly, I absolutely refuse to represent anyone who is selling water property. Here’s why.
When you bought the property, there was a very large probability that you bought a 3-sided parcel where the boundaries do not close. One side, and in extreme cases two sides, are missing. You owned it all that time but never knew it. Now, you want to sell this parcel that is lacking in boundaries to someone else who thinks that they are getting a parcel of property with all sides present. You may have had the property surveyed when you bought years ago. You may have checked matters with your attorney and you received title insurance but are soon to find that it doesn’t cover riparian property. The closing went smooth. You got the price you wanted. You immediately congratulate yourself; “What a great investment!”
Years later you receive a letter from an attorney for the buyer. The parcel you sold was found to be missing the side at or near the water. You are devastated. How can it be that this parcel which has been sold and resold several times over many years that no one has ever discovered it? It may have even been referred to at the state and local levels as an All-Sports Lake. Wow, just how can that be! However, title insurance refuses to cover any damages or attorney expenses. That risk is on you.
Litigation results in either large monetary damages or you may have chosen to have the 3-sided parcel deeded back to you, or whatever. You wonder how can all of this happen when you covered everything the professionals told you to cover. Now, you are obligated to try to correct title and, you become aware of the extreme amount of money and time it will take to do so, if it is at all possible.
After the shock, worry and extreme indebtedness, you are left with little to none of what at one time you thought was a great investment. The chances of this happening to you as a seller of water property anywhere in Michigan are great. However, there is little if anything that can be done to help remedy these and other catastrophies.
I represent buyers all over the state and inform them prior to signing any documents what is or isn’t riparian. Most of the time, the remedy is simply taking extra caution to consult with me prior to ever buying water property. THE REMEDY IS JUST THAT SIMPLE!