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The
Styron Law Firm
These are questions that frequently come
in by e-mail and telephone from people who are looking for legal advice
concerning real estate in Southwest
Missouri. The answers
here are not intended to be legal advice, but to provide general guidance. An
attorney must first gather facts (usually by examining documents and
conducting interviews) and then research regulations, statutes and judicial
opinions before formulating legal advice. Because so much information about
real estate is local in nature, it's a good idea to hire an attorney who is
active in the county where the real estate is located.
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Should
you purchase land in Southwest Missouri?
Generally speaking, real estate in Southwest Missouri has been a good financial investment, and Southwest Missouri is an increasingly popular place to live. If you
want to purchase a lot or acreage in Greene, Lawrence, Jasper, Newton,
Barry, Webster, Christian, Taney and Stone counties in Southwest Missouri,
outside of cities and towns, here's what you'll likely find:
- No zoning classifications (except in Greene County).
- Very low property taxes (which finance
schools, emergency services, libraries, and, to some extent, roads).
- Significant sales taxes, which support most
local governmental services.
- No planning map to indicate future roads, or
water or sewer extensions (except in Greene County).
- No building codes (except in Greene County),
though building permits are required.
- Boundary disputes, because fences rarely
follow survey lines closely.
- Pollution, in the form of trash dumps and
streams with high nutrient loads.
- Neighbors, a few of whom are from old local families,
and the rest from all over the United States.
Few people have not wanted a place in
the country at some time in their lives. However, many parts of Southwest Missouri have lost their rural, agricultural character
over the past thirty years. Much of Greene, Lawrence, Jasper, Newton, Christian, Taney and Stone counties have become
suburbanized. Conflicts over land use frequently arise, and local
governments are belatedly trying to impose planning and zoning regulations
and other land use restrictions. At the same time, developers have learned
that many people moving here from other areas-usually urban areas-prefer to
live in subdivisions, often gated.
Because much of the population growth is
outside city boundaries, county governments are responsible for public
services, such as roads, water systems, sewer collection and treatment,
ambulance service and fire protection. The legal and financial structure of
county government is more suited to the times when the counties were
sparsely populated areas, with the agriculture the main economic activity.
The county governments, and the welter of special purpose units of local
government-fire protection districts, public water supply districts,
ambulance districts, school districts, etc., are under-financed and
sometimes short of expertise. Elected officials still reflect the
anti-government sentiment that has long characterized the people of the
Ozarks.
The net result of population growth in Southwest Missouri is that the demands placed upon county governments
often exceed the tax revenue, administrative ability, staff skills, and
inclination and ability of elected officials to adequately plan for and
implement effective planning, zoning, regulation of nuisances, construction
of new roads, water lines and sewer collection and treatment systems.
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Can I purchase a lot
or two or three acres?
Purchasing small tracts is often riskier than you would expect. In much of Southwest Missouri, it was historically customary to divide land
into small tracts or lots without making any arrangements for maintenance
of streets, utility easements, water distribution and sewer collection and
treatment. In some towns and unincorporated areas of a few counties,
subdividers of land into lots of less than five acres are required to build
streets to county standards and to provide for adequate water and sewer
services. You would be prudent to verify the availability and cost of water
and sewer services, fire protection, trash collection, and road maintenance
before you sign a contract to purchase a house, a lot or an acreage in Southwest Missouri.
The existence of a lot is the result of
the preparation and recording of a subdivision plat or a survey plat. The
plat is recorded in the office of the county recorder of deeds. Subdivision
plats, in Greene, Stone, Taney and Christian counties usually include the
dedication of streets by which the lots are accessed, utility easements,
and setback lines (which provide that buildings be a minimum distance from
lot lines). A subdivision plat often contains a reference to another
recorded document, often called a "declaration of covenants,
conditions and restrictions," or restrictive covenants. This document
contains restrictions of the type of structures that can be built on lots
in the subdivisions (minimum size, permitted and prohibited construction
materials, no manufactured homes, etc.), and restrictions on permitted uses
(residential only, or no livestock, for example), and a mechanism for
assessment of lot owners for roads, water and sewer.
Most of the other counties in Southwest
Missouri have very skimpy regulations for creating subdivisions.
Survey plats are simply land surveys that identify areas of
land by number. Unlike a subdivision plat, which must be approved by the
county or city government and signed by the owners of the land shown, a
survey plat is signed only by the surveyor. The survey plat does not
restrict land use and the designation of easements and streets is not
sufficient to guarantee access.
If you want to purchase a lot, obtain
a copy of the subdivision plat or survey plat before you are obligated to
complete the purchase. You will also need to review the subdivision
restrictions in advance of signing a contract. Once you receive these
documents, ask a real estate lawyer who is familiar with the area to
evaluate the plat and restrictions in the context of your intentions for
the lot.
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What are the risks of
purchasing a home in Southwest Missouri?
Don't purchase a home until you've carefully considered the distance to
grocery stores, drugstores, doctors' offices, schools, neighbors and
employment. Being close to the lake, in the long run, is less important to
your quality of life than the accessibility of necessities.
Getting used to an area by renting first
has many advantages. You may discover places to live that you haven't known
about. You may find a job or hobby that is located at a place difficult to
reach from the spot where you originally wanted to live. If you're in the
area all the time, you're more likely to spot a good buy.
A thorough home inspection is necessary
before being obligated to complete the purchase. Because of the lack of
building codes, many things you may take for granted in metropolitan areas
are not present in the rural areas of the Ozarks, where there are no codes
in most areas. Even if a house is built to code, it may have other serious
problems, such as termites or water damage or poor workmanship, which may
be unrelated to code compliance.
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How
can I be protected in purchasing a condominium unit?
Be sure to ask for and obtain an original sale certificate (for a new unit)
or a resale certificate (for a unit purchased from someone other than the
developer of the project) before you sign the contract. Ask a lawyer in the
area to review the original sale or resale certificate and attachments with
you before you become obligated to complete the purchase.
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Should I purchase a
timeshare product?
Don't purchase a timeshare product unless you regularly take vacations and
you like to stay in timeshare resorts. You don't have to be an owner to
stay at a timeshare resort, so try it out before you buy. Don't buy a
timeshare product with the intention that your adult children and their
children will use it; they can get their own if that's what they want.
Some recent statistics show that only
25% of timeshare owners are happy with their purchases. This statistic
indicates that timeshares have real value for some of the people who buy
them, but not for the vast majority.
Timeshare interests are resold at prices
way below the developer's price. However, it's very difficult when
purchasing a resale to be sure of what you're buying, since the timeshare
week or points that you buy may be encumbered by unpaid maintenance fees or
undisclosed charges of many other kinds. It's best to close the purchase
with an established escrow company, which will certify that payments (such
as the seller's mortgage loan), transfer fees, and maintenance assessments
are paid at the time of closing.
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Should I purchase a
vacation club or travel club membership?
There are many companies offering memberships in vacation and travel clubs.
The selling point is that membership entitles the member to get the lowest
prices for lodging, food and travel and preferential reservations at
wonderful resorts.
Unfortunately, there is often no way to
find out whether the claims are true before buying. So why gamble?
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What are some of the
pitfalls in building a home?
Undertaking a homebuilding project is a major commitment. Unless you are an
experienced general contractor, or have lots of money and time on your
hands, don't be your own general contractor. In planning your home, don't
think too big. Talk to local real estate brokers about the price range,
features and locations that will make the house marketable in five years.
Many people build retirement houses that are too large, require too much
maintenance or have features that contribute little to value and detract
from marketability. When a retiree's health starts to fail, as it
inevitably will, an overbuilt house is often sold at a loss, because the
custom features aren't to most buyers' tastes.
Many of the best homebuilding
contractors don't advertise because they don't need to. Look for orderly local
construction sites of the type that interest you, and talk to the
contractors there. Local attorneys often know which homebuilders are
reputable. Remember that some builders build 100 houses a year and get sued
on three, while some builders build five houses a year and get sued on
three.
Your lender will prefer or require that
you pay your contractors through an escrow company. The reason for this is
to provide assurance that the loan proceeds will be sufficient to pay for
the construction, that the loan proceeds are actually used for paying for
materials and labor and to prevent the filing of liens by unpaid suppliers
of labor and materials.
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What should I look for
when purchasing a business?
Many people dream of owning their own business. They sell their home and
cash out their 401k and have high hopes of being self-employed.
Buying a business is incredibly risky.
The most frequent mistake is probably paying too much. For a couple to make
a living in a business, both must be committed to a few years of long hours
and low pay.
An attorney can be helpful by providing
checklists; advising about obtaining certifications concerning titles and
liens on vehicles, equipment and real estate being purchased; reviewing
leases; verification of the past payment of sales and unemployment taxes;
preparation of an asset purchase agreement or stock purchase agreement;
reviewing franchise and non-compete agreements; preparing employment
contracts and working with a lender, CPA and insurance agent on risk, tax
and financing issues.
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Should I buy title
insurance?
Title insurance protects purchasers of real estate against financial losses
which result from unreleased liens and forgeries. Title insurance protects
lenders against financial losses resulting from the loss of priority of
their mortgage liens.
You should not purchase real estate
without obtaining an owners' policy of title insurance.
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When
should I obtain a survey?
If you are purchasing a new house, unplatted acreage, land in an area in
which there are underground and overhead utility lines, or commercial real
estate, a survey is essential. A survey is always desirable, but since
surveys rarely reveal problems in well-established subdivisions with little
building activity, a survey is not always essential when buying a lot in
such a subdivision.
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Is it possible to
become rich by purchasing income property?
If you don't buy it wisely, you could become poor.
The value of income-producing real
estate depends largely on the condition of the buildings, the reliability
of the tenants, and the likelihood that the property will remain popular. A
building inspection and appraisal will provide insights into the extent of
deferred maintenance, the cost of maintenance and property taxes, as well
as the appraiser's prognosis and valuation of future income.
The role of a real estate attorney in
the purchase of income-producing real estate is in the preparation of the
purchase offer and financing plan, obtaining a certificate of zoning
compliance and occupancy, the review of plats and restrictive covenants,
review of the rent roll and leases, and a review of court records that
would give insight into the stability of tenants and their complaints about
the building and landlord.
A real estate attorney who is active in
a community will generally be able to offer a wealth of qualitative
information about tenants, governmental relations, banking relationships,
and trends of various kinds.
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How do I change the
name on a deed?
People call our office, saying, "I want to get my ex-wife's name off
the deed to my house." Or, instead of "ex-wife," they say
ex-husband, deceased parent, child, brother or sister.
To take a name off the title in which
property is held by a living person, a new deed must be made, with all
owners and their spouses signing. The deed should reflect that all the
owners have signed and are conveying all their interests to the new owners,
some of whom may also be former owners. The deed is then recorded in the
office of the county recorder of deeds. Changing the names of the owners does
not change responsibility for debts secured by the property identified in
the deed. Only the lender can release a person who has signed a note. In
fact, changing the ownership of property can trigger a
"due-on-sale" clause in the promissory note and deed of trust
that encumbers the property, making the loan balance immediately due.
Preparation of a deed is not merely
filling out a form and signing in front of a notary public. A real estate
attorney will ask several questions and may review the title history before
determining whether a warranty deed, quitclaim deed, special warranty deed
or trustee's deed is the appropriate form. Depending on the circumstances,
the attorney may wish to add other language that explains the purpose of
the deed.
If the deed is being prepared to divide
property, preparation of a legal description by a surveyor and approval of
the division of the property by the city or county planning and zoning
board may also be required. The purpose of the planning and zoning approval
is to make sure that minimum lot size regulations are met, as well as
assuring that streets and utilities will serve each newly-created lot. The
911 offices will also need to be notified to create new addresses so that
police, fire and ambulance personnel can find the new lot.
If a person (rather than a trust,
limited liability company or corporation) died as the sole owner of a
parcel of real estate, then putting the real estate in the name of another
can be difficult. An attorney will need to do some investigation before
giving advice. Usually a probate proceeding is required. Most probate
proceedings are uncontested and can be completed in three to nine months.
If the value of the estate is less than $40,000, the probate proceeding can
almost always be completed within three months.
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Putting Somebody
Else's Name on a Deed or Bank Account
Many people, anticipating death or disability, or for other reasons, want
to put their son's or daughter's or caregiver's name on their bank account
or certificate of deposit, car title or deed to land. The motivations
include avoiding probate and convenience. However, there are sometimes
unintended consequences, such as when the younger or healthier person
unexpectedly dies first.
If you want real estate or a bank
account to pass automatically upon death, you might want to use what
Missouri statutes provide for as a "transfer on death" deed or
designation, sometimes called a beneficiary deed, that allows the grantor
to have full use of the property, including the right to sell it and borrow
against it, but allows transfer at death without probate. The transfer-on-death
deed does not permit the beneficiary to borrow against it before the
grantor's death. If you have a will or trust that distributes property in
equal shares to your children, you will need to consider whether
transfer-on-death deeds and life insurance and bank account designations,
and any other joint interests that you create, will distort the equality
that you have set up in your will or trust plan or fulfill your intentions.
An attorney can provide legal advice,
after a review of your assets and intentions, to help you distribute your
property in the manner that you desire.
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How do I resolve a
boundary line dispute?
Boundary line disputes are often difficult to resolve because the parties
claiming the same strip of land are have strong feelings, each feeling that
the other party is guilty of bad faith. Often far more money is spent
resolving the dispute than the disputed land is worth.
Real estate attorneys can offer two
methods of resolving boundary line disputes.
- Mediation, in which an impartial mediator
attempts to guide the parties to a compromise.
- Litigation, in which a judge makes a
decision on the evidence (which is presented by surveyors and the
parties and other witnesses)
Mediation is infrequently used, because
at least one of the parties has no intention of compromising.
Litigation is very uncertain, because
both sides usually have a combination of good and bad arguments, and the
judge will reach a decision based upon his review of several factors and
the judge's view of the credibility of the witnesses.
Attorneys evaluate boundary line
disputes by looking at several factors, such as the following:
- Deed records
- Surveys
- Photographs that show land use
- Personal interviews
- Property tax payment records
At a minimum, an attorney will need
copies of the deeds of the parties on each side of the disputed boundary
and a recent survey.
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This web site is designed for
general information only. The information presented at this site should not
be construed to be formal legal advice nor the formation of a lawyer/client
relationship. Persons accessing this site are encouraged to seek
independent counsel for advice regarding their individual legal issues.
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