Just before the holidays, I attended a seminar given by David Levin, prominent local attorney specializing in waterfront property transactions. Entitled “Red Flags on the Waterfront,” it outlined some of the things Realtors should watch out for as they assist their clients in buying and selling.
Many possible pitfalls await the unwary buyer.
Now, regarding making changes to a property after you’ve bought it, you would certainly expect to have to comply with all regulations and get permits and such, and you would look into all that prior to buying, if it was critical to your plans. You might also assume that if you intended to use the property as-is, in the same way that the previous owners did, that you would have no problem doing so. But that would be a dangerous assumption.
David related a story of a man who bought a property with a dock, specifically because it would accomodate his boat. The buyer asked for, and the seller furnished, a copy of the County permit for the dock. But the buyer did not investigate whether the dock was built according to the county-approved building plans. In fact, it was built 10 feet longer, but no one noticed at the time of constrcution, and it subsequently had been used without incident by the previous owner.
The problem arose when the County became aware of the violation, which could been prompted by any number of happenstance events. But in this case the new owner contracted to have a boat lift installed. The contractor routinely applied for a permit, and that’s when it got ugly.
The County refused to grant the permit and refused to retroactively permit the dock. Instead, the owner was required to remove the extra ten feet, which rendered it unusable for his boat! And that dock was one of the prime reasons he selected this property to buy over all the others on the market.
The moral of the story is to do a thorough due diligence by involving a real estate attorney experienced in waterfront issues. Doing so is not costly at all; in fact, if the transaction closes at Mr. Levin’s office, routine due diligence is included in the usual closing costs. It is vital that the buyer’s Realtor build in to the sales contract an adequate amount of time for due diligence. This is easily done at the outset, but if overlooked, can be difficult to remedy afterwards.
The goal is to uncover potential issues BEFORE the closing so they can be dealt with appropriately. Due diligence good; surprises bad!