Fee Simple and CCRs

Started by rniles, February 23, 2011, 02:51:57 PM

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rniles

I know a Fee Simple won't have an HOA but can they have CCRs?

Also, if the Mineral Rights were signed away, should I even consider a property?
I do not entertain hypotheticals. The world itself is vexing enough. - Col. Stonehill in 'True Grit'

Squirl

Quote from: rniles on February 23, 2011, 02:51:57 PM

Also, if the Mineral Rights were signed away, should I even consider a property?


No.


duncanshannon

Why wont a fee simple have a HOA?

Whats a CCR?
:)
Home: Minneapolis, MN area.  Land: (no cabin yet) Spooner, WI area.  Plan: 20x34 1 1/2 Story. Experience Level: n00b. 
Build Thread: http://countryplans.com/smf/index.php?topic=10784.0

MountainDon

Just because something has been done and has not failed, doesn't mean it is good design.

rniles

With a single-family home you are the sole owner of the building and the land it sets on.

This is called "fee simple" ownership.

HOA (Home Owner Associations) can make rules; a CCR or better yet, CC&Rs (Covenants, Conditions & Restrictions) that can make you do things you don't want to do if you purchase.

Fee Simple ownerships don't have HOAs from everything I've read so far.

But I have just found out that they can have CC&Rs. ...which may have conditions and restrictions that limit what you can do with your property.

So to be careful ..I want "fee simple" ownership WITHOUT any CC&Rs.

I was just reading some details on a property and the auditor did have some CC&Rs listed but the seller was downplaying it. The seller also didn't mention that a previous owner sold the "mineral rights" to the land ....and Squirl jumped in an answered my question with a firm "no!". It seems ...but I don't understand it completely ..that when someone has "mineral rights" to your property they can come on to your property and get those minerals whenever they want. Scary.

http://www.ehow.com/about_6386160_land-mineral-rights-washington-state.html

I'm just learning about a few of these things. I've never bought land before. You all seemed to have done so, which is why I am hoping to pick your brains  :)
I do not entertain hypotheticals. The world itself is vexing enough. - Col. Stonehill in 'True Grit'


duncanshannon

Deff. lots to learn during this process! 

I'm hoping to buy 9 acres, its a 'fee simple' deed/title (?) however the 'development' its in does have some restrictive covenants. There is no HOA formed, however it would seem to be necessary to effectively enforce the convenants.  The one thing that make me squirm a bit was a LLC that was setup to govern the private road and utilities access.  Lawyer friend thought it was all reasonable, albeit a little atypical to have an LLC setup for that.

i get the drift that there are lots of people on the forum that would never buy land that had any covenants... I'm mostly OK with those on the lot we are looking at.
Home: Minneapolis, MN area.  Land: (no cabin yet) Spooner, WI area.  Plan: 20x34 1 1/2 Story. Experience Level: n00b. 
Build Thread: http://countryplans.com/smf/index.php?topic=10784.0

Squirl

Yeah, I guess I should expand on my answer a little. I have directed this narrative to "you" because you asked the question, but this can be substituted for the collective you for anyone else reading this. I do feel strongly about this subject.  I see this very frequently lately.  Energy prices are high and they have been for a few years and they will be for the foreseeable future.  There have been many documentaries lately on this.  Oil and Gas drilling are hot topics right now in mountainous areas.  A good show on this recently is "boom town".  It shows the good and the bad of the recent boom.  The people that are always most hurt are the poor or the ignorant.  They don't own there mineral rights and didn't do the research as to the possible repercussions of this.  If find myself cursing at the television, radio, and people I meet.  "Get your mineral rights, Get a lawyer before you buy, Get a title report" Yes, in many states they can kick you off your land without any compensation.   Only sometimes you may sue for damages, and even then they can be limited.  You will never get back what you put in. The problems I see most alarming are not even the complete loss of your house, but the environmental damages that can affect your health.  If there are valuable minerals, the process of getting at them can be very environmentally damaging.  If you choose to stay this can kill you.  If your state has tort reform and contributory negligence, it is more profitable for them to let you die and simply pay your beneficiaries.  Think Ford Pinto.  The dollars and cents of it can be easily calculated.  On the show boom town the people were getting $10 million off their wells.  Don't think the oil company wasn't making the same if not more per well.  That is a lot of money to pay lawyers to fight you if you have any claims of damages.  Then, if you choose to stay and are killed by the pollution, they can claim that you were the contributing cause of your own death because you chose to stay and not limit your damage from the exposure.  Even if you could prevail then, the average human life is worth $6-8 million.  If there is tort reform in your state the punitive damages are limited to $250,000.  So the oil company makes $40 million in four years and they might have to pay out $8.2 million max.  40% + costs  of this would go to the lawyer and your heirs might see $2 million and that is in the worst case for them.  Most of the time it would never get to that point.  You would move, lose everything and they get all the money.  It may seem like an extreme example, but I see hundreds of cases like these in daily legal blotters.  I can cite well over hundreds of major famous examples.  Every major corporation and lawyer does these calculations.   They even have simple programs set up in Lexis and west law for damages in these cases.  Our legal system can be a beautiful concept and the best in the world, but it is still not set up to benefit you, it is set up to benefit the wealthy.


Disclaimer: Nothing here is legal advice, this is for discussion purposes only.

h0rizon

Quotebut the environmental damages that can affect your health

That brings up another good point, squirl.  Not only do you have to be careful about your own mineral rights, but you need to be cautious of your neighbors.  If one of them does not own rights, you could one day find yourself next to an oil field spewing noxious gas into your living room.  It's probably a good idea to check the surrounding area too and ask around first.

Although, I suspect the majority of people will scratch their heads when asked what rights they hold.  Anyone know if these rights are documented for public record?
"Never give in. Never give in. Never, never, never, never – in nothing, great or small, large or petty – never give in, except to convictions of honor and good sense. Never yield to force. Never yield to the apparently overwhelming might of the enemy

Squirl

Quote from: h0rizon on February 24, 2011, 01:14:57 PM
Quotebut the environmental damages that can affect your health

Although, I suspect the majority of people will scratch their heads when asked what rights they hold.  Anyone know if these rights are documented for public record?

Usually they are recorded with the deed with the county.  A simple title search will sometimes turn up some of your neighbor's plots, because property lines change and subdivide over time.  You could even ask the company doing the search.  Remember covenants run with the land, just because they aren't written in the current title, doesn't mean they aren't there.  I actually found some covenants that I had liked when I did the title search. (right of way improvement, more accurate description of restrictions, and a survey) My lawyer made sure they were properly recorded with the new title and with the title insurance company.  IIRC the search on my property was $125 with another $125 title insurance.  That brings me to another point, consider title insurance. There are many layers of protection you can buy in the process.  If you explain what you want to the lawyer and he tells you it is O.K. (in writing) you have his malpractice insurance if he is wrong.  You also have the title report and title insurance if someone comes in later and asserts rights that were not filed with the county.  Examples include quasi contractual unjust enrichment claims, liens,  property line disputes, mineral rights,  rights of way, and many more.  These two options are usually a very small percentage of the total land price.


publius

Quote from: rniles on February 23, 2011, 10:57:03 PM
Fee Simple ownerships don't have HOAs from everything I've read so far.

It is perfectly possible to have fee simple ownership with an HOA.  I'm sure most HOAs are in neighborhoods with fee simple homes.  The CC&Rs in the title to each home in the neighborhood specify each property owner's reciprocal right to participate in the HOA, the powers of the HOA, and each owner's obligation to comply with the the CC&Rs and the rules established by the HOA within the scope of the authority given to it under the CC&Rs.

Whether you should buy land with CC&Rs depends a lot on what the CC&Rs say and what you want to do with the land.  The most important thing is having a clear understanding of what CC&Rs exist (like Squirl says, they could be buried in the chain of title, not all listed in the most recent deed) and keeping a long-term perspective on what you might want to do with the land in the future.  If there is an HOA, pay careful attention to what the CC&Rs say it can do, because if it has broad authority to make rules there may be restrictions in the future that you haven't thought of yet that you will find intolerable.  But aside from HOAs, some CC&Rs might be a problem and some might not.  Minimum road setbacks are common, and probably wouldn't bother most folks who want to build a cabin that's hidden from public view anyways.  In the area I've been looking at, it seems like CC&Rs prohibiting outhouses or privies are common, which would obviously be a problem if what you want is a rustic cabin with no indoor plumbing and an outhouse or privy.  One that I saw specified that no firearms could be discharged within 500 feet of a residence.  If you like hunting or target shooting and want to be able to do it on your land, that would be a big problem.  If you don't like guns anyways and want peace and quiet, maybe that would actually be a plus for you. 

Again, it all depends on knowing what the actual restrictions are and knowing what you want to do with the land (now and in the future).

rniles

Quote from: publius on February 25, 2011, 06:01:32 AM
It is perfectly possible to have fee simple ownership with an HOA. 

I stand corrected  ...have found more information that backs up what you said.

I do not entertain hypotheticals. The world itself is vexing enough. - Col. Stonehill in 'True Grit'

cbc58

careful...    do your homework WELL.

considerations

FYI: LLC = Limited Liability Company.   Please note the first 2 words.   Its kind of a "hybrid association".  The best of both worlds of corporations and partnerships/sole proprietorships combined.  My experience is that this is a business entity that is very difficult to "pin" liability on in court if you have a beef with them.

John Raabe

Your land can also be governed by Zoning requirements. These regulations can determine the size of the lot and house size, what types of businesses can be done on the property and how close your can build to the property lines. This is usually subject to county rules unless your property is within city limits. Health department regulations deal with water and septic. CC&Rs may be in addition to county rules, these are usually established by the developer. These rules can include types of materials used for walls and roofs, whether or not an RV can be parked in front, etc. Most of these rules are attempts to "protect property values".

If you have one of my plans there is likely a paper titled "Taking your plans to the Building Dept." in the booklet that came with your plans. That has a strategy for getting such information together and working through issues.
None of us are as smart as all of us.


Texas Tornado

I live in a subdivision under a HOA..........NEVER AGAIN!!!!!!! Never mind we are rural and have farms all around us the HOA and their lawyer make all our lives a living hell with their city type stupid rules! When we bought out here we were the first ones here before the CC&R was approved by the county. And yes I have been to court trying to shut it down...Our petition was null and void by the courts....Seems the developer (LLC) called people up and told them she would call their notes.....No proof in writing but have been told it by the ones she called..... I am sooo looking forward to leaving this area.......
TT

hpinson

#15
I'm not sure where you are located, but there are not a lot of places left in the American West where the mineral / water / timber rights are not already owned or allocated to Federal, State, or private concerns (even in Santa Fe proper).  The small land-holder usually ranks low in terms of rights and the laws favor extraction big time.  Such industry adds a lot to the state coffer and employes lots of people.

You could do some research at your State Engineer office and find out just what minerals might be beneath the land you are considering.  Oil, gas, other mineral deposits tend to be very well mapped in the US.   A lot of this information is online as maps available from state agencies and feds like USGS and BLM.  Google search your area for minerals, oil, and gas, and likely various reports will emerge if there is past, present, or projected activity.

You may well find yourself in an area that is not of interest for mineral development, despite rights being long ago allocated.  Then maybe you would be ok considering the land.

Or you may also find that your land is of interest for extractive development and you would be wise to stay away.

I don't mean to underplay concerns. Living near a radioactive tailings pile, or near a gas well where hydraulic fracturing fluid has leaked into the groundwater would be devastating.

HOAs and CCRs suck. Stay away from them.  You'll just end up in a legal fight or paying someone elses share for maintaining the roads. And things like what color you can paint your shed.