Do you own the land under your home?

Here's how homebuyers can avoid taking this important detail for granted.

By MSN Real Estate partner Jan 28, 2014 12:56PM

Zoomar RF/Getty ImagesBy Brendan DiSimone, Zillow

 

When you buy a home, you probably assume that you own everything in and around it within the property lines. But in some parts of the country, homeowners are discovering the property they’re buying does not fully include the land beneath it.

 

For example, in Tampa, Fla., a family realized at closing that its homebuilder had already signed away the rights to the land underneath its home to the builder's own energy company. The "mineral rights" grant gave the energy company the freedom to drill, mine or explore for precious minerals beneath the home.

 

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How is this even possible, and how can it be avoided? Who really owns the land beneath your home? Here's what you need to know.

 

You probably own the land

Generally, it's likely that you own the property underneath and around your house. Most property ownership law is based on the Latin doctrine, "For whoever owns the soil, it is theirs up to heaven and down to hell."

 

There can be exceptions, though. On occasion, a buyer will uncover an easement for a driveway or walkway that goes through the property. This is why it's important to carefully review contracts and disclosures.

 

Contract and disclosures

A seller, be it a homebuilder or a homeowner, can't claim any sort of rights to the property without first disclosing those rights in the real estate contract or in some sort of disclosure statement.

Each state is different with regard to how things are disclosed. Many disclosure statements require the seller to tell the buyer whether or not someone else has laid claim to the property or if the buyer is limited to claims in the future. If the seller is unaware, or the home you're purchasing is in a state that doesn't require the seller to disclose, then you should carefully review the property's title report before signing off.

 

Preliminary title report

There can be a situation in which a seller doesn't know that someone else has laid claim to the property. For example, this could happen in the case of a resale in a newer subdivision where the current owner bought from a homebuilder directly.

Throughout the years, there have been instances when an easement, encroachment or even a small mechanic's lien sits on a title unbeknownst to the current seller. When this happens, all parties must work together to determine the best course of action. Access to the land below your home would have to be granted via a deed and, as such, it would show up on the preliminary title report.

 

The title report provides ownership information and acknowledges loans, deeds or trusts, easements, encroachments, unpaid property taxes or anything else that has been recorded against the property. If a homebuilder deeded mineral rights to itself, for instance, it would have had to record that deed. If so, it stays on the title report until the builder and the current owner agree to take it off.

 

How to avoid last-minute disclosures

In Tampa, unsuspecting homeowners signed over to the builder's holding company the "eternal rights to practically anything of value (found) buried underground, including gold, groundwater and gemstones," according to the Tampa Bay Times. If that weren't enough, homeowners who didn't realize they had signed over the mineral rights, or who did so at the last minute under duress, could have trouble selling their home later to wary buyers.

With any home purchase, you should give yourself enough time so that you can do your due diligence, either as a contingency to the contract or in the period leading up to the contract before you sign it.

 

When buyers think about due diligence, they immediately think "property inspection." And in the case of new construction, it's uncommon to do an inspection. But there is so much more to due diligence than a simple property inspection.

 

Never wait until the closing to discover such a big disclosure, as the unfortunate buyers in Tampa experienced. It's common practice for a good listing agent or seller, in states where disclosure is required, to raise something like mineral rights as a red flag to all buyers from the get-go.

Deeding access to the land below your home isn't simply some "fine print" buried in the closing papers that could be easily overlooked. Such a disclosure would require paragraphs, if not pages, of documentation.

 

Best course of action: Review all documentation, disclosures and title paperwork prior to signing a real estate contract or during a due-diligence period. If you're uncertain, ask your agent for help reviewing the documents or hire a real estate attorney to pore through the paperwork on your behalf. 

 

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Tags: buying
 
12Comments
Jun 17, 2014 5:32AM
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Billfitz781, it is also to allow people like you  to stick their nose where it does not belong, what I do with my property is none of your business.
Jun 15, 2014 5:58PM
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After we paid cash for our home & the acre it sits on....we are told by the county that it is illegal for us to be living here. Really! Then we had to pay $ 6,000 for a new plat & survey. So much for disclosure laws. In Texas it is not illegal to sell an illegal piece of property.
Jun 15, 2014 4:57PM
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In Baltimore you may own your house but somebody is getting rich on the land the house sits on because you have to pay land rent.
Jun 15, 2014 4:36PM
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Obamaville claims title to the real estate under your home, and it has collateralized that value toward its Chinese debt - at your expense.  mmm, mmm, mmm!
Jun 15, 2014 4:35PM
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GM fan 101 is right we only rent it from the local, state and federal government and the rent goes up every year.  We can't do anything without permits and extra fees and this goes as far as a small fence on the property line, placing an above ground pool in the yard and anything else.
Jun 15, 2014 11:39AM
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"In Tampa, unsuspecting homeowners signed over to the builder's holding company the "eternal rights to practically anything of value (found) buried underground, including gold, groundwater and gemstones," according to the Tampa Bay Times."  GOOD, then they also own the sinkhole that might open up and can pay to fill it in.
Jun 15, 2014 9:04AM
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Do you really thing you "own" your home?  Just don't pay the taxes and see how long you "own" your home.  You are renting your home from the government.
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