Can your waterfront property have a pier? Maybe

WRA.org Article by Tom Larson, WRA

Until January of this year waterfront property buyers could have reasonably expected to have the right to place a pier at the water’s edge of their property.  A Supreme Court case settled a family dispute with the outcome property rights of landowners on a flowage.  The legal perspective is explained in the link to attorney Tom Larson’s article in the WRA Real Estate Magazine, April 2018.

Tom explains Wisconsin has about 260 flowages around the state, and a flowage is a body of water created by a dam. There are different rights for flowages created by a lake, than those created by a river, or stream.  The bed of the flowage created by the stream or river is generally owned by a private entity.  This is the problem:

Envision you are buying lake front home on a flowage.  At the water’s edge is a beautiful wooden pier with a boat slip, a lift, a pontoon boat, a fishing boat and a jet ski.  All included in the sale.  Are you sure you have legal right to keep this pier for your pleasure? Up through 2017 the presumption was you could.  Because of the decision it is now critical that you know if the flowage was created by the damming of a lake, or a river or stream.  If the lake bed of a flowage created by the dam on the river or stream is not owned by you, but a private entity, you can be prohibited from placing a pier which stands on the bed.   However, it appears if the flowage was created by a dam on a lake, you are permitted to place the pier because the bed is not owned by a private entity but belongs to the government which permits legal access to the water for shoreline property owners.

Lakes are not all the same. When you go to look at property, know if the body of water is a flowage, and then know if the flowage was created by a dam on a river, stream, or a lake. It matters.

 

Pleading Letters Move No One to Acceptance v. Safe Offer Terms

Three people made offers on the same house. Two offers included well written, emotion inducing letters with photographs of the married man and woman, complete with details of their employment, education, professional credentials, and community involvement in causes for good. Both expressed their love for the property and their awareness of the owner’s own remarkable traits.  Each of these offers included double digit items (14 and 17) an owner would counter to make the offer safe enough for the owner to commit to. Two of the three offers were for prices the owner would accept.

One offer was for the most money, and represented less risk than the other two. However, it included two ambiguous contingencies, and one exit clause the buyer could exercise six days prior to closing.  The open exit door and ambiguity were reasons for the seller to question the buyer’s commitment.

Had any of the offers been written with terms proving the buyer’s no-reservation commitment to closing, or at least left no exit doors open, their offer would have been accepted. The letters induced an emotional response. The emotional response did not cause a compelling response  to accept one offer or negotiate with any one person.

Had as much attention been given to writing a customized, seller-safe offer, any one of these couples could have had their offer accepted. And, unfortunately, two of the couples and two of the licensees may think their letters helped their cause.

Buyers are improving their skill in writing fiction. They’re getting professional help on-line.  Be the licensee who improves her skill in customizing, seller-safe offers to match the commitment of the buyer.  The pleading letter is no match for customized offers.

Inspection Contingency

The inspection contingency in the Wisconsin Offer to Purchase is designed to permit a buyer reasonable time and access to the property to complete their due diligence.  A definition of “defect” was added to the agreement to create some objective criteria for a defect.  Objectivity is not a strength of the definition. Defect is still subject to the opinion of the buyer and seller. (Not the licensees. Our opinion is not relevant in the conversation.)

To deter a buyer from objecting to only the defects which are worth losing the property over, the contingency was built with a lever on the Seller’s side.  Here’s a visual of the deterrent: Buyer discovers a few defects he wants cured prior to closing.  The Buyer approaches the Seller with a NOTICE of Defects in his hand. Standing in front of the Seller, on a trap door, the Buyer gives the Notice to the Seller. The Seller receives the Notice and reads:  Buyer objects to the following defects identified in the attached inspection report.  The Seller has the Notice in her left hand, and her right hand is on a lever.  With no explanation required, the Seller who has been Noticed, may pull the lever, opening the trap door, and send the Buyer away.

A less risky approach could be attempted first. A buyer could offer a written amendment to the seller requesting the seller agree to a specified resolution. A repair prior to closing or a price concession are typical.

Beginning with the amendment, a Buyer retains the right to deliver the Notice prior to the deadline for delivering the Notice.  Some issues are worth the risk to some buyers. No one should take the Notice step without weighing the cost of the Seller’s choice.  On the other side, before a Seller terminates an offer because of a Notice of defects, a Seller may want to consider their obligation to future transactions now that they have some information about a condition they did not have prior. Buyers trust that the fact the owner will have to contend with the issue to satisfy the next buyer is enough to motivate the seller to cure the defects and not terminate the Offer.

Just my opinion, but people waiting in secondary positions are likely to accept a condition the first buyer would not, or because they are the fresh face waiting in the wings, Sellers are receptive to giving the next buyer something they would not give the primary buyer.  A human nature thing.