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Ranch Due Diligence – An Overview of Access Issues

In most sectors of real estate, the ability to legally access a property is a basic assumption that rarely receives significant consideration during the due diligence process. When purchasing either residential or commercial real estate in a town or city, there is usually little doubt about being able to access the property. Municipal zoning regulations and land plans basically eliminate situations where legal access could be an issue. However, on rural western ranches for sale, access should never be assumed, and ensuring legal access is one of the most important issues to understand during the due diligence process.

Elbert

The most basic step toward understanding access (and any other major issues regarding the ranch) is to have a title commitment issued by a reputable title company. If there is no legal access to the property, the lack of access will be noted in the title commitment, and the title company will most likely not insure the title until access is secured.

If there is no legal access, there are myriad ways to go about securing it, but the timeframe and expense can vary wildly depending on each specific situation. Below are a few general hypothetical scenarios of how securing access across neighboring private land could play out:

If Landowner Jones accesses his ranch through Landowner Smith’s ranch, but there is no recorded easement legally granting the access, both landowners will need to work together to put an easement in place.

  • Best-case scenario, the two landowners are on good terms, and they are able to come to a congenial agreement quickly, draft the easement, and record it with the county.
  • Next-best scenario is that Landowner Jones would need to pay Landowner Smith some sort of fee in exchange for Smith granting the easement. The fee is paid, then the easement is drafted and recorded.
  • Worst case, Landowner Smith refuses to cooperate in which case Landowner Jones would need to explore his legal options and the possibility of suing Smith for access. A skilled real estate attorney could advise on the likelihood of a lawsuit being effective, but this approach has the potential to be time consuming and expensive. In the end, however, the legal fees and time may be necessary costs, as a lack of legal access decimates a property’s value.

It is important to note that just because a title commitment indicates that there is legal access does not guarantee that a landowner is free and clear of all future issues. An experienced ranch broker is able to identify potential access issues, helping landowners ensure their ranch is marketable and steering buyers away from potential traps.

For example, I recently encountered a ranch that abutted a county road (ensuring legal access) but its “driveway” meandered through National Forest for a quarter mile before entering the deeded land. This particular ranch had been owned by the same family for generations, and they did not have permits or easements from the Forest Service to use the driveway—they had simply been doing it for decades.

While this method of accessing the ranch had worked for years and could possibly continue working without issue, there is always the chance that the Forest Service could come in and shut down the driveway. This action would force the landowner to build a new driveway, located exclusively on their deeded land, which could be a significant expense or even implausible due to the topography. So while this ranch did have legal access, access was still an issue that could severely affect its usability and value. Ultimately, we advised that the buyer secure a permit from the Forest Service prior to purchase to avoid any future surprises.

Access issues can be as diverse and varying as ranches themselves, so sellers and buyers need to be sure to fully understand all current and potential issues. At Mirr Ranch Group, our decades of collective experience make us uniquely qualified to guide our clients through these important issues and insure that there are no expensive mistakes.

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