1. Legal Lot Status. While it is the Seller’s duty to comply with the subdivision laws for the sale or transfer of real estate, the prudent Buyer should also confirm Legal Lot Status to avoid future complications, including litigation. In order to establish Legal Lot Status, it is important to determine on what date the lot was created and then look to the local land use code for compliance. If the lot was “created” before the enactment of the Subdivision Statute and/or reciprocal local code the lot may be “grandfathered in”, and thus, avoid noncompliance. Usually, when the legal description contains a Lot number and the name of a Plat there is not an issue. But a metes and bounds legal description, a portion or part of a larger tract, or a tax parcel in the legal description may be a tell tale sign of an illegal lot. It is recommended to contact the local jurisdiction directly and see if the property has any record of Legal Lot Status:
Whatcom County: “Lot of Record”. See: https://www.whatcomcounty.us/1090/Lot-of-Record
City of Bellingham: “Lot of Record Determination”. See: https://www.cob.org/Documents/planning/applications-forms/legal-lot-determination.pdf
Skagit County: “Lot of Record Certification”. See: https://skagitcounty.net/PlanningAndPermit/Documents/Forms/Lot%20Certification/Lot%20Certification%20Info.pdf
Snohomish County: “Lot Status Verification”. See: https://snohomishcountywa.gov/2923/Lot-Status-Form
King County: “Legal Lot Status” See: https://www.kingcounty.gov/depts/permitting-environmental-review/info/PermitTypes/landuse/LegalLot.aspx
Without legal lot status, the Buyer most likely not be able to obtain building, septic and other developmental permits unless the innocent purchaser exception applies. https://app.leg.wa.gov/rcw/default.aspx?cite=58.17.210
Unfortunately, Title Insurance does not provide coverage for non-compliance with subdivision laws.
2. Permits, History and Future Intended Use. The prudent Buyer should investigate the history of developmental permits relating to the property. Many times issues of non-compliance can be determined. In order to provide some time to do so it is recommended the Buyer include the appropriate due diligence condition in the Purchase and Sale Agreement. Sometime permits do not have “final” approval and this can result in a denial of homeowners insurance coverage in the event of a liability event. Further, the Buyer should investigate whether future developmental permits can be obtained so Buyer can use the property in the future as intended. A common scenario involves a house with a Septic Permit for 3 bedrooms cannot be expanded for one more bedroom because of site limitations.
3. Utility Service Confirmation. The prudent Buyer should confirm what utilities serve the property and that there are no late-comers agreements, hook up fees, or other charges due and outstanding. Normally a proper utility account confirms everything is in good order. In rare instances some lots are served by a “spaghetti” line which is an unauthorized connection to the utility service.
4. Extended Title Insurance/Survey. Normally standard Title Insurance is specified in the Purchase and Sale Agreement. But this type of coverage has many limitations and exclusions. For example, standard title insurance does not cover adverse claims, encroachments, or prescriptive rights, as well as noncompliance with governmental laws and codes. So ideally the Buyer should obtain extended Title Insurance, which has less limitations and exclusions. But extended Title Insurance often costs 25-30% more than Standard Title Insurance and usually will necessitate a survey which may cost several thousand dollars and time delays depending on the availability of the surveyor. However, the survey should help identify any adverse claims, encroachments, and prescriptive rights. As a rule of thumb if the 4 corners of the property cannot be located and the property lines somehow confirmed it is best to have a survey done.
5. Disclosure Statement. Under RCW 64.06 the Seller has a duty to provide the Buyer with a Disclosure Statement for unimproved or improved residential real estate unless waived by the Buyer. However, the Buyer should not waive the Disclosure Statement even if it is not binding according to the the Statute. The Buyer can learn more about the property and also obtain information that may be helpful for an inspection of the property. The parties, may however, agree to include the Disclosure Statement as part of the Purchase and Sale Agreement.
6. Inspections. Of course the prudent Buyer should have the property inspected by a competent inspector who has suitable experience. However, the inspection excludes hidden or latent defects or matters not easily visible or apparent. So the inspection is really never 100%. Note the inspection required by a lender for financing may not be satisfactory for the Buyer. In that case, it is recommended that the Buyer insist on a more qualified inspector or a more thorough inspection instead of paying for two separate inspections.
7. Spend the Night. As crazy as it sounds the prudent Buyer can ask for a contingency to spend the night or have an extended stay of 24 hours or more to get a “feel” for the property. A longer visit helps give the Buyer a real sense for the property and may help identify local conditions that are not apparent from a shorter visit(s), such as, noise from trains or planes, unpleasant odors from a neighbor’s failed septic system, or nearby farming or illegal activities.
The above is list is by no way exhaustive. And the above is not intended to be legal advice but is general information provided as a courtesy.
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