Legal Terms of Real Estate for Farms
Before you go buying or selling a farm, you might want to be aware of some of the most common real estate legal terms for both farms and farm house properties.
Most of these terms and considerations will be on your legal documents so you will want to be well versed and comfortable with each term and it’s meaning before you sign on the dotted line.
This page and it’s contents are not meant to replace legal advice or counsel. If you are uncertain about any legal document you are signing consult with a professional lawyer first. It is their job to keep you safe from financial harm and ensure that all your land purchases are well researched.
Common Real Estate Legal Terms
Agreement of Purchase and Sale
- Standard document which describes the terms offered by both parties, vendor and purchaser. This document is also to contain any encumbrances on the land. It is in your best interest when submitting an offer to make it contingent on a clear title search and financing.
Easements
- An easement is a legally binding right of way placed on a block of property. These may be on your property for other’s use, or on another property for yours. The most common easement is for vehicular access through one property to an adjoining one.
Eminent Domain
- Some agencies have the right to expropriate land with compensation to the owner for public use such as school construction, power lines, roadways, etc. The local planning department will know of any current proceedings in the county agenda.
Land Contracts vs. Mortgages
- A land contract keeps the title in the previous owner’s name until the full purchase price has been paid. This is risky business and should be avoided at all costs. A mortgage allows the purchaser a full and clear title at the time of land transfer.
Encumbrances
- Encumbrances are legally binding rights of the Crown or previous owner to exploit natural resources of the property, e.g., minerals, timber, water.
Survey
- A legal map of the property and it’s boundaries. Surveys are usually registered at the time of sale with the County Registrar or Land Registry Office.
Taxes
- Set amount of money paid yearly to the local government office for local services; ie., school, water, sewer, etc. Aside from knowing what the annual tax rate is for a property, check also for tax liens that might have been placed on the land during previous ownership.
Title Search
- Usually conducted by a lawyer for a nominal fee to ensure that the title or deed is free of liens and encumbrances.
Zoning
- If the land in question is not zoned for your intended purchase ensure that the zoning can be changed by the local Zoning Board.
More on Real Estate Legal Terms
You may also like to visit GoodByeCityLife’s Country Living Land Rights page for more detailed definitions of rural land rights.
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