This episode reveals a never-before-encountered requirement on a South Carolina property purchase (nine months in process due to survey and zoning complications) where the closing attorney flagged that third-party lenders may require road maintenance agreements for the 50-foot private egress easement serving three other properties, two of which may be landlocked without it.
Key Takeaways:
- Private Road Easements Can Require Maintenance Agreements Properties with private roads providing access to other parcels may need formal road maintenance agreements costing under $1K to draft but potentially requiring signatures from all benefiting property owners for lender approval.
- $90-100K Price Point Creates Lender Uncertainty Properties in this range sit on the borderline where some buyers purchase cash while others seek financing, making lender requirements for road agreements a risk factor worth addressing proactively.
- Structure Agreements to Minimize Owner Liability When easements run 100% on your property, consider placing all maintenance responsibility on the subject parcel owner in the agreement to avoid negotiating cost-splits with potentially difficult legacy neighbors.
Listen to the full episode for detailed guidance on navigating road maintenance agreement requirements, working with closing attorneys on novel issues, and managing properties with complex easement situations.
(Podcast transcript below)
Hi, Chris Duff over at Serious Land Capital, vacant land funding partner. today, relatively quick note, though, a lesson, that has never come up before in the thousands of deals that we’ve reviewed over the past several years. So, we’re planning on purchasing,
A properties as part of a portfolio. Really it’s two separate actual parcels, but one of those two parcels is split between two APNs. So a total of three properties in South Carolina. I think I’ve commented a bit on this deal before. I mean, we’ve been working on it for close to nine months now. Been way, way longer than.
desired or anticipated based on a whole bunch of survey and then planning and zoning related requirements for title of close on these properties that was very unclear to us when we first engaged on this contract. So we’re finally set to anticipate closing likely by this week on both properties.
Finally here though the closing attorney had reached out to us regarding one of the surveys today Because this property It’s mostly clear. I mean basically fully clear and has solid road frontage But there is a private road
alongside an easement, which is sharing the border of one boundary line for the property, roughly a 50 foot wide egress easement. And it does provide direct access to
three other properties, two of which may be landlocked without it. It’s pretty out of the way. And I think there’s, it’s been a while since I’ve looked at the aerial, but I’m fairly certain that there’s a tree line that also blocks where that easement is so that whoever might try to build the subject parcel really doesn’t have to look at that easement. And it’s pretty out of the way.
wouldn’t consider that a major detractor for the property. but the attorney had called us to mention, Hey, you know, you guys buying cash for this deal, no problem. But, know, if you were planning to sell it, third party lenders occasionally may need a road maintenance agreement associated with any private roads.
on a property of which there isn’t one currently. So I hadn’t been made aware of this requirement before. And we’ve been back and forth on this property for nine-ish months, never came up. We’ve never seen this come up in other properties that we’ve purchased or gone deep on. And I can’t recall if we’ve ever gotten one either that had a separate private road.
Providing access for other landlocked properties, you know, oftentimes we do have properties with actual easements on it, but Yeah, not providing access for others at least that I can recall off The top of my head here
And so the thing is that it would be very easy to spin up. You know, so basically I wanted to get down to brass tacks. Okay. You know, if we end up selling this property and a third party lender is involved, you know, it’s probably a property that we’d anticipate selling between 90 to a hundred thousand. So it’s kind of right on the borderline of where people might seek a third party lender or not.
There’s plenty of folks who might be able to buy cash. With that, some who might seek via lending, but you know, if it was like a $300,000 property, I’d be more concerned that there’s going to be more routinely a lender involved there. you know, this one’s kind of borderline, but you know, even if we did need that, we could quickly spin that up, you know, sub one week to arrange the paperwork.
and less than thousand dollars to actually prep that road maintenance agreement. It was a little unclear from the attorneys here, but occasionally the county, who we’ve already had issues with working with, so I’m just kind of assuming the worst with them is that they might need signatures from each of the property owners agreeing to that road maintenance agreement.
so that could throw, a bit of a hurdle into, selling the properties that we’re trying to work with the broker. See, you know, can we really assess who these folks are? I think he’s talked to some of them before, but I just want to ensure that we’re not running into some. You know, last minute red flags here. And I clarified with the attorneys as well too. It’s like, okay. You know,
The road is 100 % on our property. So, yes, it could make it a little less attractive to an end buyer. But, you know, effectively we could include within the agreement that, you know, the owner of the subject parcel is responsible for maintaining the road. I’m not really sure what the…
Consequences would be if it wasn’t maintained. I’m assuming you can do fairly loose Guidelines there, especially for basically private road that’s effectively gravel at the moment It’s certainly not an asphalt road. I’m gonna double-check that
but, yeah, from, from my understanding, it was pretty simple, either gravel or dirt. really no maintenance associated with that or certainly wouldn’t be too expensive. And yeah, you could arrange for the agreement to be covered, you know, split costs between all the owners or, or the folks, receiving access to the, to their own properties from the road. But yeah, you might get some pushback.
especially for legacy.
neighbors who are used to never paying for anything and even if it’s just like an anticipated, yeah, it’s going to be no cost here or it could be more difficult to get the signatures. So we probably just want to defer to, we’ll put this all in the subject property owner, but, you know, assuming it’s, you know, it’s really not a major road or anything anyway, that it’s probably going to be a pretty minor concern with minimal
legal consequence to an end buyer. Not ideal, but not a deal breaker either from our understanding and chatting further with the attorney. So TBD on the full resolution here, I’ll share more. You know, especially once we actually get to the full sale of this property, what else might come up with that? But wanted to share that all with you here. Fairly nuanced.
Um, deep cut, uh, topic here, but you know, it is something that may come up in your journey as a land investor just to be aware of. Maybe it’s just a South Carolina thing. I don’t know. Um, or it could be more of a global issue, uh, across the U S so FYI, in case you’re dealing with a property like this or, know,
just word to the wise, if you do encounter a property like this one. with that, check out seriousland.capital for any of your funding needs, land daily diligence, Facebook group for zero cost review of your land deals, and landpricer.ai was just doing work on that earlier, my own internal tests.
bit more to do tomorrow and then sending out those beta invites very shortly here. Also, plugging the land on conference again in early August with Dave Dunstan. I know he just was featured on Seth’s ReTipster podcast earlier today, talking about it. If you do want to sign up, all you need to be accepted is making at least six figures revenue as a land investor.
And you can use my last name, all lowercase, Duff DUFF for $200 off your ticket. It’s my favorite conference associated with land each year. Hope to see you there. Bye.
