Land Descriptions & Legalities

Chapter 12: Land Descriptions & Legalities

Introduction

Real estate valuation hinges on a thorough understanding of land characteristics and their legal framework. This chapter delves into the scientific principles underlying land descriptions, exploring the legal systems that define property boundaries and rights. A strong grasp of these concepts is critical for accurate appraisal and informed real estate decision-making.

12.1. Defining Land and Site

• Land: In its raw state, land represents the unimproved surface of the earth, encompassing the subsurface and airspace above, including natural resources. Its value is intrinsically tied to its utility - its potential for various uses.

• Site: A site is land that has undergone improvements❓ such as the installation of utilities, construction of access roads, implementation of drainage systems, and other enhancements that render it ready for development. The transformation from raw land to a developed site significantly alters its value.

  • Experiment: Compare the market value of two adjacent parcels of land, one raw and the other a developed site. The difference in value reflects the cost and value added by the site improvements.

12.2. Scientific Principles of Land Characterization

Land characterization involves the application of various scientific principles to understand its physical and chemical properties. These properties influence its suitability for different uses and, consequently, its value.

• Geology and Soil Science: The geological composition of the land and the characteristics of its soil are crucial factors. Soil type, texture, permeability, and bearing capacity dictate the types of structures that can be safely built.

  • Formula: Soil bearing capacity (q_a) can be estimated using Terzaghi’s bearing capacity equation:

    • q_a = cNc + γDNq + 0.5γBNγ
      • Where:
        • q_a = Allowable bearing capacity
        • c = Cohesion of soil
        • γ = Unit weight of soil
        • D = Depth of footing
        • B = Width of footing
        • Nc, Nq, Nγ = Bearing capacity factors (dependent on the soil’s friction angle)

• Hydrology: Understanding the water table level, drainage patterns, and potential for flooding is essential. Floodplains, areas prone to inundation, require specific construction techniques and may be subject to development restrictions.

• Environmental Science: Assessing potential environmental hazards, such as soil contamination from previous industrial activities or underground storage tanks (USTs), is vital. The presence of contaminants can significantly reduce land value and necessitate costly remediation efforts.

  • Example: Land previously used as a gas station may have soil contaminated with petroleum hydrocarbons. Remediation might involve soil excavation and disposal or in-situ treatment.

12.3. legal descriptions❓ of Land

A legal description uniquely identifies a parcel of land, ensuring that it can be differentiated from any other parcel. It is a fundamental component of deeds, plats, and other legal documents related to real estate ownership. USPAP requires the appraiser to properly identify the subject property by a legal description.

• Importance: Addresses are not legally definitive and can change. Parcel numbers are helpful, but the underlying legal description is paramount.

12.3.1. Metes and Bounds System

This system uses distances (metes) and directions (bounds) from a defined point of beginning (POB) to trace the perimeter of a property.

• Monuments: Natural features (rivers, trees) or artificial markers (fences, roads) serve as reference points.
• Calls: Boundary lines described by their course (direction, usually in degrees, minutes, and seconds) and distance (length).
• Closure: A critical requirement is that the description must close, meaning the final line returns❓❓ to the POB.
• Mathematical Principles: The metes and bounds system relies on basic trigonometry and geometry to calculate the area enclosed by the described boundaries. Surveyors use instruments like total stations and GPS to accurately measure angles and distances.

• Limitations: The system’s accuracy depends on the permanence of the monuments and the precision of the measurements. Errors in either can lead to boundary disputes.

  • Practical Application: Surveyors use coordinate geometry (COGO) software to analyze metes and bounds descriptions, calculate areas, and identify potential errors. COGO allows for the import of survey data (angles and distances) to create a visual representation of the property and perform mathematical checks to ensure closure.

12.3.2. Rectangular (Government) Survey System

Also known as the Government Survey System, this system divides land into a grid of rectangles.

• Principal Meridians and Base Lines: North-south lines (principal meridians) and east-west lines (base lines) serve as the primary reference points.
• Township and Range Lines: Township lines run east-west at six-mile intervals parallel to base lines. Range lines run north-south at six-mile intervals parallel to principal meridians.
• Townships: The intersection of township and range lines creates squares of approximately six miles on each side. These are further divided into 36 sections.
• Sections: Each section is approximately one mile square (640 acres). Sections are numbered in a serpentine pattern within the township.
• Subdivisions of Sections: Sections are subdivided into quarter sections, quarter-quarter sections, and so on.
• Correction Lines and Guide Meridians: These lines compensate for the curvature of the Earth, which causes range lines to converge towards the North Pole.
• Mathematical Basis: This system relies on the principles of plane geometry to define land parcels. The area of a rectangular section is calculated by multiplying its length and width (approximately one mile each).

• Reading Legal Descriptions: Government survey descriptions are read backwards, starting with the smallest subdivision and working up to the principal meridian.

  • Formula: Area of a Section = Length x Width = 1 mile x 1 mile = 1 square mile = 640 acres

  • Example: “The NW 1/4 of the SE 1/4 of Section 23, Township 4 North, Range 2 West of the Principal Meridian” describes a 40-acre parcel.

12.3.3. Lot and Block System

Commonly used in urban areas, this system relies on recorded plats that depict subdivisions of land into individual lots and blocks.

• Plat Recording: A developer creates a plat, which is a map showing the layout of the subdivision, including lot dimensions, street locations, and easements. The plat is then recorded with the local government.
• Legal Description: A legal description in this system simply references the lot number, block number, and the name of the recorded plat.
• Simplification: This system simplifies legal descriptions compared to metes and bounds or government survey methods, especially in densely populated areas.

12.4. Title and Record Data

• Research is Paramount: Appraisers must research historical market activity in the subject’s market area.
• Client Assistance: The client needs to help the appraiser identify the real property to be appraised, but you should make every effort to make sure the data is accurate.

12.5. Ownership Information

• Public Records: County records (auditor, assessor) are the primary source.
• Owner Disclosure: Property owners❓❓ can provide title insurance policies or deed abstracts.

• Key Data:

  • History of ownership (recent sales, listings, options).
  • Existing leases.
  • Easements and rights of way.
  • Deed or plat restrictions.
  • Subsurface rights (mineral extraction).

12.6. Zoning and Land Use Information

Zoning regulations dictate how land can be used, directly influencing property value.

• Local Authority: Planning or zoning departments are the primary sources of information.
• Appraiser Responsibility: It is every appraiser’s duty and responsibility to thoroughly check zoning and land use regulations applicable to the subject.

• Key Aspects:

  • Minimum lot size.
  • Utility availability.
  • Minimum building size.
  • Minimum road frontage.
  • Minimum side yard requirements.

12.7. Compliance Categories

1. Legal Land Use: The allowable uses may be simple or complicated.
2. development standards❓❓: The parcel is being used in compliance with zoning requirements, but the lot size, side yards, or a building in the setback area might be non-compliant with development standards rather than illegal land uses.

12.8. Key Terms (From Original Document)

Assemblage
Base Line
Corner Influence
Excess Land
Floodplain
Frontage
Legal Description
Lot and Block System
Metes and Bounds System
Plottage
Principal Meridian
Raw Land
Rectangular (Government) Survey System
Site
Stigma
Surplus Land

Conclusion

This chapter highlighted the critical role of land descriptions and legal frameworks in real estate valuation. Understanding the scientific principles underlying land characterization and the nuances of various legal description systems is essential for appraisers and real estate professionals to accurately assess property values and navigate the complexities of real estate transactions.