Situation: I have an original owner in her 90s with 24-hour in-home health care. She is one of four original owners from the original 1972 land purchase. The home on 2+ acres is to be sold with the condition that she could lease back indefinitely as physically leaving the home was not an option. The home is small, but architecturally significant on a very special lot with incredible 360-degree views and an 800’ border along the Phoenix Mountain Preserve.
(With these stories, I prefer to keep addresses and names anonymous. While I’d like to post copies of the surveys so you can visually reference what you’re about to read, please use your imagination or sketch it out as you go.)
The land was a large, rectangular property (short side going east-west) originally purchased in 1972 with another couple (see Phoenix Mountain Preserve Part 1). In 1978, the property was surveyed and split right down the middle. Each family took a half (east half and west half). At the time, they created a mutual access agreement for a roadway that would run equally on each property and take you from the top of the property (from the main street) to the southern half of the property. This was done in the event they wanted to turn their now two lots into four lots in the future (this easement comes into play later). The home was built in 1979 on the north half of their western half and was one of the only homes around. There were mostly dirt roads at this time.
Given the land size and the zoning, I estimated 80% of our inquiries will be to split the land, which could take more than 90 days of due diligence time via an ALTA survey and the City of Phoenix’s pre-application process. Given my experience with hundreds of land transactions, land like this needs an updated survey done by the seller prior to listing for the following reasons:
- To answer questions good, bad, or ugly to reduce the due diligence time requested and pinpoint use by right. I’d rather market positive uses and rights already researched or even have a negative answer prior to listing than during a long escrow period.
- Even though the property has a home, the property sits on what is referred to as “metes and bounds” property. It is described by a long legal description of where the corners of the property are located, and not by a simple subdivision name and assigned lot number.
- The home sat in a peculiar location on the north half of the property but very close to where any split line would be. We needed the exact measurements of the home and how it was positioned on the overall property.
- There is almost always a problem waiting to be discovered when working with land that has not been surveyed in many years. Surveys done prior to modern technology have many human error mistakes and issues.
I started discussions with the selling family in August 2022 regarding general value, the family’s unique needs, and the logistics required to achieve these goals. In May 2023, we executed a listing agreement that would hold the property off market while a survey was conducted and we did more research on the viability of the property’s highest and best use. The home itself was unique and architecturally interesting but we were honest with ourselves that a high percentage of buyers would be interested in tearing it down and replacing it with a modern home.
What I want to do in a situation like this is as much due diligence myself prior to listing the property – I do not want to leave something to chance that pulls the property off the market for an extended period of time while a buyer examines its viability. I want those answers up front so we can hit the ground running with the MLS listing and fine-tune who our target buyers are.
We engage with a surveyor in late June and receive his report in August. My hunch was correct – the property lines were miscalculated during the 1978 split of the property. The western property line was encroaching into the Phoenix Mountain Preserve by a little less than 3 feet, which made the lot that much more narrow. Technically, it was discovered to be a non-conforming lot since it now did not meet the 165’ width guidelines for a single family R-43 lot in Phoenix. Getting city approval on a split would be impossible on a non-conforming lot, nor would a simple demo / new construction permit to replace the house.
Normally, you could try and claim adverse possession and claim this 3 feet if it were to happen on other private property. Adverse possession does not apply to public property like the Mountain Preserve. So I had to talk to the current owner of the next door parcel. Remember the original lot split back in 1978? I sold the eastern side in 2021 (Phoenix Mountain Preserve Part 1), but it had re-sold. The original owner I sold it for (part of the original buying group) sadly passed away in 2022. I tracked down the agent who represented the current owner. He was designing a new home for that property, so we caught him just in time. Since our lot was off by less than 3’, it turned out he had gained less than 3’. We needed him to simply agree to move our dividing line back to where he originally thought it was, and where the four original owners intended it to be, and sign off on some new legal descriptions. (In short, he had nothing to lose or gain with the mistake we found.)
Realizing he had leverage, he made us a low offer on the property, and took a very long time to negotiate making our situation drag out even longer. Our biggest worry was he would ignore the request or not agree.
We did hold one card – the old mutual access agreement in case the original property was split into four lots. In conversation with his architect, I was told he was not comfortable with the old easement the two original families had placed equally on the properties to mutually access the southern half. Since one of the four original owners was still alive (my seller/client), I negotiated with the neighbor to give back the 3’ of land to my seller/client in exchange for my client signing an abandonment of easement document. WIN!
Our surveyor drew an updated ALTA survey reflecting the new legal description that removed the encroachment into the Mountain Preserve and fixed the dividing property line between the two original lots. He also noted the easement abandonment. We engaged with my real estate attorney to draw up abandonment language and a quit claim deed for the 3 feet we needed back. Once we had these signatures, our surveyor recorded the new ALTA survey and we were finally done. Everyone now had what they thought they had.
It was now the end of October 2023. I had worked on this exhaustive prep all summer long. Finally, it was time to bring the property to market.
We had so much interest we chose to deal with a local buyer who was not basing anything on lot splits or new construction and allowed the seller to stay in the property for an indefinite time open-ended lease. It was an amazing transaction with a buyer who respected my client’s wishes and needs and respected the special land the property sits on. It’s in great hands.