What is a Property Exception in Real Estate Transactions?
I've seen many property buyers scratch their heads over property exceptions. These little details can make a big difference in what you actually own when purchasing real estate. Let's clear up any confusion and help you understand exactly what property exceptions are and how they might affect your next property purchase.
Property Exception: An exception in real estate is when a specific part or right of a property is deliberately excluded from being transferred during a sale or conveyance. For example, when a homeowner sells their property but retains the mineral rights beneath the land, those rights are considered an exception to the sale.
Common Types of Property Exceptions
Property exceptions come in various forms, and you'll want to know about each one before making your next purchase. Let's start with mineral rights - one of the most significant types of exceptions you might encounter. Oil, gas, and mining rights can be separated from surface rights, meaning someone else might own what's beneath your feet. This practice started during the gold rush era and continues through today's natural gas boom.
Access rights and easements form another major category. Your property might have utility company easements allowing them to maintain power lines or underground cables. Maybe there's a shared driveway agreement with your neighbor, or perhaps a public walking path crosses one corner of the land.
Water rights can get complicated too. Surface water rights might belong to someone else, or you might share rights to underground aquifers with neighboring properties. If your property borders a river or stream, riparian rights might come into play.
How Exceptions Impact Your Property Ownership
These exceptions can affect what you can do with your property. You might find yourself limited in where you can build or how you can develop the land. Some exceptions might restrict you from drilling a well or installing certain types of fencing.
The financial side matters too. Property exceptions can impact your property's value and might affect your insurance coverage. You'll need to know who's responsible for maintaining excepted areas - like that shared driveway we mentioned earlier.
Identifying Exceptions Before You Buy
A thorough title search is your best friend here. The title report will list all exceptions, but you'll need to read carefully and understand what each document means. This isn't something you should tackle alone.
Working with a title company and real estate attorney can save you headaches later. They'll help translate the legal language and point out potential issues you might have missed.
Steps for Your Due Diligence:
Request and review the preliminary title report
Ask questions about any exceptions you don't understand
Research the history of significant exceptions
Consider how exceptions might affect your intended use of the property
Negotiating Property Exceptions
Some exceptions might be deal-breakers for you, while others might be perfectly acceptable. The key is knowing which is which. You can often negotiate the purchase price based on significant exceptions, but you'll need to understand their true impact first.
Sellers must disclose known exceptions and provide related documentation. This transparency helps everyone make informed decisions.
Modern Trends in Property Exceptions
New types of exceptions keep popping up. Solar panel easements, conservation agreements, and drone flight restrictions are becoming more common. Building codes and zoning laws continue to evolve, creating new categories of exceptions.
Protecting Your Interests
Title insurance offers protection against unknown exceptions, but you'll still need proper legal documentation for known ones. Keep all paperwork organized and accessible - you might need it later.
Making Smart Decisions About Property Exceptions
Property exceptions don't have to be scary. With proper research and professional help, you can make informed decisions about which exceptions you can live with and which ones should send you looking for a different property.
Bellhaven Real Estate offers expert guidance through the entire process. We'll help you understand property exceptions, evaluate their impact, and make decisions that protect your interests. Schedule a consultation with us to discuss your next property purchase and get a free property exception assessment.