Buyer Beware Caveat on Waterfront Property

Buyer Beware Caveat on Waterfront Property in Virginia

You are excited to have found the perfect waterfront property. 

It’s pricey . . . anywhere from 25% to 45% more costly than a comparable property located off the water.  That extra cost is okay, though, because that’s the price you pay to build a dock, get a boat, fish, swim, and enjoy that beautiful, mesmerizing waterfront view.  Virginia law categorizes these important, highly desirable, waterfront property features as “riparian property rights”. 

Waterfront Property Purchase Risk

But wait . . . what if you learned after having closed on your waterfront property that:

• You cannot build that dock because a prior owner severed the riparian property rights and kept them for herself or else sold them?
• Or what if you learned after you closed that the dock that came with the waterfront property was built without the proper permits and now the Virginia Marine Resources Commission is demanding you pay a fine or, worse, ordering you to tear it down because it encroaches in the “riparian area” owned by your neighbor?
• Or what if, right after you moved in, the neighbor started construction on a boathouse next door that will block your view, this construction being done on the strength of a permit that was in the pipeline when you put your waterfront property under contract, and was issued shortly after you closed?

Buyer Beware Caveat Emptor - Virginia Buyer Beware State

Caveat emptor, or “let the buyer beware”, is a common law doctrine that applies to the sale of real property in Virginia. Virginia is a buyer beware state and places the responsibility on the buyer to investigate and discover any defects in the property before completing the purchase.

False Representations

Caveat emptor comes into play immediately after the buyer and the seller exchange deed for money at settlement. There are, though, a few narrow exceptions to the rule of caveat emptor. A seller of waterfront property who intentionally makes false representations concerning a material fact to the buyer cannot escape liability by invoking caveat emptor.

Seller Conduct

Additionally, a seller must not take any actions that divert the buyer from making necessary inquiries or inspections. If the seller’s conduct or statements throw the buyer off guard or prevent the buyer from discovering defects that a prudent person would have found, the seller will be liable despite the caveat emptor doctrine.

In the end, however, caveat emptor places the responsibility on the buyer to exercise ordinary care and prudence in making inquiries and inspecting the premises prior to closing.

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Will Title Insurance Protect Against Lost Riparian Property Rights?

Most purchasers wisely agree to purchase title insurance when closing on the purchase of real estate. However, the majority of title insurance policies exclude coverage for riparian property rights. This means that title insurance provides little or no benefit to the waterfront purchaser who learns post- closing that her riparian property rights are compromised or have been lost altogether.

Due Diligence for the Purchaser of Waterfront Property

Due diligence is the way that the purchaser of a waterfront property confirms that the full range of riparian property rights convey to the buyer at closing. Arranging to have advice from an attorney with expertise in the Virginia law of riparian property rights is essential.

When Should I Hire a Waterfront Property Lawyer?

It is preferable to make this arrangement before signing the real estate contract of purchase and sale, as this enables the waterfront property lawyer to help the buyer ensure that the document affords a due diligence period during which the buyer has a reasonable time to make her inquiries and inspections and entitles the buyer to escape from the contract if those inquiries produce an unsatisfying result. Not all of our clients came to us prior to entering into contract. We have helped many after the contract was formed, but prior to closing. We have even helped some who sought our assistance after closing.

What Issues Are Addressed When a Client Hires Our Waterfront Property Law Team To Perform a Due Diligence Investigation?

In all of these cases, our waterfront property law attorneys examine the chain of title to determine the following:

(i) Is the adjacent bottomland privately owned or is it state-owned bottom (this article and this second article explain why this matters)?;

(ii) If there are waterfront improvements in place (typically a dock or a bulkhead), were those improvements appropriately permitted?;

(iii) Are the riparian property rights intact at the property?;

(iv) Does the conveyance include upland that reaches fully to the mean low water mark?; and,

(v) Does either of the immediate neighbors on each side of the property have an application pending for installation of a waterfront improvement of any type?  At the conclusion of our investigation, we furnish a written report to our client addressing each of these issues.    

Shutterstock: Volodymyr Tverdok

Conclusion

The attorneys on our Waterfront Property Law Team have strong connections and significant legal experience.  As you can tell from the time a few years ago when one of our attorneys stripped off his shoes and got in the water to fend off a criminal enforcement action being filed against our client, we go the extra mile for our clients, if that is what is needed to get the job done.    

Contact Jim Lang if you would like to see him publish more information on the law of caveat emptor. Of course, you can always contact Jim for his advice and assistance in connection with needs specific to your particular situation.