Vacant land can offer buyers opportunities to build a home, develop an investment property or hold land for future use. However, an attractive purchase price does not necessarily mean a parcel is suitable for the buyer’s plans.
Access restrictions, water availability, septic limitations and separately owned mineral rights can significantly affect whether land can be developed, financed or resold. Real estate professionals working with vacant land should help clients identify these concerns early and encourage them to consult qualified legal, title, survey and land-use professionals.
Why Vacant Land Transactions Require Additional Due Diligence
A vacant parcel may look buildable even when legal or physical restrictions prevent development. Unlike an existing home, vacant land may not have established access, utilities, water service, sewage disposal or clearly documented development rights.
Before moving forward with a purchase, buyers should investigate:
- Legal access to the property
- Recorded and unrecorded easements
- Zoning and land-use restrictions
- Availability of public water and sewer service
- Well permits and groundwater availability
- Soil suitability for a septic system
- Ownership of mineral, oil and gas rights
- Environmental, floodplain and wetlands restrictions
- Survey, boundary and title issues
Real estate professionals should avoid making legal conclusions about these matters. Instead, they can help clients recognize potential concerns, include appropriate investigation periods in the contract and recommend qualified professionals.
Easements and Legal Access to Vacant Land
An easement gives a person, company or government entity the right to use another person’s land for a limited purpose while ownership remains with the property owner. Easements may affect where a buyer can build, install fencing, construct a driveway or otherwise use the property.
A title search and current land survey may reveal recorded easements, but buyers should also investigate visible roads, utility lines, paths and evidence that neighboring owners regularly cross the property.
Utility Easements
Utility easements allow utility providers to access designated portions of a property to install, inspect, repair or maintain infrastructure such as:
- Electrical lines
- Water and sewer pipes
- Gas lines
- Telecommunications equipment
- Drainage systems
A utility easement does not necessarily prevent development, but it can restrict where structures, fences, pools, landscaping or other improvements may be placed.
Real estate professionals should encourage buyers to review the easement’s location and terms instead of relying only on a general reference in a title report.
Access and Right-of-Way Easements
An access easement or right-of-way may allow a property owner to cross another parcel to reach a public road. This is particularly important when a vacant lot does not directly connect to a publicly maintained road.
Questions buyers should investigate include:
- Is access legally documented and recorded?
- Is the access wide enough for the buyer’s intended use?
- Can emergency vehicles and construction equipment reach the property?
- Who is responsible for maintaining the road?
- Does the easement allow utility installation?
- Is the road privately or publicly maintained?
- Can access be limited by gates or seasonal conditions?
Physical access is not necessarily the same as legal access. A visible dirt road leading to a property does not prove that the buyer has a permanent right to use it.
Easements by Necessity
An easement by necessity may arise when a property becomes landlocked after a larger parcel is divided. The doctrine generally depends on factors such as prior common ownership and whether access is necessary to use the property. Requirements vary by state.
Buyers should not assume a court will automatically grant access to a landlocked parcel. Establishing an easement can require legal action, create delays and generate substantial expenses.
Permission, Licenses and Prescriptive Easements
A neighbor may have informally allowed someone to use a driveway, trail or road for many years. That arrangement may be a revocable license rather than a permanent easement.
In other circumstances, long-term use without permission could support a claim for a prescriptive easement. A prescriptive easement generally involves open, continuous and adverse use for a period established under state law.
Real estate professionals should not characterize long-standing use as a legal easement unless documentation or qualified legal advice supports that conclusion.
Water Rights and Water Availability
Water rights determine who may use water, how much may be used and for what purpose. The rules can differ significantly by state and may depend on whether the water comes from a river, lake, spring, aquifer, well or public water system.
Groundwater laws are not uniform throughout the United States. Different states apply different legal doctrines and permitting requirements, particularly between wetter Eastern states and more arid Western states.
A parcel’s proximity to water does not necessarily give the owner the legal right to use that water.
Questions Buyers Should Ask About Water
Before purchasing vacant land, buyers should determine:
- Is public water service available?
- What will it cost to connect to the system?
- Are connection permits or capacity fees required?
- Does the property have an existing well?
- Is the well properly permitted?
- Are the well rights transferable?
- Is groundwater available at a practical depth?
- Have nearby wells experienced shortages or contamination?
- Are water rights included in the sale?
- Are there restrictions on household, agricultural or commercial water use?
A well inspection, water-quality test or groundwater study may be appropriate depending on the property and its intended use.
Water Rights Are Different From Water Availability
Even when a buyer has a legal right to drill or operate a well, the property may not have a sufficient or reliable water supply. Water quantity, quality and availability can change based on aquifer conditions, drought, nearby development and regulatory restrictions.
The U.S. Geological Survey provides groundwater, streamflow, water-quality and water-availability information, but buyers generally need local data and qualified professionals to evaluate a specific parcel.
Real estate professionals should avoid promising that a well can be installed or that a particular water supply will be sufficient.
Septic Systems, Soil Conditions and Percolation Tests
A property without public sewer service may require an onsite septic system. Whether one can be installed depends on local regulations, lot size, soil characteristics, groundwater levels, setbacks and the proposed structure.
A percolation test, commonly called a perc test, evaluates how water moves through the soil. However, local authorities may require a broader soil or site evaluation rather than relying solely on a traditional perc test.
The Environmental Protection Agency notes that septic systems are typically permitted and inspected by local health or environmental authorities. Property records may contain permits, soil information and system plans.
A Failed Septic Evaluation Can Limit Development
If a parcel cannot support a conventional septic system, the buyer may need an engineered or alternative system. These systems can be more expensive and may require additional maintenance or monitoring.
In some situations, no approved wastewater solution may be available. That could prevent the buyer from constructing a residence or using the property as intended.
Buyers should confirm:
- Whether sewer service is available
- Whether a previous septic permit exists
- Whether the permit is still valid
- Whether the approved system supports the planned number of bedrooms
- Whether an alternative system would be required
- The estimated installation and maintenance costs
- Whether easements are needed for septic components or access
- Whether setbacks restrict the building area
A successful perc test does not guarantee that every proposed home or building plan will be approved.
Mineral Rights and Split-Estate Ownership
Mineral rights involve ownership of resources beneath the surface, which may include oil, natural gas, coal, metals, sand, gravel or other materials depending on state law and the property documents.
Buying the surface of a property does not always include ownership of the minerals below it. Mineral rights may have been reserved, sold or leased by a previous owner.
When surface rights and mineral rights are owned by different parties, the property is commonly described as a split estate. The Bureau of Land Management notes that privately owned surface land may be located above minerals owned by the federal government or another party.
How Mineral Rights Can Affect a Buyer
Separately owned mineral rights may affect:
- Future drilling or extraction activity
- Surface access
- Roads and equipment placement
- Noise, traffic and environmental conditions
- Agricultural or residential use
- Property value and marketability
- Financing and insurance
- The buyer’s ability to excavate or remove materials
The extent of a mineral owner’s rights depends on the deed, mineral reservations, leases and applicable state law. In some split-estate situations, mineral rights may take precedence over certain surface rights.
Mineral Rights Questions to Investigate
Buyers should consider asking:
- Are mineral rights included in the sale?
- Have any rights been reserved by a previous owner?
- Are there active mineral leases?
- Does another party have surface-access rights?
- Are royalties included or excluded?
- Has exploration or extraction previously occurred?
- Are federal or state-owned minerals involved?
- Could mineral activity interfere with the planned use?
A standard title report may not provide a complete assessment of mineral ownership. In areas with significant oil, gas or mining activity, buyers may need a specialized mineral title examination or legal opinion.
How Real Estate Professionals Can Reduce Vacant Land Transaction Risks
Real estate professionals play an important role in helping clients identify issues that require further investigation. However, agents and brokers should remain within the scope of their licenses and avoid providing legal, engineering, environmental or land-use opinions.
Use Detailed Property Descriptions
Marketing materials should accurately describe known property characteristics. Avoid unsupported terms such as:
- Buildable
- Ready to develop
- Utilities available
- Well permitted
- Septic approved
- Unrestricted
- Subdividable
- Guaranteed access
These statements can create risk when they are not supported by current documentation.
A safer description might state that a previous septic evaluation or well record is available while directing buyers to independently confirm whether it remains valid for their intended use.
Encourage Independent Verification
Depending on the parcel, buyers may need assistance from:
- Real estate attorneys
- Title professionals
- Licensed surveyors
- Civil or geotechnical engineers
- Well and septic specialists
- Environmental consultants
- Mineral-rights attorneys or landmen
- Local planning and zoning officials
- Utility providers
- Lenders experienced with vacant land
Recommendations should be documented in writing.
Allow Enough Time for Due Diligence
Vacant land investigations may take longer than residential home inspections. Buyers may need time to obtain surveys, soil evaluations, well estimates, zoning determinations, driveway permits or legal reviews.
The purchase agreement should address appropriate investigation periods, access for testing and the buyer’s ability to terminate or renegotiate based on the results. Real estate professionals should use state-approved forms when available and consult their broker or legal counsel when unusual conditions arise.
Document Material Information
Agents should document:
- Information provided by the seller
- Records delivered to the buyer
- Recommendations for professional inspections
- Questions referred to attorneys or specialists
- Known access or utility concerns
- The buyer’s decisions regarding further investigation
Clear documentation can help reduce misunderstandings and demonstrate that clients were encouraged to complete appropriate due diligence.
Vacant Land Due Diligence Checklist
Before completing a vacant land purchase, buyers should consider verifying:
- Legal and physical access
- Property boundaries and acreage
- Recorded easements and rights-of-way
- Zoning and permitted uses
- Building setbacks and lot coverage requirements
- Subdivision restrictions
- Public water and sewer availability
- Well permits, capacity and water quality
- Septic feasibility and soil conditions
- Utility connection costs
- Mineral, oil and gas ownership
- Floodplain and wetlands status
- Environmental conditions
- Road maintenance obligations
- Development fees and permit requirements
- Financing and insurance availability
- Property taxes and special assessments
- Covenants, conditions and restrictions
- Agricultural or conservation restrictions
- Whether the parcel supports the buyer’s specific plans
Vacant Land Can Offer Opportunity, but Assumptions Create Risk
Vacant land transactions require more than confirming the price, acreage and location. Easements, legal access, water availability, septic feasibility and mineral ownership can determine whether a parcel supports the buyer’s intended use.
Real estate professionals can help protect their clients and reduce transaction risk by identifying issues early, communicating carefully, documenting recommendations and encouraging independent professional review.
The most important question is not simply whether the buyer can purchase the land. It is whether the buyer can legally and practically use the land as intended.
This article is intended for general informational purposes and is not legal, engineering, environmental or land-use advice. Laws and requirements vary by state and locality. Real estate professionals and their clients should consult qualified professionals regarding specific properties and transactions. Written by CRES professional, Katonya Madison.
Sources
- Cornell Law School Legal Information Institute, “Easement,” “Prescriptive Easement,” “Implied Easement by Necessity” and “Landlocked.”
- U.S. Environmental Protection Agency, septic system information, regulations and frequently asked questions.
- U.S. Geological Survey, groundwater, water availability and water-rights resources.
- U.S. Bureau of Land Management, split-estate and mineral-rights resources.
