Just because there is no house or structure to worry about, vacant lots can still have title issues. Liens, title disputes, clerical errors, fraud, and boundary disputes are all possibilities when you purchase a plot of vacant land. In addition to title insurance, an updated land survey is a necessary step that can clear up any of these unforeseen issues.
If you’re planning to build on the land, it’s important to know about any encroachments, easements, or boundary disputes beforehand. Easements are legal provisions that allow others to access or use part of your land. Most properties have utility easements, which permit municipalities or utility companies to access areas for services like electricity, water, sewer, phone, or internet. Boundary disputes encompass disagreements over property lines, fencing, landscaping, and access. It’s essential to identify any boundary issues early, especially if you plan to start construction later.
Financial Issues with Vacant Land
Vacant land may also come with hidden financial issues, such as liens placed on the property due to unpaid taxes or debts owed to contractors by previous owners. According to a 2023 article from the University of Chicago Business Law Review, the city of Chicago owned over 10,000 vacant lots with another 16,634 pending city ownership due to back taxes and unpaid fees.
In addition to falling behind on property taxes, vacant land can accrue fees when the property owner falls behind on maintenance. In Chicago, the city can collect daily fines for properties that don’t meet maintenance requirements, and these fines can eventually result in a lien on the property. Resolving these kinds of issues can be incredibly expensive and complicated, which is why it’s important to know about them before going through with a purchase.
Title Insurance Offers Peace of Mind and Marketable Title
Regardless of whether you plan to build on the property, title insurance will offer peace of mind and help you protect your investment. If you’re purchasing land as an investment property and plan to resell it down the road, title insurance also ensures that you have a marketable title and your future sale will go through without issue.
Purchasing property comes with so many moving parts — thankfully, you don’t have to tackle it on your own. A knowledgeable, experienced professional like the ones at Landrust Title will make sure that there are no clouds or defects on your property. If you have questions about a vacant land purchase, Landtrust Title is here to offer expert advice and professional guidance. Reach out to us today!