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Building Principles: Movin’ Right Along . . .
Whether the current program has your camp bursting at the seams and you're considering expanding, or you're ready to look for another property to host your organization, there comes a time when you find yourself in the real estate market. Buying or selling, there are a lot of things to think about and consider as you make this huge change. This month, we're going to look at just some of the issues and items to help you begin to unravel this often complicated process.
In past columns, I've repeated the benefits of investing in a boundary survey of your property. More than just delineating where your property starts and your neighbors' begins, it serves as a graphic representation of what the owner is responsible to control. I've been told lots of reasons why it wasn't necessary. Here are just a few . . .
- "We know where our corners and the boundaries are. We've been here for fifty years!"
- "I know how much land I have. I pay the tax bill every year!"
- And maybe the most interesting of all: "Our neighbors will think that we don't trust them!"
Having a legally binding document that shows the parcel, lot, or tract under consideration in detail can make all the difference in the world to a potential buyer. We have never recommended, and often specifically discouraged, buyers from making a binding offer on a property for which there was no valid survey and sealed map available. Most organizations and owners don't foresee the transfer of their property, but it happens pretty suddenly all the time, and to have established the boundary on paper and in the field allows buyers to quickly get a solid sense of what they're considering for purchase. We tell buyers to make their offer contingent upon a clear title with a sealed boundary survey map and flagged perimeter. If the survey's already done, then the transfer can go ahead very quickly. If not, well, it could be months and months before it's complete, and the buyer may have moved on to another property. So why not put it "in the can" and have it ready and available when the very first offer comes along?
With the boundary flagged in the field, buyers and sellers can walk the perimeter and make note of how the neighbors' properties may affect or be affected by camp programs. For example, if there's a relatively new development abutting the western property line, there may be a history of angry telephone calls about the camp loudspeaker system from neighbors. Conversely, if there's a dairy farm along the eastern property line, the loudspeakers may not be a problem at all. But for campers, the odor after evening milking may be. Perhaps a vegetated buffer is present, or one might be helpful, but how might a buyer know about these things without walking the boundary? And how could the boundary be examined if a surveyor hasn't established it? You see, it all ties together!
Many camps have and use buildings that are decades (sometimes over a century!) old and predate modern codes, and they've served the programs well for years and years. But a new owner may not be able to assume the same risks with those old buildings without some sort of assurance. Just like purchasing a home, a reputable, licensed building inspector can assess their condition and provide a report that describes the overall condition of each structure and its serviceability. Many sellers are reluctant to allow this sort of inspection as part of the purchase process, and in a private, all-cash transaction, there is no authority that requires it. But when there is any sort of financial agent, a detailed inspection is nearly certain. Further, the new owner will need to insure the structures on the property, and the broker/agent will want some assurance that the property is safe and healthy to occupy.
Again, the simplest way to avoid delay is for the seller to have this work done in advance, addressing any concerns before they are "found" during the inspection. Allowing the buyer to access the report — and the verification that the shortcomings have been addressed — will build good will and help the seller maintain the asking price. So even if the buyer or funder chooses to engage his or her own inspector, the likelihood of deal-breaking surprises drops to almost nothing. It's like going to your own doctor and getting healthy BEFORE you go to buy life insurance and get THEIR physical. On a similar note, have copies of all of the building permits and inspections for work that has been done over the years. After all, it's hard to insist credibly that the camp's been "kept up and made modern," if there aren't any permits on file at the local office. Those should be available in a binder for anyone and everyone to see upon request. And if you haven't done it already, scan all of them and electronically file them away somewhere safe. This is the 21st century, computers are everyday items, and being able to provide the copy of a permit at a moment's notice is almost expected as routine.
Infrastructure and Operations
There are systems that support camp and its community of staff and guests. Those include water supply, sewage disposal, and electricity. Whatever the level of self-sufficiency, a camp should have at its fingertips the records that document how the facility has operated and what regulators have had to say about it. Take, for example, the property water supply. Whether the camp purchases water from the local system or draws on its own wells, there is (or should be) paperwork to document it. In the case of the local system purchase, the documentation should include the amount of water that's been used and what the bill was.
Often issued quarterly and viewed over the course of five or ten years, these can suggest trends of filling (proportional increase that matches reported increased occupancy over time), or even deterioration of the water distribution system (large increases from year to year without a matching increase in occupancy). Where the camp supplies its own potable water, the reports from the health department sanitarian and the testing laboratory should be a great bellwether on the cleanliness and operation of a safe water supply. If there aren't any such records at camp (which should be in the binder and e-files mentioned previously), then buyers should make it a point to have a lab collect and analyze samples for potability. They should be reporting on more than the presence of bacteria, but for mineral content, pH, and hardness, because all of these may affect how long water-based systems (like boilers, heaters, and kitchen appliances) last. It's worth mentioning to all potential buyers reading this that if the owner is drinking bottled water, you should make it a point to drink some from the tap yourself.
Since we've mentioned water supply, it would be a shame to omit sewage disposal. It is amazing how many owners/managers of camp property simply have no idea where their drain fields are. When asking about septic systems, buyers should never, ever accept an answer that sounds anything like, "Well, it's out there, [waves arm in broad sweeping motion] somewhere." This is yet another area that an owner should be managing as part of the regular operation and maintenance of the site. Unfortunately, many would rather not think about it as long as it's "not a problem." We contend that not knowing where the systems are IS a problem — and a large problem at that, because there's no way to avoid damaging them when doing things as innocent as erecting a new chain link fence around the ball field. Without question, documentation for these should appear with the other items in the aforementioned binder, e-file, and survey map. The very same set of ideas applies to electricity, propane lines, and any other implied but buried system that supports camp.
Finally, there are other rules that we've considered in this column before, and those pertain to the local government's land-use and zoning regulations. It may well be that there are directives that are intended to guide development in the town's jurisdiction to support or prohibit activities or development the camp community takes for granted. Existing owners may have "grandfather" provisions which allow them to continue to do things that are no longer permitted and might not transfer with the land. This could mean, for example, that the buyer is prohibited from lighting open fires (like campfires) or using that loudspeaker system. "We've done it for years" should never be the end of the discussion. It falls to the buyer to investigate whether the land is suitable for his purposes. This must happen during the "due diligence period," after the offer is made but before the property transfers at closing. This is the buyer's opportunity to research the details of the situation thoroughly and make as certain as possible that he or she knows exactly what's being purchased and that it can be used as intended.
Here's a great, real-life example from right near my home: An out-of-towner came across a commercial property being sold at a sheriff 's auction for delinquent taxes. For just the value of the backtaxes, he was now the proud owner of a gold mine in the making. The building had been a general store for many years along a very busy road that leads directly into a federal park of seventy-some thousand acres. He planned to open it again and provide all the provisions that park guests would need, from camping gear to fishing tackle to hunting supplies. It couldn't miss, and he was going to be a kazillionaire! He skipped the due diligence step, however, and didn't discover that there was no parking available. Literally, none. It turned out that what appeared to be the parking lot for the building was actually owned by the government and was reserved exclusively for fishermen. Had he gotten a survey, visited the county tax office, or spoken with the township officials, he'd have known why the property had been vacant. As of this writing, that building is for sale again, only the "old-new" buyer is hoping for a "new-new" buyer to repeat his mistake. P.T. Barnum is reported to have said that there's a sucker born every minute, and perhaps he'll be proven right again.
When considering the transfer of real estate, information is king. Sellers should plan ahead and look at their own property as if they were going to buy it, asking and answering the hard questions before those issues arise when an offer is on the table. Buyers should be prepared to ask those hard questions and get solid answers before affixing their hopes and dreams and committing their savings or future earnings.
Rick Stryker is a professional engineer with a particular passion for helping camps with infrastructure, planning, and regulatory issues. He can always be reached at email@example.com or 570.828.4004.