Tax Sales – Buyer Be Ware

Looking at the possibility of purchasing property at a tax auction. Pretty scary as it doesn’t have the safety net of most real estate purchases. But I’ll probably purchase something at a tax auction this year, just so I can say I’ve done it.

So far I’ve learned a few things. It appears to me that some counties rely heavily on tax auctions to generate revenue and that county administrators take advantage of people who own vacant land in their county and reside elsewhere.

For example, we own a parcel in the boondocks of Alameda county. It’s an almost useless 20-acre parcel with access issues. The Livermore school district passed a parcel tax and now we pay more money to the Livermore schools than we pay in property tax on the parcel. There is no way to avoid the school bond assessment and this parcel will never contribute to any school use.

I have discovered hospital bonds in one county where parcel owners are charged an assessment of about $100 each year. This is an assessment for services from which out of area owners receive no benefit. Parcels I’ve checked out have little or no value. It appears that some people will purchase these lots on pure speculation for about $1,000 on the open market.

In these cases, since the land is vacant and many of the owners live outside the county, the practice of allowing a government agency to recirculate these lots at auction is at  least unethical and designed to trap unwitting buyers. If it’s not illegal, it should be.

Many of the parcels similar to the one above, were created by massive subdivisions that took place during the middle of the 20th Century when speculators divided up large ranches in a real estate frenzy. This took place when subdivision laws like the California Subdivision Map Act were being implemented.

Many of the resulting parcels are useless, but unknowing people continue to purchase them speculating that a market will some day develop.

I’ve found other things going on that I’ve never seen before and so far I’ve not figured them out, but I probably will.

Title insurance is not available to buyers in tax auctions, but one can obtain helpful information from a title insurance company. Or, one can search the records at the county recorders office. Neither of these options is fool proof.

It is amazing to me that county governments are tolerating or facilitating this behavior in the modern world. Buyer be ware.

Thoughts on how California Subdivisions have Impacted Wildlife Habitat

Subdivisions of real estate can protect or limit habitat. If they set boundaries that conform to natural barriers which separate human activity from wildlife, they can be helpful. If they subdivide large tracts of wildlife habitat so that it can never again function as habitat, they are a problem, even if nobody lives there.

During my 37 year career as a real estate broker, I was often unhappy with the California Subdivision Map Act (SMA).

The SMA creates the basis for many limitations of property use and restricts property rights. For a real estate broker, these restrictions are at least annoying and often impact property value.

This Act was created in 1937. If you’re interested in more history, you can find it easily by searching on the net. It is a very complicated topic. But for now, I’m looking at the SMA and where it stands today.

One of the unintended results of  the implementation of the SMA was to create an avalanche of subdivisions of rural ranches in the mid 1900’s. Once faced with dwindling opportunity to create new rural parcels, developers rampaged through counties with wide open and relatively inexpensive land and created large subdivisions which created small parcels where large tracts of land had previously existed.

Much of this type of subdivision activity was done in anticipation of real estate shortages and projected upward values – land speculation.

The subdivisions were relatively inexpensive to create from a land survey and map filing perspective. Between 1940 and 1970 many small (often as small as one acre) rural parcels were approved in areas where the demand never came close to fully absorbing the supply. Many lots created over 50 years ago remain vacant. Many without power, water or sewer.

At worst, these subdivisions have created land no longer of use to anybody or any thing – not even wildlife. The SMA is an example of a well-intended attempt to protect the public from unscrupulous developers and unplanned development, but there have been many unintended consequences and many of them continue to impact wildlife negatively.

Wildlife corridors are impeded by these sprawling and failing subdivisions. Winter range is impacted negatively and habitat is unnecessarily declining.

Modoc County, on California’s northern border may be the county most negatively impacted by sprawling subdivisions that are mostly vacant, tax sales are common and homes often fall into foreclosure.

IMG_3729 Pit River Subdivision

This is a photograph of a subdivision in Modoc County. It has been in place for over 50 years, yet it has no buildings, no paved roads, no water development, power or other utilities. The road is deteriorating. Because of diverse ownership, resolution of these issues is highly unlikely.

 

Hunter’s Inventory

Early summer is a great time for taking stalk of the annual wildlife production, especially if you’re a hunter.

A hunter can’t help but notice the young of the year that begin to expose themselves during late spring and early summer.

While flocks of larks, blackbirds and magpies are noteworthy, it’s the game species that catch the hunter’s eye and so it was this weekend as we focused on hunting at the ranch.

Our primary thoughts were centered on preparing for our August archery mule deer hunt – A4. Knowing that we need to prepare, we decided to spend the weekend hunting for our ranches limited population of pigs while also setting up targets and honing our shooting skill.

This morning we set out early in search of the dozen or so pigs that live on our 2,000 acre ranch, knowing that we might catch them out in the open grassland when they are easy to spot.

IMG_3255 ducklings

Signs of a good mallard hatch have been abundant.

The pigs were elusive, but at the second pond we checked, my brother, Rob, couldn’t help but notice that a mallard hen and its brood of four ducklings were huddled up on the pond’s dam, a good sign that four young of the year had survived long enough to create a sense of optimism about their chances of reaching maturity.

We recalled that last year a hen mallard (maybe the same one) on that same pond had lost its entire brood.

We moved on searching for the pigs, but they were not cooperating. We couldn’t help but notice that deer numbers were dismal. The drought of 2014/15 had a drastic impact upon the number of deer on our ranch and we covered three-quarters of the ranch without seeing a single deer. Finally a lone yearling doe stuck it’s head up out of the annual grasses.

On the other hand, flocks of quail were diving into the brush everywhere we went, especially when we drove through a 200 acres brush patch that provides the most security for quail. I’m sure we saw several hundred quail, in every size and shape. Prospects for quail season hit the roof.

Valley quail

Prospects for quail in 2017 are excellent.

In general, game birds seemed to be doing well. Quail and dove especially, but we also came upon a group of five gobblers that were following a hen around. Seems a little late, but they didn’t want to give up. One of the five toms had a beard that looked to be eleven inches long and was quite thick.

Although we didn’t find the pigs, we think they are around the area somewhere. In the meantime we filled our archery targets full of holes,  set back the local ground squirrel population and I managed to get started on sighting in the rifle that I intend to use on a late-season mule deer hunt next fall.

We also avoided an impending disaster when Rob opened up the Kawasaki Mule and discovered that rats had built a nest inside and nearly destroyed the wiring that controls virtually everything. It was also a fire hazard in the making.

We also confirmed our date for scouting the X2 zone, enjoyed a few cocktails and barbecued some of last season’s venison.

The big disappointment was seeing no bucks, but that was somewhat offset by the fact that the does appear to have multiple fawns. Maybe the predator population is down as well and if so we will have deer again in a few years.

DSC_0077[1] doe and fawns

 

 

 

 

 

 

 

 

Access Issues – Permission

The best way build and understanding of something is to work with it for a long while. Being involved in an access dispute for the last three years has been an eye opener.

That doesn’t make me an attorney, but here’s the way it looks to my unprofessional eye.

Until the gate on one of our access routes was locked, we believed we had a right of access. However, there’s a big difference between believing in access rights and documenting them.

When we realized that the owner of the property under our access road disputed our rights, we learned that their reasoning was that they had given us permission to pass and by doing so they had eliminated any rights we had to an easement by use.

Our response to their claim was that previous owners of our property (in easement terms called the dominant tenement),  had established access rights five years before the current owners of the property providing the access  had purchased the property (in easement terms called the servient tenement) beneath our right-of-way easement. Therefore the current owners could not have given us permission until well after our easement was established. As with most disputes, we will negotiate an agreement somewhere in the middle  ground, but we will have documented access rights.

The lesson is that you may not want permission to use a road. Permission can get you in trouble, because it is revocable. And, if somebody uses a road across your property, one of the simplest solutions may be to give them qualified permission. If they accept your offer of permission, they have severely damaged any case they may have for a legal right.

Access is one of the most critical issues related to ranch ownership and the laws are complex. Get sound advise from a good attorney.

The First Right of Refusal

About 35 years ago, my brother and I were looking for a ranch. We had little money, but lots of time and energy.

We heard about a property we might be able to buy at an affordable price. It was listed for sale with a real estate broker with whom I was acquainted. He explained the situation like this.

Two brothers, Frankie and Al, had owned a ranch for many years. They had purchased it primarily as a hunting club. One of the brothers ran the business affairs and the other had made a hobby of making physical improvements like dams and roads. Over time they purchased additional property and the ranch grew to over 1,000 acres. In addition, it was adjacent to two land-locked sections of BLM ground – giving them almost 2,000 acres on which to hunt. The had it almost to themselves.

They had also built a very nice home on the property and they invited family members to hunt. Some of their guests actually paid a fee which allowed them unaccompanied access to the ranch.

Over the years, the brothers agreed that in their old age, they would sell the ranch if they needed money for retirement. Little did they know that Albert would drop dead from a heart attack at about the age of 50. Al was married and his portion of the ranch went to his wife. Having no other means to support herself, Albert’s wife asked Frank to purchase her interest in the property, or (at least) allow her to sell her half.

Although Frank did not agree to purchase her half, he did agree to letting her subdivide and sell subject to Frank having a first right of refusal to purchase.

Their agreement included a division of half the ranch into five 120 acre parcels. The parcels were put on the market for about $100,000 each with seller financing. As offers came in, Frank had the right to either match the offer or let Albert’s wife sell to the buyer.

The price was acceptable, but nobody wanted to be the guinea pig for Frank. It became clear to us that the agent and Albert’s wife were frustrated by their inability to obtain a viable offer.

My agreement with the seller’s agent was that we would split a 10% commission, but I couldn’t see making an offer just to watch Frank take the opportunity away from us. The $100,000 price was a little too rich for Rob and I to handle on our own, so we found a partner who would become  co-owner if the deal came together.

Then I got an idea that made a lot of sense. If the seller wanted to get the property sold, she might need to pay a higher commission. If she were willing to pay 20% and the selling agent was willing to accept 5%, we could pay me 15% even if Frank purchased the property. That would fund a pay out of 5% to me and each of my partners. Once I proposed this idea, my partners were a go. If Frank acted on the first right, we would each be compensated for our efforts.

The seller’s agent and the seller were fine with idea. At this point we made our $100,000 offer and waited to hear from Frank. He acted upon the first right.

There were  four remaining parcels available and we still didn’t know exactly what to expect from Frank, so we made an offer that would repeat itself on each of the remaining parcels with a commission being paid to me (and indirectly my partners) each time Frank acted.

Frank not only exercised his first right, but he became so annoyed that he outright purchased the remainder of the ranch. I received a commission of 15% on all five parcels. My partners and I were disappointed that we couldn’t own the property, but we were compensated for our disappointment.

Some significant information can be gleaned from this story. First of all, it is clear that a first right of refusal has a negative impact on one’s ability to sell property. And, it is clear that the first right decreases the value of the property – in this case about ten percent. In my opinion the actual decrease in value was even higher than that.

Unfounded Fears, New ATV

For about a week Rob and I had been discussing the ranch. Out of reach during the week’s storms, we could only wait for a break in the weather and a couple days of drying before heading out to determine damage.

In the meantime, we decided it was time to purchase a new ranch vehicle. Having lost one of our ATV’s to engine failure and needing a two seater, it was decision time.

After years of debate, we concluded it was time to purchase a Yamaha Rhino. We looked at other side by sides, but the Rhino won the contest and after riding around for a day I’m convinced we made a good choice.

The Rhino had plenty of power, good breaks and compression for slowing on hills.

We barely had the Rhino out of the trailer when a group of jakes stopped by.

The break in the weather was welcome by all.

A creek crossing along the way, could have created a real issue, but wisely we loaded the Rhino back into the truck trailer before crossing. The water was deep and would have turned our vehicle from an ATV to an AWV and sunk.

That was the biggest obstacle. We checked ponds and roads for a couple hours and were amazed that more damage had not occured.

The ponds we checked were full and looking good.

Our biggest fear was that the roaring water had wiped out one or more of our culverts or caused a big slide making the road impassible.

We were relieved to find the road in good shape.

Deer were out in good numbers.

About a dozen deer fed on the ridge.

We also found the skull of one more good buck that met up with a lion.

Rob found this skull in the canyon.

All in all it was a good day at the ranch. Hopefully we’re over the worst weather and we’ll have nothing but spring showers from here on out.

Locked Out – The Battle for LaCosta Ridge

Accessing property via a road that has no deeded rights is common. In the hills around Livermore, very few of the landowners have right-of-ways that have been validated by an official grant of easement.

On the other hand, very few of these access roads are disputed. The land seldom changes hands, so the owners are known to other landowners along the route. Good neighbor policy is to leave reasonable people alone and not create a Hatfield’s and McCoy situation.

In our case, most of the property along our access road is owned by the City and County of San Francisco. This is a situation with both good and bad implications.

We do however, have a portion of our road that passes through a privately owned piece and this has become a problem. Recently the owners of this small parcel have decided that we do not have the right to pass and locked the gate. Doing what we could to make it clear that we believe the route is our legal access, we enforced our rights by cutting the chain (we used our giant master key, the bolt cutter) and placed our own lock on the gate.  The property owner promptly removed our lock, and thus the battle of LaCosta Ridge. (Juan LaCosta was one of the early landowners in the area.)

When seeking to have the owners sign a grant deed that could be recorded to validate our rights, we were told they could not do that as they were planning to sell their piece and the purchasers were not interested in buying if a right-of-way existed. Thus we sued to establish our right.

For the early years of my life, I dreaded law suits and therefore avoided legal action at almost all cost. Now, after having courtroom experience, I’ve concluded that when you believe you’re right, court is a good place and having concluded that we’re right, it looks like that’s where we’re headed.

This battle of LaCosta Ridge has motivated me to learn about the history of the road and it’s very interesting. The earliest inhabitants were Ohlone Indians. They gave way to Spanish Missionaries in the late eighteenth century. The area down stream of our ranch became known as Rancho El Valle de San Jose and a Spanish Mexican land grant turned most of the bottom land over to the Bernal family – soon to become also known as the Sunols (by marriage). Thus leading to the name for the railroad town at the head of Niles Canyon – Sunol.

When California became a state, there was some debate about the validity of their Land Grant ownership, so a land commission was formed to validate the Spanish Mexican land grants and validate they did. Shortly thereafter the upstream area, now best described by the Public Property Survey System, was surveyed with the intent by the U.S. Government of selling. The Township in which our ranch is located is Tier 4 South, Range 2 East, Mount Diablo Base and Meridian. And, the parcels within this township were created by surveys that took place about the time of the Civil War.

Not long after the Civil War, the properties of this township were sold and the land transfers took place by U.S. Land Patents. In most cases the Homestead Act.

During this time, the homesteaders utilized the land by grazing cattle, sheep and horses.

Learning about the history of our ranch has been enjoyable, but it also makes us realize that there were many before us. The first recorded documents related to road access to the area occurred in 1882 when a group of about twenty people petitioned the County of Alameda to make the access road a County Road, which they did. But the County Road was abandoned in 1922.

One thing we’ve learned while preparing for this law suit is that right-of-way law is very complex. Fortunately for us, it looks like the story of our rights is simple.