Agricultural and Development Land Issues: A Magical Tour


 Debbi Conrad  |    June 10, 2019
Agricultural and Development Land Issues

Today we are taking a magic carpet ride around the state of Wisconsin to see some of the property conditions those in residential practice might not ordinarily encounter. Imagine seeing it, and take a mental photograph or video, as we look at what the consequences might be for real estate purchasers or developers.

These property condition visions are pulled from the Vacant Land Disclosure Report (VLDR). These conditions may be situations the seller should consider disclosing. The pertinent VLDR question follows each stop along our tour of Wisconsin.

Conservation reserve program

As we travel into farm country and see farm fields, or perhaps when we spot hunting acreage for sale, consider that this property might be Conservation Reserve Program land.

The United States Department of Agriculture (USDA) Farm Service Agency‚Äôs (FSA) Conservation Reserve Program (CRP) is a voluntary program that contracts with agricultural producers so that environmentally sensitive agricultural land is not farmed or ranched. Instead, participants establish long-term, resource-conserving plant species, such as approved grasses or trees, known as ‚Äúcovers,‚ÄĚ to control soil erosion, improve water quality and develop wildlife habitat. In return, FSA provides participants with rental payments and cost-share assistance. The contract duration is between 10 and 15 years.

If the property owner sells the farm or hunting parcel or some portion thereof enrolled in the CRP, often the buyer is given the opportunity to assume contract. If the new owner does not succeed to the contract, the seller must pay back to the government all annual cost-share as well as any incentive payments received, plus interest, and may have to pay liquidated damages computed as 25 percent of one year‚Äôs payment to reimburse the government‚Äôs administrative costs. In 2017, the USDA began offering the opportunity for certain CRP contract holders to ‚Äúopt out‚ÄĚ early from the CRP contract in order to transfer land. However, only some CRP land is eligible.¬†

See the USDA Farm Service Agency’s Conservation Reserve Program video and information at www.fsa.usda.gov/programs-and-services/conservation-programs/conservation-reserve-program/index and www.fsa.usda.gov/Assets/USDA-FSA-Public/usdafiles/FactSheets/archived-fact-sheets/consv_reserve_program.pdf.

VLDR Question E12. Is all or part of the property subject to, enrolled in, or in violation of the Forest Crop Law, Managed Forest Law, the Conservation Reserve Program, or a comparable program?

Orchards and pesticides: lead and arsenic contamination 

As we are flying about, we may see lovely orchards on properties and not be aware that a danger may be present. From the 1890s to the 1960s, certain pesticides used in fruit orchards contained lead and arsenic. Lead arsenate was a popular insecticide used for moth control in commercial orchards, and in smaller but still substantial amounts in home gardens and orchards for mosquito control. These compounds do not break down and are not very mobile, so they still may be found in the soil today and pose health risks, particularly for children. 

Unless an orchard remains or there are fruit trees to be seen, it may be difficult to know if a property was used as an orchard. Historic aerial photographs may be helpful and may be available from the county Land Conservation Department, also called the Soil and Water Conservation Department in some counties. 

See the excellent DATCP publications ‚ÄúLead Arsenate Soil Sampling Guidance for Homeowners‚ÄĚ at https://datcp.wi.gov/Documents/ArmPub219.pdf and ‚ÄúLead and Arsenic in Soil at Old Fruit Orchards Frequently Asked Questions‚ÄĚ at datcp.wi.gov/Documents/ArmPub99.pdf. The WRA created the Lead/Arsenic Pesticide Addendum to assist parties when a transaction includes former or current orchards. The addendum is available in zipForm and might be used to ensure soil testing is done if the property in the transaction is or was an orchard site.

VLDR Question E18. Are you aware of archeological artifacts, mineral rights, orchards, or endangered species on the property?

Mineral rights

Another property condition undetectable from magic carpet altitude, or even if we were on the ground, is mineral rights. The right to extract underground minerals may be severed from the right to use the land surface so the owners of the surface area do not own the rights to the minerals found under the ground. This often occurs in northern Wisconsin where geologists have discovered copper and zinc and continue to explore for other metals as well as oil and natural gas. Mineral rights may also involve substances such as gravel ‚ÄĒ and now ‚ÄĒ frac sand.

Wisconsin law requires that owners of mineral rights who do not own the surface rights must ‚Äúuse‚ÄĚ their mineral rights every 20 years. ‚ÄúUse‚ÄĚ may be mining activity; recording the conveyance of mineral rights; recording any other transaction creating, alienating, reserving, mortgaging or assigning mineral rights; paying property taxes on the minerals; or recording a statement of claim. Thus, a conveyance of mineral rights would keep the interest alive for 20 years.¬†

The possibility that the mineral rights owner will come and extract minerals is alarming for surface owners. 

See the Bayfield County Mineral Rights FAQ at www.savethewatersedge.com/bayfield-county-mineral-rig.html and Wis. Stat. §§ 706.01, 706.055 & 706.057 at docs.legis.wisconsin.gov/statutes/statutes/706.pdf. 

VLDR Question E18. Are you aware of archeological artifacts, mineral rights, orchards, or endangered species on the property?

Floodplains

Unfortunately, we can often identify floodplains by sight because rivers, lakes, streams and other bodies of water have too often been overflowing their banks. The picture of water where yards, streets and dry homes are supposed to be is vivid.

Floodplains are typically lowland areas adjacent to lakes, wetlands and rivers that are covered by water during a flood. The floodplain is that land that has been or may be covered by floodwater during the regional flood. The regional flood is the same as the 100-year flood, or the area with a 1 percent chance of flooding in any given year. The floodplain includes the floodway and flood fringe areas.

The floodway is the channel of a river or stream and is associated with moving water. New development is prohibited in floodway areas. Anyone purchasing a lot along a watercourse should check to ensure that there is a buildable area outside the floodway. The flood fringe is the portion of the floodplain outside of the floodway, which is covered by floodwater during the regional flood, and is generally associated with standing water rather than flowing water. Development may be allowed, subject to floodplain development standards. 

The presence of a property in a floodplain may affect the willingness of a buyer to purchase a property, the price and the cost of flood insurance. 

To check the floodplain status of a property, use the map tool at msc.fema.gov/portal/home. For additional floodplain information, see dnr.wi.gov/topic/floodplains. 

VLDR Question E3. Are you aware of the property or any portion of the property being located in a floodplain, wetland, or shoreland zoning area?

Nuisances from the neighbors

In order to experience some property conditions, it is necessary to land the magic carpet, walk about and use our ears and noses regarding irritants coming from neighboring properties. Case law points to several possible examples.

In Zink v. Khwaja, 2000 WI App. 58 (2000), cranberry farmers constructed dikes and dams around the cranberry farm for collecting ground and surface water, resulting in flooding of the neighbor’s property that prevented him from grazing cattle and growing crops. He sued but failed to meet his burden of proving the cranberry bogs caused the invasion of water and flood damage to his property. 

In Kellogg v. Village of Viola, 67 Wis. 2d 345, 227 N.W. 2d 55 (1975), smoke damage suffered by the mink on Kellogg’s mink ranch was found to be an actionable nuisance. Kellogg was awarded over $10,000 in his 1970 action for damages because of the smoke coming from the adjacent village dump.

In State v. Quality Egg Farm, 104 Wis.2d 506, 311 N.W.2d 650 (1981), the attorney general sued for the abatement of the odor emanating from the egg farm that had grown to 140,000 chickens, alleging a public nuisance caused by the combination of manure odors and body odors of the chickens being forced on the community by ventilation fans and manure removed from the chicken house and deposited on the land. The court granted a permanent injunction abating the public nuisance caused by the egg farm. 

Other nuisances from the neighbors might involve airport noise and interference with solar and wind energy. See pages 2-7 of Legal Update 01.06, ‚ÄúEncroachments,‚ÄĚ at www.wra.org/LU0106.¬†

VLDR Question F4. Are you aware of significant odor, noise, water diversion, water intrusion, or other irritants emanating from neighboring property? 

Manure storage facilities

While we are on the ground using our noses, we may find manure storage facilities while walking about rural areas. Manure storage facilities raise numerous concerns about groundwater contamination as well as unpleasant odor. Local units of government may have manure storage facility ordinances that must be read and applied in tandem with the state livestock siting regulations. 

New waste storage facilities are governed by Wis. Admin. Code ¬ß ATCP 51.18 within the livestock siting rules. The siting rules require that new waste storage facilities be set back at least 350 feet from roads and property lines. Under DNR and DATCP rules, all farmers who mechanically apply manure or commercial fertilizer to cropland ‚ÄĒ and not just livestock operators ‚ÄĒ must have a nutrient management plan.

The property purchaser wants assurance that storage and operations are conducted in accordance with all applicable laws.

See the Livestock Siting and Nutrient Management resources at datcp.wi.gov/Environment/Livestock_Siting/index.aspx and the USDA information at www.nrcs.usda.gov/wps/portal/nrcs/detail/wi/technical/cp/cta/?cid=nrcs144p2_027217. Manure storage ordinances are cataloged at datcp.wi.gov/Pages/Programs_Services/ManureStorageOrdinances.aspx. 

VLDR Question E19. Are you aware of existing or abandoned manure storage facilities located on the property? 

Impact fees

Leaving the country fragrances behind, the magic carpet heads off to more urban regions to look at development properties and crunch some numbers. Assume a developer finds a property that looks promising but local regulation might impose hidden costs that may discourage transactions. 

The impact fee law in Wis. Stat. § 66.0617 (docs.legis.wisconsin.gov/statutes/statutes/66/VI/0617) permits a city, village or town to impose an impact fee on a developer to pay capital costs to construct certain public facilities that are necessary to accommodate land development. Impact fees must be directly related to the need for new or improved public facilities to serve the land development, must be based on actual capital costs or reasonable estimates of costs for public facilities, and must be reduced to compensate for other funds collected by the municipality or moneys received from the federal or state government to pay for public facilities. Impact fees must be paid within two weeks of the time a building permit or occupancy permit is issued, not when a subdivision plat is approved. 

A property developer may need to contact the local municipality to track down which impact fees are in play.

VLDR Question D5. Are you aware of impact fees or another condition or occurrence that would significantly increase development costs or reduce the value of the property to a reasonable person with knowledge of the nature and scope of the condition or occurrence?

Subsoil or fill issues

While touring development properties, we might begin to wish the magic carpet included subterranean powers. When a vacant lot or parcel is being sold where the buyer presumably will build a home or other structure, the buyer and his builder want to know if there will be any subsoil issues or obstacles to contend with when the foundation is dug. Subsoil conditions can have a substantial impact on the feasibility of a construction project ‚ÄĒ needing to install a well 20 feet deeper than anticipated due to a low groundwater table or, in the alternative, having to add 5 feet of fill due to a high groundwater table, can add greatly to the cost of a project.

Other adverse subsoil conditions might include subsurface foundations or waste material; any type of fill; dumpsites where pesticides, herbicides, fertilizer or other toxic or hazardous materials or containers for these materials were disposed of in violation of manufacturer or government guidelines or other laws regulating such disposal; high groundwater; adverse soil conditions such as low load-bearing capacity, earth or soil movement or slides; or excessive rocks or rock formations. These may be difficult for a buyer to discern and may require an evaluation by a soils expert.

VLDR Question B4. Are you aware of subsoil conditions that would significantly increase the cost of development, … ?

Dam provisions

Look below! How picturesque with the charming dam on the bubbling stream. That charming dam may come with a fair amount of responsibility and expense. Not only is the seller’s disclosure important so the buyer realizes she may need to pay dam maintenance expenses from time to time, but the other issue is whether the seller and buyer need to complete a transfer application or other paperwork with the DNR. Visit dnr.wi.gov/topic/dams/ for information. 

VLDR Question E13. Are you aware of a dam that is totally or partially located on the property or that an ownership in a dam that is not located on the property will be transferred with the property because it is owned collectively by members of a homeowners‚Äô association, lake district, or similar group? (If ‚Äúyes,‚ÄĚ contact the Wisconsin Department of Natural Resources to find out if dam transfer requirements or agency orders apply.)

Burial sites

A burial site might be hard to detect from magic carpet altitude, but we might just spot Native American burial mounds. The burial sites preservation law, Wis. Stat. § 157.70, applies to any property regardless of ownership or the activities conducted. It applies to a developer creating a new subdivision, or a property owner excavating for a pool or house foundation. If substantial evidence of a burial site is found, it is important that this information be disclosed to a potential buyer. Private landowners, agents or potential property buyers can request information about archaeological sites and burial sites present on a parcel. For further burial site information, visit www.wisconsinhistory.org/hp/burialsites. 

VLDR Question E17. Are you aware of one or more burial sites on the property? (For information regarding the presence, preservation, and potential disturbance of burial sites, contact the Wisconsin Historical Society at 800‚ąí342‚ąí7834 ‚Ķ.

Debbi Conrad is Senior Attorney and Director of Legal Affairs for the WRA.

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