I’m not Barbara Walters, and thank goodness 2020 is behind us! One of the big lessons I learned in 2020 that I’d like to share involves how to split parcels. Over the last year, we have seen an upsurge in buyers looking for small acreages – around 10 acres, more or less. Agents and brokers serving smaller towns surrounding large metropolitan areas were sure to notice this increase. There is enormous demand and scarce supply. How do we fix that? By splitting parcels, of course! Here is a step-by-step guide to splitting parcels in Pottawattamie County, IA – each county differs on specifics, but the main ideas are universal.
County Planning and Zoning
Talk to your county planning board first. There are myriad rules and regulations around how land can and cannot be split, including, but not limited to, zoning restrictions. Zoning restrictions are going to be the biggest blessing or headache, depending on your ideal outcomes. Dealing in land in the Midwest, I primarily deal with AG zoned land, which is generally some of the most relaxed in its restrictions. Bare ground is a blank canvas, more or less. But your first stop should be with the Planning and Zoning Board to see if you’re even legally able to split a parcel, how many times you can split parcels before re-zoning must be addressed, etc. The board should be able to provide you with a checklist of steps to take and answer any questions you may have.
Your conversation with the board should include a list of reputable surveyors, as they will ultimately be the ones defining exactly where the old parcel stops and the new parcel starts. Legal descriptions can be as much fun to read as a dictionary, but they provide the exact information needed to define your property’s boundaries and establish the new lines being created. Legally, a licensed surveyor must be utilized to parse off a new parcel. This process is done through a Sketch Plat Application. Your surveyor should be intimately familiar with this process. I would highly recommend requesting the survey be done before crops start to sprout, or after harvest, as access to reference pins can be a huge time-suck for surveyors.
Another Trip to the County Offices
Once the plat of survey has been received and approved by planning/zoning, and any fees due have been paid, you’re ready to walk down the hall to the County Treasurer’s office. Iowa property taxes are paid in arrears – in other words, your payments this year go toward what you owe from last year. This is a quirk of Iowa’s system, no doubt, but it rings true wherever you may be: taxes must be brought current before new parcels can be established. If this new parcel is being sold to another party, getting a title company involved is strongly recommended. Title insurance is one of those things where a couple hundred dollars additional cost can save you thousands in headaches down the road. I always encourage clients to have it and hope to never need it. But, a title search should be strongly encouraged, as well, to remove any doubt of clouds that may be present. And should the title search come back clean, but down the road, a new cloud is discovered, title insurance will save the day!
Part of the role of the title company is to write out new deeds for the recently created parcels. It is also part of the title company’s role to submit these deeds for recording. Keep in mind, the new deeds must EACH be accompanied by a copy of the APPROVED sketch plat application. So, if you’re creating 2 parcels, you need to have 2 copies of the sketch plat application. Failure to include this will result in a rejected deed, and double fees, as you’ll have to come back with the rejected deed and approved application at a later date. Trust me when I say there are few conversations with a client that are less fun to have than telling them, “I screwed up, and you don’t actually own this parcel yet.” Save yourself this headache (and embarrassment) and make an extra copy.
Closing day is always a big day. Almost universally, real estate is likely the largest single purchase a person will ever make. It is exciting, terrifying, and everything in between. Knowing you have all your ducks in a row makes the sweetness that much sweeter. Having things out of whack will likely enhance the bitterness. But, following the steps above should help mitigate a lot of the “Oh, no!” moments you might encounter when doing this for the first time. Another way to mitigate, of course, is to involve professionals. As real estate agents and brokers, we need to split parcels more frequently than the average landowner. We’re here to help you buy or sell that dream!