Often we encourage our buyers to request a Study Period in their Offer To Purchase contract. A study period allows the buyer a specific period of time in which to examine the property with a variety of inspections, thus a Study Period is not exactly the same as a home inspection….though it may include home inspections as well.
Is a Study Period a Home Inspection?
Purchasers of large acreage, whether for purposes of farming or development, have concerns that ordinary home buyers do not necessarily have. So there are features that differentiate a study period from a home inspection. One of the major differences is that a study period allows a range of inspections to take place over a stated period of time, not just a home/structural inspection. During the scope of the Study Period a buyer is able to examine details of the property in depth, with professional inspectors if desired, to find out details of the property that might not be readily seen….prior to fully committing to the purchase.
Why Would You Need a Study Period?
Often large tracts of land trade ownership infrequently (family farms etc) and that aspect means the property has likely not had as much examination of its deeds, covenants, or restrictions, as common residential homes and lots which are sold more often. Frequently there are details in the covenants or deed that would prohibit the purchaser’s intended use for the property. Previous owners may have put restrictions on the property, or there might be unresolved boundary disputes, or maybe the previous covenants contradict current law (like Fair Housing rules). During the study period is when any surveys would take place as well.
What Are Some Study Period Issues?
A big concern for many of our clients who intend to farm the land, is to verify the suitability of the property for their farming purposes. Typical issues that would be examined include location of available water, any previous soil contamination, existing capabilities of well or septic, underground tanks/dumps/chemicals, zoning restrictions, and of course the structural issues that may exist in the main dwelling or the outbuildings. A common resource to examine all of these issues is called a Phase 1 Environmental Assessment, conducted by a specialist who looks for any and all issues. We help guide our clients to these resources.
The buyer will want to confirm whether the property has been entered into a land-use conservancy agreement. If so the buyer may not be able to subdivide the property. Land use restrictions can dictate what descriptions of structures may be built or what type of livestock is acceptable… even whether irrigation will be approved. Some Central VA counties have rules regarding the location of a driveway or setbacks for building near a stream.
Does The Land Match My Goals and Plans?
During the study period the buyer will have time to determine if the property and land will match his own intended uses. The buyer will want to know about mineral rights or timber rights, even if those are not in his immediate plan.
The nature of the unhurried examination time of a Study Period makes it common to unearth unexpected facts. But it also gives the buyer time to see if acceptable solutions may exist. And because of the language of the Study Period in the Offer To Purchase, the buyer is also able to decide not to continue with the purchase of that property.
Don’t guess if that fence will be on your own land. Allow yourself time to verify all of the aspects of your purchase by using a Study Period to examine the details. We’re glad to discuss this with you in more detail anytime.