Shared Well

[Chris Langlois]

Can anyone advise me how to approach this job?

A neighbor has an easement to draw water and maintain a well on the subject property.

The title insurance company missed this on an old deed.

The client wants a "diminution of value" appraisal of the subject property.

Would it be the cost of a new well for the neighbor?

How would this be approached?

There appear to be no usable comparables.

 

[Pamela Crowley (Florida)]

The well is physically located on the subject property with the neighbor having an easement to use and maintain it??? Does the subject property have a 2nd well to service the subject house or is this 1 well servicing both houses???

If the well in question is physically located on the subject property, there is very little if any affect on the subject value - at least here in my market. If that well services both houses and problems arise where it needs repairs, who pays for fixing it? If the well only services the neighbor with the easement only being viable for access and maintenance, I still can't see any actual value issue - at least here in my market. Now, if the well goes dry or a new well needs to be drilled, can the neighbor do that on the easement that is located on the subject property or will they have to drill the new well on their own property? Does or did the neighbor pay for that easement and use?

Lots of questions to be answered and I probably haven't come up with all of them yet. I've done a few with shared wells and found little to no value issues - just potential legal issues that 'could' cost real dollars, but unlikely and how much is this potential going to impact typical potential buyers of the subject? As long as the well is supplying water to the subject house, most don't care... but, that does depend on the local area and how reliable water wells are in that particular area. Are there local issues regarding water available from wells? Are some wells drying up from local draught conditions making a good and deep water well a valuable commodity?

Lots of questions need to be answered, many very local in focus, before a value conclusion can be found.

 

[Restrain]

Shared wells are common around here, generally 2-6 homes. The homeowner has to have a well anyway, and the group ownership creates effectively a utility easement across the subject for water service. The well agreement can be a positive in that the homeowner doesn't have to pay any repairs solely out of his pocket. Everyone has to pitch in to repair/redrill as necessary. The only issue that I see is where the piping goes. It may cut the property so that it adversely affects the utility (unable to put up a shop, etc), but that would seem to me to be the only issue.

That being said, there may be an issue with proximity to the septic, but that's another problem.

Hope this helps.

Roger

 

[Chris Langlois]

I think you guys are on the right track.

If the owner also uses the well, the fact that the neighbor ties in to it doesn't (in itself) keep him from adding on, putting in a pool, etc. The well is there anyway.

If push came to shove, I think the cost to cure, i.e, putting in a well for the neighbor, would be the extent of the impact.

Thanks for your input.

Any further info would be apprecated.


Chris Langlois