Real estate development involves a variety of complex legal and financial concerns. From finding the right property to securing financing, there are many factors that developers must consider. Because zoning laws are a crucial factor in real estate development, it is important to understand the role that entitlements will play when requesting approval from a local government to develop a property. When addressing issues related to zoning, entitlements, licensing, and variances, developers can work with an experienced attorney to make sure these matters will be handled properly.

What Are Entitlements?

In the context of real estate, entitlements refer to the legal rights granted by government agencies that allow developers to use their property for specific purposes. These rights typically include zoning approvals, building permits, environmental clearances, and other necessary permissions.

Obtaining entitlements is an essential step in the development process as they determine what can be built on a particular piece of land and how a building and property can be used. Without proper entitlements, developers may face legal challenges or restrictions on their projects.

For individuals and businesses throughout the state of Wisconsin, property taxes can be a serious issue. The requirement to pay these taxes can place a significant financial burden on property owners, especially when taxes are increased significantly or when other related fees are imposed. In some cases, cities and towns have attempted to levy additional taxes or fees in order to fund utilities, improvements, and other expenses. However, the state of Wisconsin places limits on increases in property taxes. In a recent decision, the Wisconsin Supreme Court addressed attempts by the town of Buchanan to get around these limits, and it forced the town to comply with the levy limits that have been put in place in Wisconsin law.

Wisconsin Property Taxpayers, Inc. v. Town of Buchanan

In 2019, the town of Buchanan sought to increase revenue that would be used to maintain and reconstruct roads in the area. To do so, it used a referendum to allow voters to decide between raising property taxes, putting a special assessment in place, or creating a Transportation Utility Fee (TUF). Voters chose the TUF, and the town put an ordinance in place creating a Transportation Utility District that would be funded by these fees.

The town's Transportation Utility Fee was imposed in addition to the property taxes the town collected. While property taxes are based on the value of a property, the TUF was based on the usage of the town's roads that a property was estimated to generate. The annual fee ranged from around $300 for most residential homes to $8,000 for certain commercial properties.

Real estate transactions can be very complicated, and there are multiple types of legal issues that buyers and sellers will want to be aware of. Easements are one issue that will affect how a piece of property can be used. If easements are not properly disclosed during a transaction, real estate litigation may be required to address this issue.

Understanding Easements

An easement is a legal agreement that gives a person, company, or organization the right to use someone else’s property. Easements come in several forms, including:

• Public easements - A portion of a person’s property may be set aside for public use. These easements may address utilities, ensuring that the government or private utility companies can access a property to install or repair power lines, water lines, or other types of utilities.
• Private easements - A private individual may be given permission to use someone else’s property for certain purposes. For example, a person may have been granted the right to hunt and fish on someone else’s property, or a person may have been allowed to enter a neighbor’s property to access a lake or river.
• Easements by necessity - A person may need to cross over another person’s property to enter their own property. These easements can ensure that a person will not be denied access to property that is landlocked.

Some easements may apply to a piece of property, and they will remain in effect after the property is sold. In other cases, easements may be granted to a person or organization, and these will usually remain in effect as long as the original owner owns the property. Easements may be affirmative, meaning that they grant permission to use the property for specific purposes, or they may be negative, meaning that they restrict the property owner from making changes to the property, such as constructing a building that will block a neighbor’s access to the property or their view. 

When homebuyers and sellers sign a real estate purchase agreement, they enter into a legally binding contract, the terms of which both parties are expected to uphold. Many real estate transactions are completed without issue, but if you find yourself in a situation in which the other party has failed to follow through on the agreement, you may be able to pursue remedies through a lawsuit for breach of contract with the assistance of a real estate litigation attorney.

Examples of Breaches of Real Estate Purchase Contracts

Typically, the most important provisions of a real estate purchase agreement are the agreed-upon purchase price for the home and the closing date, or the date on which the transaction will be finalized. If the seller fails to complete the sale or the buyer fails to complete the purchase by the agreed-upon closing date, they may be in breach of contract. A breach of contract can also be related to other terms of the contract, such as the seller’s agreement to include certain items in the sale or provide a clear property title to the buyer.

Including Contingencies in the Purchase Agreement

In general, once the buyer and seller have signed the agreement, they are expected to go through with the purchase. However, it is often a good idea to include contingencies in the agreement that allow you to terminate the contract under certain circumstances without being in breach. For example, as a buyer, you may request a contingency pending the results of a home inspection or your ability to obtain financing through a mortgage loan. Other common contingencies are related to the buyer’s ability to sell their current home or the seller’s ability to find a new home before the closing date.

The purchase of a home is a complex process that has a significant impact on both the buyer and the seller. As such, a successful purchase requires a certain level of transparency and trust between the two parties. When a buyer or seller does not act in good faith or fails to fulfill an obligation, major obstacles to the sale can arise, not to mention legal issues that often must be resolved through real estate litigation. One such issue that Wisconsin home buyers and sellers should be aware of is the seller’s failure to make required disclosures about the property.

What Does a Seller Need to Disclose?

In Wisconsin, once a buyer and seller agree to a purchase contract for a residential real estate property, the seller is usually required to complete a Real Estate Condition Report and provide it to the buyer within 10 days. In the report, the seller must disclose any known defects in or on the property that would have a significantly adverse impact on its value, expected lifespan, or the health and safety of its occupants. The disclosure form includes questions regarding defects in a variety of categories, including but not limited to:

• Defects in the roof, foundation, structure, electrical or plumbing systems, and mechanical equipment
• Environmental defects, including the presence of mold, radon, asbestos, other hazardous substances, or destructive pests
• Defects in a well, septic system, or fuel storage tank
• Land use issues, including easements, encumbrances, and zoning violations

When the seller indicates that there is a known defect in response to any of the questions on the form, they are required to provide an explanation of what the defect entails.