Blog :: 01-2019

Maine Subdivision Rules - Should You Develop Your land?

Maine Subdivision Rules - Should You Develop Your land?

In Maine, there is a difference between a division of land and a subdivision of land. In most municipalities dividing your property into two separate lots requires little or no permitting. However, dividing a property into 3 separate lots within a 5-year period does require approval in most cases, and is the definition of “subdivision” in our state.

Increased Property Value

Why would you want to do a subdivision? Most property investors look at the subdivision process as a way to increase the per acre value of their property. At first the thought of a smaller lot being worth more does not make sense, but consider that by reducing the size of the acreage you bring the gross selling price lower and within the purchasing power of more people. More people competing for a property usually translates to more demand and a higher price.

Higher prices may or may not translate into more profits. Before jumping headfirst into a subdivision some research and planning should be undertaken. Market conditions should be the first consideration. Data such as recent comparable lot sales, how many sales have occurred, lot sizes of successful sales, what is the current supply of lots, absorption rates, and financing availability to name a few. Next what will be the costs of surveying, wetland delineation, engineering, road construction, soil testing and other requirements of permitting? After thorough analysis and due diligence a property owner can decide if the risk is worth the reward to subdivide.

Requirements

Every organized town in Maine may have a slightly different subdivision ordinance. The unorganized territories in Maine have a uniform ordinance with little variation in requirements. Typically, a local planning board will review a proposed subdivision to see if it conforms with the ordinance. The process will consist of several meetings starting with a presentation of a preliminary sketch of the proposal. This is followed up with notifications to the public and nearby property owners of the proposed subdivision and the date of the public meeting to review it.

This next hearing consists of a more formal presentation of a preliminary survey plan of the layout of the proposed lots, roads, easements, slopes, soils etc. Public comment is permitted and heard by the board. After this meeting any changes required by the board need to be addressed and another hearing with a final plan will be scheduled. Assuming no other issues are outstanding, the board will sign the final plan that will be recorded in the county registry of deeds.

Exceptions

There are a number of exceptions to the rule to sell property without the process of subdivision. Gifts to relatives (see definition in statute) may be exempt if the donor has owned the property for at least 5 years and the consideration is less than ½ the current assessed value. Sales to abutting property owners may be exempt from subdivision rules. In unorganized territories, 3 lots can be created in a 5-year period as long as the 3rd lot is retained for forest management purposes. This is often referred to as the ‘2 in 5 Rule.’ There are other exceptions listed in the statute linked above.

Summary

This post is intended to encourage a thoughtful process in land investing and should not be viewed as an endorsement to subdivide your property. In many cases I would advise clients not to.  The above descriptions are a simplification of the process, not a complete outline of all potential requirements of every planning board. You are well advised to consult with experienced professionals like real estate attorneys, surveyors, soil scientist, and land brokers before undertaking the subdivision process.

Top 5 Reasons Your Maine Land Has Not Sold

Has your land in Maine been on the market for 6 months, 12 months, 2 years or more? Few showings, no offers and you think that something must be wrong. Well something probably is. Here are the Top 5 Reasons we have identified that get in the way of selling your property.

Price

The number one reason property does not sell is typically a pricing problem. Before putting your land on the market a thorough analysis of the potential uses of the land, recent sale data, competing properties for sale, location issues, property improvements and other factors should be considered in order to price the property competitively for the market. If this is not done correctly from the start the end result is longer marketing time and a below market selling price.

Marketing

Number two on our list is marketing. Determining who the most probable buyer is and then how you reach those prospects is paramount to any good marketing plan.

Selling raw land or properties with a large component of land is not the same as selling a single family home on 1/2 an acre in town. Putting and ad in a local paper, a sign on the property, placing the property in MLS, Realtor.com, Zillo and Trulia can be effective for selling homes but miss the mark for properties with acreage. Take a peek at any of these mediums and you quickly see that they are designed to focus 99% of attention on single family homes. Land is hard to find here and generally not presented in an attractive manner with a low quality tax map or Google Earth screen shot as the opening photo.

Access Issues

How you physically get onto a property has a real effect on buyer interest and general appeal of the land. If your land fronts a busy road or highway and there is no driveway or access road onto the property prospective buyers may have a difficult time seeing the utility of the parcel. Does the land have a clear right of way if it is not on a public road? If not, what can you do to better define the access or right of way? Is your property on a private road that is in bad condition? If any of these situations describe your property, this could be one of the reasons your land is not selling.

Boundaries are unclear

Imagine yourself as a prospective buyer and meeting the owner or real estate agent to see a 50 acre parcel of land. Now imagine you ask them where the property lines are and they tell you "we think they are somewhere around here". Does that statement give you and warm and fuzzy feeling that would inspire you to write a deposit check? I doubt it. Get your property surveyed to add value and shorten the marketing time.

No Owner Terms

If you have not considered offering owner financing terms for the sale of your land, you should give it more thought. Inquiries on our land listings triple when advertised with owner financing terms. It simply opens the property up to a much larger buyer audience. Owner terms often bring a higher price for the property and most owners get interest rates that are attractive as an investment.

If any of these conditions apply to you, this may be the reason why you have not been successful in selling your property. Need more help? Call us today for a professional opinion.

Purchasing Land By Soil Type – Understanding Soil Surveys

When you are in the market to purchase land one important consideration is soil quality.  Your soil considerations should be based on the intended use for the land. Do you want to grow crops, graze animals, manage timber, provide recreation opportunities or conserve wildlife, wetlands and other sensitive features? The higher the soil quality the better crops and trees will grow. These will be better drained sites for constructing homes and cabins as well.

The U.S. Natural Resource Conservation Service (NRCS) has provided a plethora of information online at Web Soil Survey. The online data is complex. Some soil knowledge or basic mapping skills are necessary to navigate this site. We, at United Country Lifestyle Properties of Maine, have made this process easier for our customers and clients through the use of mapping software that simplifies the NRCS data into an easy to understand soil report.

Soil Types

NRCS has identified more than 70,000 soil types in the United States.   Maine has soil types such as Monarda, Dixmont, Howland, Thorndike, Bangor and many others. The types or series of soils will be abbreviated on maps and reports such as Mo for Monarda or Ba for Bangor. Soils are given compound names such as Bangor silt loam. The first part of the name, Bangor, refers to the soil type. The second part, in this case silt loam, refers to the structural texture of the soil. You can find a soil triangle like the one below online to help determine the texture. I’m not going to discuss the various simple to complex testing methods that can be done for soil texture, you can Google search this topic and find a number of articles and videos showing these methods.  Here is a link to a simple jar method. https://hgic.clemson.edu/factsheet/soil-texture-analysis-the-jar-test/  

Capability Classes

Soil types are assigned classes from I to VIII based on their suitability for agriculture. They are also assigned subclasses based on their limitations of e,w,s, and c which stand for erosion, water, shallow or droughty and cold climate.

Capability Classes I – VIII with I being most desirable. Classes I-IV will support most types of cultivation and V-VII do not support cultivation but can accommodate forestry and grazing. Class VIII land does not support cultivation, grazing or timber production and includes cliff faces and other rock outcrops, beaches, river and creek beds.

 

Understanding Soil Code

Looking at a soil type map for the first time is Greek to most people. But with use of the NRCS Websoil Survey or a mapping platform such as Mapright, these codes will become easy to use. So, the next time you see BaC 3e, you can refer to the capability view and know that this is Bangor Silt Loam with 8-15% slopes and the limiting factor to its agriculture productivity is its propensity for erosion. It can be used for growing crops as long as a lot of conservation measures are used. It probably is better suited to grazing and would certainly grow trees very well.

While doing due diligence in the review of a specific property, don’t eliminate it just because it has class IV – VIII soils, they have value, just not to a farmer. Most of Maine has some limitation to its soils from rocks to slopes to bedrock and so on. Class I and II soils with no limitations are rare and expensive.

Limitations

Like most online data, the US NRCS soil mapping has limitations and localized exceptions will be found on most every site. These reports should not be replaced with an on-ground inspection of individual properties. If soil conditions are critical to your intended use of the property, a soil professional should be consulted.