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Real Estate Law, Riparian Rights and the View

Imagine a waterfront house with a large privacy fence that blocks all view of the water — its a strange image.  If there is no view, the property loses most of its “waterfront” essence and most of its value, so somehow, somewhere, the law must protect a waterfront owner’s view.  But I regularly hear other attorneys and government officials recite the old saw: “there is no right to a view.”  They are wrong in some ways, but they do have good reason to say that.  Maryland law (and the law in most coastal states) is silent about the water view.  Concerning riparian rights, Maryland’s court says:

The term “riparian rights” indicates a bundle of rights that turn on the physical relationship of a body of water to the land abutting it….  This bundle includes at least the following rights: (i) of access to the water; (ii) to build a wharf or pier into the water; (iii) to use the water without transforming it; (iv) to consume the water; (v) to accretions (alluvium); and (vi) to own the subsoil of nonnavigable streams and other “private” waters. To be sure, access to the water is a primary asset of riparian rights.  Gunby v. Olde Severna Park Improvement Ass’n, Inc., 174 Md. App. 189, 239-40, 921 A.2d 292, 322 aff’d, 402 Md. 317, 936 A.2d 365 (2007).

The view wasn’t an issue in the Gunby case, but this is an accurate summary.  Florida law, for example is much different: “Upland owners hold several special or exclusive common law littoral rights: (1) the right to have access to the water; (2) the right to reasonably use the water; (3) the right to accretion and reliction; and (4) the right to the unobstructed view of the water.” Walton Cnty. v. Stop Beach Renourishment, Inc., 998 So. 2d 1102, 1111 (Fla. 2008).

Are Maryland property owners without protection then?  The answer is no, the view is protected, but getting to that can be a bit convoluted.  First and foremost, “access to water is a primary asset of riparian rights.”  Most things that obscure the view, such as a fence or wall or, to a lesser degree plantings, also obstruct access and therefore can and should be challenged.   (Need more on potential issues and solutions for waterfront purchases?  Look here.

A pier typically obscures the view and water access to a lesser degree than a fence — but it seems clear that someone else should not be able to build one in front of a lot owned by someone else.  This brings up the riparian owners’ right “to build a wharf or pier into the water.”  When it comes to someone else other than the owner putting in a pier, this is what I consider a negative right.  If the riparian owner as the affirmative right to build a pier, it follows that they also have the negative right to prevent a non-owner from building a pier.  This right is also captured in the Maryland Code (and most County and City zoning provisions) insofar as it is only the owner that has the right to build a pier in front of waterfront property.  The owner “may make improvements into the water in front of the land to preserve that person’s access to the navigable water …. After an improvement has been constructed, the improvement is the property of the owner of the land to which the improvement is attached.” Md. Code Ann., Envir. § 16-201.

And so, there are ways to protect a riparian owner’s view of the water, even if that right is not specifically laid out in Maryland’s cases or statutes.   If you are not an owner, however, the options to protect a view are drastically more limited — that will need to be a topic for another article.

If you are in a situation where you are concerned about a neighbor infringing on your view — send me an email at dschwenk@baylawllc.com or give me a call at the number to the right.

J. Dirk Schwenk is a Maryland Real Estate, Waterfront Property, Civil Litigation and Maritime Lawyer from Annapolis, Maryland.  He provides civil litigation services in contract disputes, environmental and zoning issues, adverse possession and boundary disputes.  He graduated cum laude (with honors) from the University of Maryland School of Law in 1997 and has been in private practice in Maryland ever since.

Boundary Disputes and Land Surveys

Maryland’s highest court issued a decision last week in Webb v. Nowak, a case about boundary disputes.  The case arose because the Nowak’s cut down and sold timber on a parcel of land that the Webb’s believed they owned – this led to accusations of trespass and claims of adverse possession.  Both parties obtained surveys to determine where the boundary line was supposed to be.  The original 1928 deed set the mutual property line at an “existing fence” and then ran from the fence “340 feet more or less” to a road.  The Nowak’s surveyor concluded that there were remnants of a fence and other evidence of its location when he surveyed almost 80 years later in 2007.  His testimony included pictures of a fence post, the borings of a tree that had grown around a fence post and a description of a swale that he concluded indicated the edge of a formerly tilled field.  He therefore concluded that the 340 foot measurement was a mistake, and the distance should only be about 200 feet.  The Webb’s surveyor relied on a point 340 feet from the road, but did not note any evidence of a fence at that location.

For a starting point, the Court of Appeals concluded that there was a question of fact concerning the correct location of the boundary.  A “determination of which of two surveys reflected the true boundaries of disputed land as intended by the original surveyor is a question of fact.”  Webb v. Nowak, 83 SEPTTERM 2012, 2013 WL 4417573 (Md. Aug. 20, 2013).

The determination of the boundary line in this case … must involve comparing the Wolf deed to conditions in the field—e.g., the location and condition of the Existing Fence, the location of the Private road and County road, the location of other monuments, the topography of the land, and even the location of surveyors’ pins.”

Webb v. Nowak, 83 SEPTTERM 2012, 2013 WL 4417573 (Md. Aug. 20, 2013).  The Court went on to conclude that the 340 foot measurement was a mistake, because the fence was a monument and “monuments control over courses and distances where they continue to exist, or their locations can be determined with reasonable certainty.”  Webb v. Nowak, 83 SEPTTERM 2012, 2013 WL 4417573 (Md. Aug. 20, 2013).

The takeaway for a current landowner?  First, if there is a dispute about the correct boundary in a deed, the testimony of a surveyor will be of paramount importance.  This brings me to land surveys — In Maryland, land surveyors are licensed by the State and the state regulates what must be included in certain types of surveys.

What most people receive when they buy a house — a location drawing — is the lowest form of survey and it cannot be given to someone unless they acknowledge in writing that “A LOCATION DRAWING IS NOT A BOUNDARY SURVEY AND CANNOT BE RELIED UPON BY ANYONE TO SHOW WHERE THE PROPERTY’S BOUNDARIES ARE.” COMAR 09.13.06.06.  The purpose of a location drawing is only to “provide some assurances that improvements are located on the property.  This assurance is for the use of a lend or an insurer only.”  Id.  So a homeowner that purchases a property is not supposed to rely on the location drawing for assurances that the boundaries are correct.

An accurate and reliable survey that is likely to be accepted in Court needs to be at least a Boundary Survey.  A boundary survey will establish and mark the “physical position and extent of the boundaries of the property” and requires that monuments (surveyors stakes) be set and a plat produced.  COMAR 09.13.06.03.  Conducting the survey is what will place the surveyor in a position to testify as an expert to the location of the lines.  And in the case of Webb v. Nowak, it is what put the surveyor in a position to testify that a line described in a deed as 340 feet was really only 200 feet – and that testimony made all the difference.

For more on types of surveys, see Types of Land Surveys

J. Dirk Schwenk graduated from the University of Maryland School of Law in 1997, cum laude, and practices in real estate, waterfront land riparian rights and marine issues in Annapolis, Maryland.

Types of Land Surveys

I regularly receive calls from landowners that have a conflict (or potential conflict) with a neighbor over the boundaries between their properties.  For waterfront property, this may involve the location of a pier.  For the homes in planned and platted communities, this may involve the location of a paper road or community land.  For everyone it might involve a question of where exactly is the shared line between two properties.  These locations may be obscured by installed fences or sheds, by a history of maintenance in one area or lost to history.  It is very common that the potential client, and perhaps their opposing neighbor, do not know where the location is that is called for in the deed or plat.

 

Usually one of my first questions is whether the property has been properly surveyed.  If so, this will narrow the field of dispute a great deal.  Oftentimes the property owner does not have a survey or if they do only has the Location Drawing that they received at purchase or perhaps just the neighborhood plat.  The plat is an important legal document which is relevant (and may establish) the legal boundaries, but it is not the same as being able to locate actual boundaries in the field.  In Maryland, there are several kinds of surveys identified in the regulations, each of which serves a different purpose.  Any qualified surveyor should be able to perform them – a very good surveyor will also be able to testify as needed.  Oftentimes there will be multiple categories on a single plat, but it is good to know what you are looking at, and what you should be able to expect from your surveyor.  Here are some thoughts on each type of survey.

 

1. Location Drawings.  A location drawing is the depiction of the property you receive when you purchase a house.  Although it looks like a survey, it hardly qualifies.  To start with, although you may not remember, if you received one you had to sign a piece of paper that says: A LOCATION DRAWING IS NOT A BOUNDARY SURVEY AND CANNOT BE RELIED ON BY ANYONE TO SHOW WHERE THE PROPERTY’S BOUNDARIES ARE.  The purpose of a boundary survey is to “locate, describe and represent the positions of buildings or other visible improvements affecting the subject property.”  For a location drawing, the surveyor is offering the insurance company and mortgage company an assurance that any improvements to the property are within the boundaries — but that is it.  There are no true assurances to the owner of the size or location of the property, whether there are easements across it, or any of the other items that are likely to cause disputes.

 

2. Boundary Surveys.  A boundary survey “is a means of marking boundaries for sufficient definition and identification to uniquely locate each lot, parcel or tract” and to “establish, reestablish or describe … the physical position and extent of the boundaries of real property.”  If you have a dispute with a neighbor about where the property line is, this is the type of survey that you need.  The surveyor should mark the corners of the property with survey stakes and provide a plat of the area.  To create it, the surveyor will do field work including locating any existing boundaries and markers and review the chain of title to determine what is called for in the deeds.  The surveyor is to accept and review private and public records, and note conflicting boundary line locations.  Field work is to include measurement of locations to an accuracy of 20 millimeters and take account of visible encroachments and visible indications of rights including those asserted by adverse possession or prescription.

 

3. As built, Constructed or Record Surveys: This is the type of survey that is done where there is a question about whether something that has been constructed (say a fence, building or pier) is in the correct location in relation to the boundaries.   They are required to have sufficient accuracy to “permit the determination of whether the position of visible constructed improvements encroach upon adjoining properties” in rights of way or in easements.  In the case of a pier, this will mean that a determination must be made, typically by asking the County zoning officials, of where the riparian line is to be drawn.

 

4. Field Run Topographic Survey: this is the correct survey if the contours of the property are needed, including the location of the mean high water line for waterfront properties.

 

5. Field Run Planimetric Survey: This is similar to a location drawing, except that it is done as a full survey in order to “locate, describe, map or all of these, the horizontal positions of the physical features and characteristics of the earth and other features.”

 

6. Metes and Bounds Description: Instead of a depiction of the property on a plat, this is “a written legal description of the subject tract of land that provides information necessary to propertly locate the property on the ground and distinctly set it apart from all other properties.”

 

7. Right of Way/Easement Surveys: An easement or right of way is a legal right of one person to access property owned by another.  It might be a narrow walking path to reach a beach or other feature, or it might be a complete right of use (such as a community park) that prevents the deeded owner from developing the property in any way.  An easement survey “is a means of obtaining, reporting, or displaying … the necessary data to establish or reestablish the location of sufficient property lines of the affected tract of land to assure the accurate location of the strip or parcel of land being described for the use and benefit of others.  Markers need not be set, but the survey is otherwise required to meet the same standards as a boundary survey.

 

8. Special Purpose Surveys: This is essentially a catch-all category that covers anything aside from the first seven types noted above, but it is not to be used to lower the required standards described in the regulations.

Dirk Schwenk is a graduate, cum laude, from the University of Maryland School of Law.  He practices in real estate, waterfront and riparian law and Maryland boating issues. Baylaw, LLC is located in Annapolis, Maryland.

Dobbins Island January 20, 2012 Court of Appeals Decision – Comments

On January 20, 2012, Maryland’s highest court, the Court of Appeals issued a 40 page opinion in Clickner v. Magothy River Association. For big readers, the entire case is here.  This commentary is the opinion of Dirk Schwenk, the attorney behind waterfrontlaw.com and who represents many waterfront communities (or individuals in waterfront communities) in Maryland.

When this case was decided at the trial level in 2010, my comment was that “I personally believe that the court reached the correct outcome, but it did so for the wrong reasons, probably as a result of confusing testimony concerning the location of the Mean High Water line.”   This worry came to pass, as the trial court’s imposition of a public easement to parts of the island above the mean high water mark did not hold up, and the high court did not see fit to consider whether the fence was actually below the mean high water mark.
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Every case has winners and losers, and in this case the clear loser is the Magothy River Association.  The chief item that that organization succeeded at in trial was the removal of portions of the fence around the island. The Court of Appeals reversed this decision, and the Clickners, should they choose to do so, are empowered to reconstruct the fence.  As a lawyer, however, there is much to learn from the decision beyond who won and who lost. The Court of Appeals goes into great detail on several issues, and must be congratulated for issuing a deeply reasoned decision which considers the larger tensions between public and private rights in the waterfront, as opposed to the more short term issues political issues of Dobbins Island alone.

The primary issue addressed by the Court is this — if the public uses a beach adjacent to wild, undeveloped land, can this use prevent the owner of the land from ever asserting a right to call the land private. This is a real issue for waterfront owners — they may be able to monitor who is using the beach areas near their house — but what if they own undeveloped property in an isolated area? Do they have to fence it off and post no trespassing signs to protect their rights? Or can they allow it to be used by the public on occasion, and assume that in the future if they want to develop the property they will still have private property rights? The Court of Appeals considered this question in depth — noting a California case which required beachfront owners to actively defend their property and caused “the absentee owners of some of the most beautiful parcels put up miles of seven-foot-high fence topped with three strands of barbed wire.”

The Court of Appeals noted that we want the public to be able to use otherwise undeveloped land and correctly concluded that “Owners of open woodlands should not be expected to treat most uses as adverse and it would be unreasonable to require the owner to fence his land or guard against trespassers. Also it would be unfortunate if owners were forced to exclude the public … harmless trespasses should not be discouraged and it would be unfair to penalize the generous owner.” As a result, the Court concluded that “the public’s recreational use of the dry sand portion of the beach on Dobbins Island is presumed to have been a product of the permissive indulgence of its owners. To hold otherwise would galvanize owners into fencing or otherwise obstructing their beaches in order to avoid the assertion of public prescriptive rights, feasibly creating a barricade across Maryland’s shoreline.”

Based on this discussion, the Court of Appeals concluded that for the Magothy River Association to succeed in proving that the public had obtained the right to use private land, it had to show that the owners of Dobbins over the years had not permitted the public to use the island in the same way other owners allow the use of other wild lands. The evidence supported public use, but it did not show that it was use over the objection of the landowners. The MRA lost concerning Dobbins, but the public at large gained with the clarification that all owners of wild lands are not required to fence them off or lose their private rights.

There is, of course, an undeniable irony in the fact that the Clickners put up a fence barring the public, and the Court of Appeals allowed the fence based on the concern that not allowing it would cause all waterfront owners to put up fences.   Nevertheless, the Court of Appeals is right about the law.  The point that it missed (and I daresay has received short shrift at every important moment in this case) is the fact that parts of the Clickner’s fence are actually below the mean high water mark.  (I’ve been there, and there are posts in the water even at a modest summer tide).  In those places, the fence obstructs the public’s right to use the beach below the mean high water mark.  Perhaps the future will hold a point at which the public respects the Clickner’s private land, and the Clickners respect the public’s right to access the beach.  Perhaps.

Top 5 Issues When Purchasing Waterfront

by Dirk Schwenk – dschwenk@waterfrontlaw.com and Mike Piasecki III – mike@marylandwaterfrontproperty.com

There is nothing that can compare to the peace, tranquility and sense of well-being that accompanies ownership of a piece of waterfront property. That feeling should not be disturbed by legal problems that can be prevented or at least managed. In waterfront property there are a few issues that arise with such regularity that they should be considered prior to any purchase. Mike Piasecki, III, Associate Broker, Prudential Carruthers Realtors in Elkton and Ocean Pines (www.marylandwaterfrontproperty.com) and J. Dirk Schwenk, attorney at Baylaw, LLC (www.waterfrontlaw.com) got together to come up with a “top five” list of things that should be thought through. These issues are focused on Maryland waterfront property, but they apply everywhere where piers, views and access to the water are of top concern. Here they are:

1. Community Waterfront versus Private Waterfront.

Many waterfront, waterview and water access properties are located in developments where the original developer subdivided a large tract and reserved the waterfront for the use of all of the houses in the neighborhood. Interior houses may be listed as “water access” properties and have affirmative rights to community beaches, boat ramps and other facilities. In many of these developments, there is also a strip of land that lies along the water and surrounds the entire community and was intended to allow for members of the community to walk and have access to the entire waterfront. The ownership structure of these walks can vary widely, but if they are present, there are special concerns for the homes nearest the water. Those homes may have the right to build and maintain a pier — but the pier may actually be owned by the community and be available for all of the members to use. Or there may be no right to a pier at all. The possible variations are too numerous to list, but an owner purchasing “waterfront” in such a community should be sure to understand exactly what the obligations and benefits are in the particular community.

2. Waterfront versus Waterview.

A true “waterfront” property is one that has riparian rights associated with it. In Maryland and most of the states on the East Coast of the United States, the owner of a property that has riparian rights has the right to apply to construct a pier or other waterfront improvement, has the first right to apply for permits for waterfowl hunting, and has the right to prevent others from impeding access to the water or the view of the water. In contrast, a “waterview” property is generally one that is close to the water, but has land owned by someone else between the land and the shoreline. A waterview may have a limited (or no) right to build a pier and may not have any guarantee that another owner will not build a fence, structure or put in plantings that obstruct the waterview. Careful consideration should be paid to what might be placed between the waterview property and the water — if it is community land on which nothing can be built that is very different than private land on which someone in the future may build a multi-story home.

3. Pier Locations, Boundary Lines and Permits.

Having (or keeping) a pier is a first priority consideration for many waterfront lots. It is not relaxing and fun to have a dispute with a neighbor about whether a pier is on his property, your property, on the line, should be shared, or whether a pier that you were counting on using is even legal in the first place. If you are considering a home where there is currently a pier or where you would like to put in a pier, its continued viability should be examined. First, consult with planning and zoning — was the existing pier built with a permit (or grandfathered?), or if you would like to put in a new pier, can an adequate pier be placed on the site given environmental limitations and the location of neighboring piers? Second, is there any dispute with a neighbor about the location of any of the piers (does a pier encroach the property line extended into the water?) or is there an expectation that a pier will be shared? If you are purchasing a property that is one of several that were previously owned by a single family, it is very common that multiple homes shared a single pier. This sort of agreement should be spelled out — or it can quickly lead to a disagreement.

4. The Obligation and Ability to Maintain the Waterfront.

For any property that faces significant wave action or is on a bluff, there will be erosion concerns. For all waterfront properties, there are significant legal restrictions on the owners’ ability to clear growth and trees, to fill eroded areas, and to construct shoreline protection. The cost and ability to obtain permits for waterfront repairs and maintenance should be considered. For example, in many waterfront communities, there are existing bulkheads or revetments. Depending on the particular community, the cost to maintain these structures may lie with the nearest individual landowner or with the community. In Ocean Pines, Maryland, for example, all properties in the community must pay an annual HOA assessment toward the upkeep of common area facilities, but in the instance of waterfront properties, the assessment may also cover the cost of maintenance to the property’s bulkhead. We say “MAY” because this is true in some sections of Ocean Pines, whereas in other sections, waterfront property owners, although they still pay an annual assessment that is higher than a land locked property, have the cost and burden of bulkhead maintenance placed squarely upon the homeowner. Sounds confusing doesn’t it? This example is exactly why you should consult a waterfront law specialist, and/or waterfront specialist real estate broker before entering into a contract to sell or purchase waterfront property anywhere, but especially in the state of Maryland. Another instance? In Anne Arundel County, Maryland, there have been news reports of criminal charges being filed because a waterfront property owner hired a landscaper to clear trees and bushes along the waterfront. Just like piers, it is wise to consult with knowledgeable professionals and zoning departments before becoming set on plans for improvements.

5. Choose the right professionals.

Purchasing and owning waterfront is meant to improve ones quality of life, and usually it does. There will always be an unfortunate few that end up purchasing a large, unexpected and expensive dispute, and their quality of life is most often not improved. Without question, the best means of avoiding unexpected difficulties is to associate with professionals with experience and interest in waterfront and riparian properties. A good realtor will know the particular area where a property is located, or will know the questions (like the ones above) that must be analyzed in order to know if a property is right for you. A good lawyer will know whether a deed is to transfer all of the rights you expect, (or maybe just some), will be able to spot misunderstandings in pier sharing agreements, and will know how to resolve a dispute that does arise. We hope these pointers help to make your next waterfront property purchase or sale, an enjoyable one!

Dirk Schwenk – dschwenk@waterfrontlaw.com
and Mike Piasecki III – mike@marylandwaterfrontproperty.com

What are riparian rights?

What are Riparian Rights?

Piers, Waterfront and Riparian Rights

To hear Mr. Schwenk discussing riparian rights on Real Estate Today Radio – click here.

When you own waterfront, you get more than just property.   You get a view, you get certain risks (like flooding and erosion) and you get what are known as riparian rights.   A waterfront owner does not own the water, and does not own the land under the water, or even the land below the tide-line, but does own access to the water.   Such a right, however, can be encroached upon by a neighbor’s pier, or transferred to a community association for the rights of the community, or otherwise impeded. These situations can create great conflict within a community, and have grave and permanent implications to the economic and personal interests of property owners. The text below provides a general overview of riparian rights, based on Maryland law.  Riparian rights in the Eastern United States are very different from those in the West, and this article focuses on the East  For specific questions, please contact us directly.

Maryland’s Court of Appeals has described riparian rights as follows:

“It is well established that the title to land under navigable water is in the State of Maryland, subject to the paramount right of the United States to protect navigation in the navigable waters.

The owner of the fast land, however, has a common law right to land formed by accretion adjacent to the fast land and has the right of access to the navigable part of the river in front of his fast land, with the right to make a landing, wharf or pier in front of his fast land, subject, however, to general rules and regulations imposed by the public authorities necessary to protect the rights of the public.

When the statutory law grants the right to a riparian owner to extend his lot or to improve out to the limits prescribed by the public authorities, the riparian owner receives a ‘franchise-a vested right, peculiar in its nature but a quasi property of which the lot owner cannot not be lawfully deprived without his consent.’

When the lot owner makes improvements in front of his lot, complete title then vests in him in the improvements provided it is in front of his lot and does not appropriate the riparian rights of his neighbors.”

Parsing the language, one finds the following principles.

1. The State owns the land under the water, and the United States has an overriding interest in preserving public navigation.

2. The waterfront property owner has the right to accretion (such as a beach deposited by currents) and access, but a government may regulate access such as piers and wharves to assure that public rights are protected.

3. The right to extend and improve, where granted, transfers with the property.

4. The right to extend and improve does not allow a landowner to intrude on his neighbor’s rights.

5. The riparian owner has the “right of access” to and from the waters.

Since everyone has neighbors, the relative rights of one’s neighbors can become an issue, as can the extent of the government’s right to regulate. And such issues can and do evolve into open disputes. If you find yourself in conflict, there are some immediate steps that must be taken. First, be aware that your rights could be foreclosed by the statute of limitations. In Maryland, the general statute of limitations is 3 years. In some cases, however, a contract may extend or shorten the period in which action must be taken. It is even possible (through a doctrine known as adverse possession) for title to pass after 20 years of possession. Second, document the facts: take pictures; obtain copies of and permit applications; find public records. Many cases are determined by who marshals the facts first – the head start can be crucial. Also – and this may need to be your first step – consult a lawyer. A lawyer’s time can be expensive – but not when compared to the cost of losing forever the rights attendant to waterfront property.

Marina Purchase in Maryland

The purchase of any Maryland business can be a complicated process.  The purchase of a marina on the Chesapeake or the Coastal Bays, however, adds a number of issues that are specific to the marina’s position on the waterfront.  There are few other businesses where access must be considered from both the land and the water; where environmental regulations and controls are of such immediate consequence; and where a love for the water can be as much of a driving force as business considerations.  The list below is a truncated version of the checklist that we use at Waterfrontlaw to assist purchasers and sellers in organizing for a purchase or sale.

If you are considering a purchase or sale of a marina, we urge you to review the list below, formulate a plan of attack, and then to bring the transaction to our attention.  We can help with identifying the areas of risk that require additional research.  We can help with identifying poor transaction partners or troublesome real property before too many resources are expended.  And, of course, we can assist with preparing the papers that will form the core of the transaction.  In many cases, we may already have first hand knowledge of the property in question.

Due Diligence Documentation

Due Diligence CategoryDocumentation TasksellerPurchaserStatus/notes/ assigned to
Business Plan, Corporate Structure, Financing
Business planCurrent five-year business plan
Corporate organizationArticles of incorporation (name, address, resident agent)
Bylaws
Recent changes in corporate structure
Parent, subsidiaries, and affiliates
Shareholders’ agreements
Minutes from board meetings
Corporate representationPost formation representation – conflict waiver – explanation of obligations.
ShareholdersCurrent shareholders, including number of shares owned, dates that shares were acquired, considerations received, and contact information
Number of outstanding shares
Stock option plan
Samples of common and preferred stock certificates, debentures, and other outstanding securities
Warrants, options, and other rights to acquire equity securities
Relevant private placement memoranda and other offering circulars
LendersBank lines of credit, loan agreements, or guarantees
Loan defaults or expected defaults
Recent corporate transactionsDescription and rationale for each transaction
Purchase and sale agreements
Real Property and Environmental
Real PropertyDeed Search to confirm ownership or deed restrictions
Neighborhood canvas – known problems; future issues with activities
Silting in/navigability
RegulationsBusiness licenses
Environmental permits
Workers’ health and safety permits
Environmental EngineeringCite reviewed for current permits; past environmental issues.
ZoningAnalysis of present zoning/need for future changes or variances
Contractual Documents
ContractsMajor contracts by product line
Support/maintenance contracts
Warranties and guarantees
Dockage Contracts
Mooring Contracts
Land Storage ContractsNote vessel owners rights to do or contract for their own service work
Other customer-related contracts
Supplier/Subcontractor contracts
Purchase Contract Issues
Assets and liabilities v. stock purchase
Warranties
Real property v. going concern
Due diligence period
Deposit – refundable v. non-refundable
Liens and creditors
Financial and Operations
Financial statementsThree years of historical statements and related documentation.

Marina Liability

This article is reprinted from the February, 2005 issue of Soundings-Trade Only, and reflects the author’s recollection of a panel discussion at the International Marina Conference in San Diego, California.  Mr. Schwenk was one of the panelists asked to address liability issues in the marina industry.  The suggestions given were necessarily of a general nature, since there were attendees from all over the world. In brief, those suggestions were: 1. Maintain best professional practices, as those reflect the best thinking in the industry; 2. Add language to one’s principal contracts to insulate your business from claims (these are “exculpatory clauses”); and 3. Make a timely, appropriate response to any problem that arises, or a small problem may spin out of control.

Liability Issues:  Fix the Problems, Avoid Lawsuits

Maintaining the “best professional practices” is called the surest way of staying out of court

By Lindsey Savin/Staff Writer

Soundings Trade Only, February, 2005

Liability issues are among a marina operator’s greatest concerns, and a panel of experts at January’s International Marina Conference in San Diego offers up some advice on how to cope with them.

The panel, moderated by Mick Bettesworth of Marina Developments Ltd. in the United Kingdom, included Mark Yearn of Universal Insurance Services; Dirk Schwenk of the maritime law firm Baylaw, LLC; and Jopie Helsen, owner of Sailor’s Wharf Yacht Yard in St. Petersburg, Fla.

Schwenk said prevention is the best approach.  Maintain the “best professional practices” possible, he said, and, “Fix the problems.”

Being certain you understand your insurance policies – what is covered and what is not – is also critical, Schwenk said.  “You need to have a good idea what’s in your contract.”

“Each facility has its own characteristics and can’t be put in a magic insurance or liability box,” Yearn said.  Still, he suggested, owners and operators can seek out specialists who can customize a facility-specific insurance program.

Because a customer can reverse charges on a credit card for up to 18 months after a transaction is made, Helsen suggested marina owners consider not accepting credit cards as a method of payment, or at the very least encouraging customers to use some other form to square up their bills.

“Taking almost anything other than a credit card is preferable,” Schwenk agreed.

Another suggestion raised by panelists was marina owners should always make sure the “added insured” box is always checked on a marina patron’s or independent contractor’s proof of insurance when presented to the facility owner.  “No good landlord would lease property to someone without proof of insurance, and [the renter should] add the landlord as an added insured,” said Schwenk.

Schwenk also suggested marina owners consider including exculpatory clauses in both their customer and supplier contracts.  These clauses, he said, “can have a chilling effect” on prospective lawsuits.  “They can stop some claims before they even start,” he said.

“Your contracts are the strength of your business,” echoed Yearn.  “The stronger your contracts are, the better off you’re going to be.”

In the end, probably the best preventative measure a marine owner can take to ensure limited liability is to fix problems at the facility as they occur and not wait for them to snowball.

Timely, appropriate response to those things is 99 percent of the battle,” Schwenk concluded.

Fences and Waterviews

In Maryland, there is an open question about whether a water view can be protected from being blocked by a neighbor.  A New York court has recently looked at this question in City of New York v. Gowanus Industrial Park.  This case raises the question of when and how a riparian rights holder is protected from someone else’s infringing upon their view.   The actual case is reproduced in its entirety below.  It confirms the basic tenants of riparian rights law — the riparian owner (in this case the City) has the right to require that a neighbor remove a fence or other structure which interferes with their riparian rights.  This case confirms that one of those rights is the right to a view of the water.  Its most interesting feature may be the fact that Gowanus actually owned the bottom of the basin in question, as well as the riparian rights along the other shore, and it therefore had some rights to limit the City’s use of and access to the waters.

— N.Y.S.2d —-, 2009 WL 2960912 (N.Y.A.D. 2 Dept.), 2009 N.Y. Slip Op. 06498

Supreme Court, Appellate Division, Second Department, New York.

CITY OF NEW YORK, respondent,
v.
GOWANUS INDUSTRIAL PARK, INC., appellant.

Sept. 15, 2009.
STEVEN W. FISHER, J.P., HOWARD MILLER, DANIEL D. ANGIOLILLO, and L. PRISCILLA HALL, JJ.

*1 In an action, inter alia, for a judgment pursuant to Environmental Conservation Law § 15-701(6) declaring that the defendant’s construction of a wall along the northern terminus of the Henry StreetBasin unlawfully interferes with the plaintiff’s riparian rights in and to the Henry Street Basin, and a mandatory injunction compelling the plaintiff to remove that wall or cause it to be removed, the defendant appeals, as limited by its brief, from so much of an order of the Supreme Court, Kings County (Miller, J.), dated June 27, 2008, as granted those branches of the plaintiff’s cross motion which were for summary judgment on the first cause of action declaring that the plaintiff has riparian rights in and to the Henry Street Basin, on the third cause of action declaring that the wall unreasonably interferes with the plaintiff’s riparian rights in and to the Henry Street Basin, on the sixth cause of action declaring that the wall constitutes a public nuisance, and for a mandatory injunction compelling the plaintiff to remove the wall or cause it to be removed, and to restore access to the Henry Street Basin, within 90 days of service of that order upon it, unless some other satisfactory arrangement could be reached between the parties to assure the plaintiff of its right, as a riparian owner, to gain access to the Henry Street Basin.

ORDERED that the order is affirmed insofar as appealed from, with costs, and the matter is remitted to the Supreme Court, Kings County, for the entry of an appropriate declaratory judgment.

In 1997 the defendant, Gowanus Industrial Park, Inc. (hereinafter GIP), acquired two parcels of real property-one consisting of certain bottomlands of the Henry Street Basin (hereinafter the Basin), a navigable body of tidal water, and another located above water level on the western side of the Basin.The plaintiff, City of New York, owns two parcels of real property located on the northern side of the Basin, which it operates as a park. In February 2002 GIP constructed a wall measuring 18 feet in height and 200 feet in length on the northern side of the Basin. The City commenced this action seeking, inter alia, the removal of the wall on the grounds that it unreasonably interfered with its riparian/littoral rights to the Basin, was unlawfully constructed, and constituted a private and public nuisance.

GIP moved for summary judgment and the City cross-moved for summary judgment. In an order dated June 27, 2008, the Supreme Court, insofar as relevant to this appeal, granted those branches of the City’s cross motion which were for summary judgment on the first cause of action declaring that it has riparian rights to the Basin, on the third cause of action declaring that the wall unreasonably interfered with its riparian rights to the Basin, on the sixth cause of action declaring that the wall constituted a public nuisance, and for a mandatory injunction compelling the plaintiff to remove the wall, or cause it to be removed.

*2 The City demonstrated its prima facie entitlement to judgment as a matter of law on its first cause of action for a judgment declaring that it possessed riparian rights in and to the Basin by establishing that its property directly abutted the Basin, a navigable waterway ( see Town of Oyster Bay v. Commander Oil Corp., 96 N.Y.2d 566, 571; Tiffany v. Town of Oyster Bay, 234 N.Y. 15; Mascolo v. Romaz Props., Ltd., 28 AD3d 617, 618; Bravo v. Terstiege, 196 A.D.2d 473, 475; see generally Winegrad v. New York Univ. Med. Ctr., 64 N.Y.2d 851, 853). Specifically, the City submitted, inter alia, Letters Patent for its property, indicating that it shares a common boundary with the Basin, and a certified 2002 City survey, which was also authenticated by affidavit, confirming that the City’s property directly abuts the Basin.

In opposition, GIP failed to raise a triable issue of fact as to the City’s entitlement to a declaration of its riparian rights. Specifically, the 2001 survey submitted by GIP was not in admissible form, as the 2001 survey was unsigned, uncertified, and submitted without an affidavit by the preparer of the survey, and thus could not support its contention that there was a strip of land between the Basin and the City’s property ( see Miller v. Powers, 53 AD3d 1125, 1127-1128; Dewey v. Gardner, 248 A.D.2d 876, 878).

The City’s right of access as a riparian owner is not absolute, but is qualified by GIP’s rights as the owner of the Basin ( see Town of Oyster Bay v. Commander Oil Corp., 96 N.Y.2d at 572; Hedges v. West Shore R.R. Co., 150 N.Y. 150, 158). When the parties’ rights are in conflict, the court must strike the correct balance ( see Town of Oyster Bay v. Commander Oil Corp., 96 N.Y.2d at 572). Additionally, what constitutes reasonable access is determined on a case-by-case basis, considering what is a reasonable, safe, and convenient accommodation of the riparian interests of the upland owner, here the City ( see, Town of Hempstead v. Oceanside Yacht Harbor, Inc., 38 A.D.2d 263, 264, affd 32 N.Y.2d 859).

In this regard, the City satisfied its prima facie burden of demonstrating that the wall unreasonably interfered with its riparian right of reasonable access to the Basin ( see Gucker v. Town of Huntington,268 N.Y. 43, 47-48; Tiffany v. Town of Oyster Bay, 234 N.Y. at 18-19; Arnold’s Inn, Inc. v. Morgan, 35 A.D.2d 987, 988). In support of its cross motion, the City submitted the affidavit of a manager of the City Parks Department and photographs of the wall which demonstrated that the wall-which was originally 18 feet in height and extends along the entire waterfront boundary-completely obstructs its riparian right of access to the Basin. In opposition, GIP failed to raise a triable issue of fact as to the reasonableness of the dimensions, placement, and configuration of the wall. GIP did not submit any evidence in admissible form to support its conclusory and unsupported allegations that the wall was necessary for public safety and to prevent trespassing ( see Alvarez v. Prospect Hosp., 68 N.Y.2d 320, 324).

*3 Contrary to GIP’s contentions, the mandatory injunction compelling it to remove the wall, or cause it to be removed, was not overly broad. A riparian owner, such as the City, has a right to equitable relief against material obstructions, including the abatement of an obstruction already constructed (see, Tiffany v. Town of Oyster Bay, 234 N.Y. 15).

GIP’s remaining contentions are without merit.

Since this is, in part, a declaratory judgment action, the matter must be remitted to the Supreme Court, Kings County, for the entry of a judgment, inter alia, declaring that the City of New York has riparian rights in and to the Henry Street Basin, that the wall erected by the defendant along the northern terminus of the Henry Street Basin unreasonably interferes with the City’s riparian rights in and to the Henry Street Basin, and that the wall constitutes a public nuisance ( see Lanza v. Wagner,11 N.Y.2d 317, 334, appeal dismissed 371 U.S. 74, cert denied 371 U.S. 901).

N.Y.A.D. 2 Dept.,2009.
City of New York v. Gowanus Indus. Park, Inc.
— N.Y.S.2d —-, 2009 WL 2960912 (N.Y.A.D. 2 Dept.), 2009 N.Y. Slip Op. 06498

END OF DOCUMENT