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“Lakefront” Buyers Beware

June 17, 2014
Riparian Rights Blog Post

Photo of a lake with a red circle with a line through itReal estate listings frequently contain statements regarding "deeded access," "lake frontage," "lake rights" or similar assurances of the ability to use a lake. Those terms mean different things to different people and no one should blindly rely upon such representations when purchasing real estate. These "promises" may be based on:

  • Historical usage, which the law may not recognize or protect;
  • A plat, which grants limited or non-exclusive rights;
  • A private easement, the purpose of which may limited and will likely not include the right to erect a dock or moor boats overnight; or
  • Mere proximity to a lake or other waterbody.

In Jenson v William B. Gallagher Revocable Trust, the plaintiffs thought they were purchasing land with fifty feet of lake frontage, as represented in the real estate "agent detail report." After closing the plaintiffs discovered that while the land was near a lake, it had no frontage on the lake. The trial court dismissed the plaintiffs' fraud claim based upon merger and integration clauses contained in the sales agreement. The contract contained the following language, similar to that found in many standard real estate purchase agreements:

"It is further understood that no representations or promises have been made to Buyer by real estate brokers or salespersons or by the Seller other than those contained in this agreement or as otherwise made or given by the Seller to the Buyer in the written disclosure statement."

The Michigan Court of Appeals reversed the trial court, providing the plaintiffs with an opportunity to prove they were fraudulently induced into signing the contract based on a false promise of lake frontage.  Thus far the Plaintiffs have "won" only an opportunity to return to Court, spend more money, and hope for a favorable outcome. Win or lose, this court battle could have been avoided. Before purchasing lakefront property, or property with promised rights to a lake, get some advice to understand what you are purchasing.

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