Utility Debt Dispute, Wildlife Preserve, and Other Country Real Estate Issues

In this installment of a country real estate feature, a land law expert responds to questions about resolving a utility debt dispute and financing a wildlife preserve.


| December/January 1998



171-utility-debt-country-real-estate

The unspecified terms of a land sale agreement between sister and brother later resulted in a dispute with the brother's widow over payment of a utility debt.


ILLUSTRATION: LETICIA PLATE

The following questions bearing on country real estate law were submitted by readers.  


Utility Debt Dispute

Q. I purchased 80 acres in New Mexico. I sold 20 acres of the 80 to my brother and his wife. We were to have a well installed and the agreement was that the first $5,000 toward the installation was to be paid by my brother in exchange for the 20 acres, and the remaining cost of the well would be split between the two of us. 

I did not live on the land, as I was still working in Arizona at the time. After the agreement was made, my brother and his wife bought a mobile home and moved to the property. Shortly after, my brother requested power be brought to the property. He entered into this power agreement without my consent. In addition, the power company installed a service pole and an additional pole on my property without my knowledge or consent. After I became aware of this, I did not interfere, as my brother was in failing health and I did not want to upset him. My brother's health did not improve and, shortly after, he passed away. This is where the trouble began. My sister-in-law accused me of owing her money for the well and cheating her. It was only through litigation that I was able to resolve the problem and purchase the property back at fair market value. The warranty deed agreement indicated the land was free of any encumbrance. However, when I contacted the power company to have electricity provided to me, they indicated that my sister-in-law defaulted on the contract and that, in order to have power provided to me, l would have to pay off the contract my brother and sister-in-law entered into.  

My question to you is this: What legal obligation do I have to pay for a contract I did not enter into — for property that was not owned by me at the time? I've since purchased the land back, but now it appears I cannot obtain power without paying a debt I did not incur.  

— James R. Bishop,
New Mexico
 

A. Please accept my condolences on the loss of your brother. There are several issues here and this is a classic case of why agreements, even between family members, should be in writing. When agreements regarding land are first made, everyone believes they will clearly remember the terms and that conditions will never change to alter the situation. Over the years, however, even with sincere and honest people, memories sometimes become selective or fail entirely; usually this is not a conscious act. The illness and death of your brother created another unforeseen event. No doubt your sister-in-law was left in dire straits and had a difficult situation to deal with, along with bills she could not pay. Also, she may not have clearly understood the agreements you had with your brother from the beginning. And perhaps your brother had the power installed on your part of the property, as well as his own, and planned on paying for both as a favor to you.





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