Exploring the Unique Aspects of Northern Michigan Waterfront Property

When it comes to real estate, you might think that purchasing or selling waterfront property in Northern Michigan follows the same path as any other property transaction. However, this couldn’t be further from the truth. Traverse City and Leelanau County waterfront properties come with a set of distinctive considerations that set them apart from standard real estate deals. Ignoring these differences when engaging in a purchase or sale of such properties can lead to significant risks down the road.

Waterfront properties are different, period.  These distinctions carry through the due diligence process, both before and after signing a buy/sell agreement and extending all the way to the closing and beyond. While the initial steps may appear similar – like signing the buy/sell agreement (aka purchase agreement), navigating through contingencies, arranging financing, and reviewing title insurance commitments – the reality of purchasing waterfront properties in Leelanau or Grand Traverse County reveals a vast difference.  


Let’s examine some of the key issues that typically arise in waterfront real estate transactions:  These issues rarely emerge in other types of property dealings:

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  • True Waterfront Nature: The foremost question is whether the property is genuinely waterfront (riparian). Sometimes, a “land gap” might exist between the parcel and the water, which can have legal implications.
  • Understanding Riparian Rights: Knowing the extent of the property owner’s riparian rights is crucial. These rights define what you can and cannot do with the water access.  For example, it’s very important to know about the “beach walker” case, which distinguishes affords different rights to waterfront property owners on Lake Leelanau, for example, an inland lake versus a waterfront property owner on Northport Bay, which is on a Great Lake (Lake Michigan).  
  • Deed Restrictions and Covenants: Deed restrictions or covenants might apply, impacting what you can build or modify on the property. While this can be the case anywhere, it tends to happen more often with waterfront property.  
  • Buildability of Vacant Land: For vacant properties, it’s essential to determine if the land is suitable for construction according to local regulations.  We run into this question quite often on Lake Leelanau, for example, because many of the remaining vacant lots appear to be wetlands as they approach Lake Leelanau.  This is why it’s important to get a wetland assessment, whether you’re a buyer or a seller of waterfront property.  
  • Navigating Lake Access Concerns: Potential problems may arise from lake access easements, neighboring road ends, parks, alleys, or walkways near the property.  In Northport, for example, there was a highly publicized dispute between a member of the public using the public access at the end of a Village Street and the neighboring private landowner.  These types of disputes happen quite much more frequently with waterfront property than with other properties.  
  • Homeowner Associations and Dues: Waterfront properties might be subject to a lake or riverfront property owners association with mandatory dues or assessments.
  • Special Assessments and Regulations: There could be specific assessments related to the body of water, binding the property to certain regulations. A statutory lake board might also be involved.
  • Water and Environmental Quality: Ensuring the health and cleanliness of the waterfront and body of water is vital to your investment.
  • Shoreline and Bottomland Conditions: The quality of the shoreline and bottomlands can impact your property’s value and use.
  • Boundary Disputes and Claims: Potential boundary line disputes or claims from neighboring property owners, such as adverse possession or easement rights, need to be addressed.  I showed a property recently on Starvation Lake in Kalkaska and the property lines and easement to the lake were interesting, to say the least!  
  • Water Level Variability: Fluctuating water levels can affect your property’s safety and usability. When it comes to the possible installation of a seawall to protect a home from rising lake levels, it’s a significant expense.  Dam regulations can also play a role here.  
  • Cottage and Floodplain Considerations: If your cottage or dwelling falls within a floodplain or flood zone, insurance costs and various issues come into play.  Check out this video (https://youtu.be/HKHfSgaeYEA) about how to find out if a property is in a FEMA Flood Zone.  
  • Navigating Wetlands: Understanding wetlands issues is vital due to legal restrictions and potential environmental impact.  Get a wetland assessment.  
  • Actual Waterfront Measurement: Determining the exact extent of waterfront on your parcel is crucial for valuation and development plans.
  • Zoning Regulations for Dwelling: Local zoning rules can influence whether you can expand or replace existing structures. 
  • Property Filling and Settling: Past property “filling” could lead to settling problems when building or expanding.
  • Local Municipal Regulations: Municipal regulations might dictate dock limitations, watercraft allowances, seawall constructions, and more.
  • Adjacent Bottomland Ownership: Clarifying ownership and usage limits of adjacent bottomlands is essential.

In Conclusion

Traverse City and Leelanau County waterfront properties present a tapestry of unique challenges and considerations. Understanding and addressing these matters throughout the purchasing or selling process is imperative for safeguarding your investment and ensuring your enjoyment of your waterfront home. Remember, when it comes to waterfront properties, the beauty comes with complexities that demand your attention.

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