Licensee Rosa is representing a buyer who wants to purchase a parcel near Anchorage. During due diligence, title research reveals the property was originally conveyed out of state ownership and the deed contains language stating 'surface rights only.' The seller insists the property can be used for any purpose, including drilling a water well. Which of the following statements best reflects Rosa's professional obligation in this situation?
Correct Answer
A) Rosa should disclose to the buyer that the deed conveys only surface rights and recommend the buyer consult an attorney regarding the scope of permitted uses and well-drilling rights
When title evidence reveals that a deed conveys only surface rights, a licensee has a professional duty to disclose this material fact to the buyer and recommend the buyer seek legal counsel. The scope of a 'surface rights only' conveyance — including whether it affects the right to drill a water well — is a legal question that varies depending on how Alaska courts interpret the deed language and what rights the state retained. Rosa cannot simply accept the seller's representation or dismiss the issue. Disclosing the limitation and recommending an attorney is the correct professional response consistent with Alaska licensee duties under 12 AAC 64.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Tenancy by the entirety is a form of co-ownership available only to married couples that includes the right of survivorship and protection from individual creditors. Neither spouse can unilaterally sell or encumber the property.
Tenancy in common is a form of co-ownership in which two or more persons hold separate, undivided interests in property without the right of survivorship. Each owner can hold unequal shares and can independently transfer their interest.
A freehold estate conveys ownership rights, while a leasehold estate grants the right to possess and use property for a specific period without ownership.
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