Arsenic and Old Land
Those of us who still feel the lure of the open range after a sobering talk with our financial advisors may find the challenges have only just begun. Purchasing a ranch is complicated.

Ranch ownership rights are far more complex than those attached to most other types of real estate. Mineral or water rights may be deeded to someone other than the seller, even if he or she owns the title outright. For example, Funk has third rights to the water flowing off the mountains onto a ranch he owns in New Mexico, according to a land grant that goes back to 1868.

To unearth these often tangled ownership details and other potential liabilities, it is wise to do a thorough round of due diligence, reviewing the title, performing a phase-one environmental study, and scrutinizing water rights and fence lines. “There’s no survey to buy a ranch,” notes Fuller, the Denver-based real estate executive. “Ranchers have always done business with a handshake.”

There may be hidden dangers lurking beneath the surface as well. “I’ve seen properties where entire tractors were buried or even refrigerators,” says Kanaly. Sometimes land that appears pristine now was once a dump. There may be underground storage tanks prone to leaking, or old train beds and power lines. “One common thing that appears on working ranches is having a dipping vat for pesticides with arsenic in it,” says Bank of America’s Dunbar. “It’s very expensive to remove.” The environmental assessment is designed to unearth these issues before the acquisition is closed.

Many ranchers have conservationist leanings and see the restoration of their newfound properties to a pristine environmental condition as part of the challenge of developing this particular legacy. Kent eventually wants to place his land in trust to protect it from developers. “I want to keep it in the family,” he says.