TOPEKA, KAN. (RFD NEWS) — Property rights are fundamental to farming and ranching, but ownership can become complicated when family disputes, easements, property taxes and government decisions enter the picture.
Roger McEowen of the Washburn School of Law joined us on Tuesday’s Market Day Report to discuss his recent review of several court cases that highlight the challenges farmers and ranchers can face with their land.
In his interview with RFD News, McEowen first discusses a case involving a South Dakota family farming operation and more than $3 million in farmland that was sold from an estate.
According to McEowen, one family member objected to the sale and tried to challenge the transaction on behalf of the corporation. However, the court determined he lacked legal standing because he was not a shareholder, director, or officer.
He later sought rescission of the contract, but the court again ruled against him because he was not a party to the agreement.
McEowen says the case highlights the importance of understanding how farms and other assets are organized in estate planning.
“We really have to pay attention to these organizations that we form from an estate planning standpoint,” McEowen said.
Easements Can Limit Property Rights
Another case, this time from Texas, focused on an easement for electric transmission lines.
The ranch had been purchased in 1947 with a visible easement for transmission lines crossing the property. The easement itself was not disputed, but the utility later dramatically increased the number of poles and transmission lines on the property.
The landowner challenged the expansion, citing concerns including the impact on the property’s viewshed.
The Texas Supreme Court ultimately determined that while an easement existed, its terms did not authorize the development that occurred. The court found the expansion constituted a trespass.
McEowen says the case reminds landowners to carefully review easement documents and understand what activities they actually allow.
Property Taxes and Valuation
Property-tax valuation can also significantly affect agricultural landowners.
McEowen pointed to an Arizona case involving a ranch where the county appraiser added thousands of dollars per acre to the property’s value for trees and vines.
The court determined the additional valuation was improper because the income approach used to value the property had already accounted for the value of the trees and vines.
The case shows why landowners need to look beyond the final assessed value and understand how it was calculated.
“The methodology that your appraiser is using is very important,” McEowen said.
He noted that property-tax valuation is a contentious issue in many agricultural states, including Kansas and Nebraska.
Government Decisions Can Change
Another case from New Mexico involved a farming operation that purchased property with plans to eventually develop it into smaller tracts.
The county’s zoning and planning commission initially approved the proposed development. However, the county later reversed course, citing water concerns, which significantly reduced the property’s potential value.
The court never ultimately addressed whether the government could make that change because the case was dismissed on procedural grounds.
Still, McEowen says it demonstrates an important point for farmers and ranchers: property rights and development options can change over time.
The rights available when land is purchased may not necessarily be the same rights available years later when an owner wants to change how the property is used.
Know Your Rights Before Problems Arise
While the cases involved different circumstances, McEowen says they share a common lesson for agricultural landowners: understand the documents and legal structures surrounding your property before a dispute arises.
That includes estate-planning documents, corporate structures, easements, property-tax assessments and local zoning regulations.
For farmers and ranchers making long-term land investments, understanding those details can help protect both the property’s value and their ability to use it in the future.
READ MORE: Property Rights on the Farm - Firm to Farm
