I've mentioned before that the bank needs a slew of information before they'll even considering approving a construction loan. Well, the hot new item is something called a shared well agreement.
R and his brother own a 40 acre parcel with an existing home, where their parents currently live. In order to build a new home, we need to split the existing 40 acres, because the township says you're only allowed one residence per lot.
So, we'll split the parcel. We weren't thrilled about it, but we got all the paperwork completed and thought we were good to go. We plan to install a separate septic system for the new house, but we
want to tap into the existing well, located at his parent's house. This well was drilled in the
1970's, and it was expensive. It's very deep, something
to the tune of 500 feet. It's been tested and the water quality is
great, and the flow rate is enough to support two households (trying my best not to sound too much like an engineer right now... ha!). Not to mention the incredible savings. We never did receive a quote, but we were estimating well over $10,000 for a new well.
The bank needs some guarantee that our new property can't be cut off, with no water supply. They're funding the project and requiring a legal agreement between the new & existing parcels. Fine, we say. We will get a legal document drafted between R and himself. It's a little silly now, but the bank needs some guarantee that 30 years down the road, if we sold the house, it would maintain access to water.
Anyone else ever have to deal with legal agreements with themselves? Or shared well agreements?