Docks, Appraisals and Mortgage Lending

The below memo is from Agents University, which describes itself as “A Service of the National Title Insurance Company.” It discusses the treatment of docks in Missouri in terms of the valuation of a property. To some degree the text is specific to that state statute, however, the same principles are applicable in most jurisdictions. For a pier to be a valuable and permanent part of a property, the owner of the property must have riparian rights which allow the structure to be placed there, and it must be permanently attached to the land. The article was originally posted at http://news.agentstitle.com/?p=443.

Boat Dock Bulletin

Underwriting Bulletin

To: All Missouri Agents

From: David Townsend

Re: Boat Docks

Date: 9-9-2009

Missouri Agents:

The Missouri Legislature recently passed a new definition of “Boat Dock” for appraisal

purposes. Here is the new language:

339.503 (7) (a-c) of the Revised Statutes of the State of Missouri (RSMo), boat docks

may be legally defined as “real property” subject to the following conditions:

(a) The lender includes the boat dock as a fixture both in the lender’s deed of

trust and a uniform commercial code fixture filing under section 400.9-502,

RSMo;

(b) The boat dock is attached to the real property by steel cable, bar, or chain

that is permanently imbedded in concrete or rock, and otherwise securely

attached to the dock; and

(c) The owner of the dock has riparian rights by means of real estate rights

bordering the body of water, including such rights by license, grant, or other

means allowing access to the body of water, which access may be seasonal

because the water may be reduced for electric power production or flood

control;

This new definition is designed to allow lenders to lend money based on an appraisal that

includes the dock. You will note the above requirements for a dock to be considered real

property.

(a) The lender includes the boat dock as a fixture both in the lender’s deed of

trust and a uniform commercial code fixture filing under section 400.9-502,

RSMo;

According to this definition, the lender must include the boat dock as a fixture both in the

DOT and file a UCC fixture filing.

(b) The boat dock is attached to the real property by steel cable, bar, or chain

that is permanently imbedded in concrete or rock, and otherwise securely

attached to the dock;

The dock must also be permanently affixed to the land as stated above.

(c) The owner of the dock has riparian rights by means of real estate rights

bordering the body of water, including such rights by license, grant, or other

means allowing access to the body of water, which access may be seasonal

because the water may be reduced for electric power production or flood

control;

The owner of the dock must have riparian rights and the ability to place a dock in the

water. This could be in the form of an easement, license, or other right.

All three of these items must be met before the property can be considered real property

under the statute.

Due to the complex nature of determining if the dock is personal or real property and the

ability to move or remove docks, Agents National Title Insurance is unable to insure boat

docks under this statute. Any mention of the dock must be removed from the insured

legal description in both the owners and lenders policies.

It is important that you examine the contract, lender instructions and other documents for

requests for coverage of docks. You must alert the requesting party that you are unable to

provide coverage for the dock.

Furthermore, any “legal description” of a dock must be redacted to remove mention of

the dock on Schedule A of the policy. The legal could list the dock, the UCC, or both.