easement
“Do your due diligence” is the lesson learned from a recent Ohio appeals court decision in a case alleging that a seller fraudulently induced a buyer in a real estate transaction. The Seventh District Court of Appeals rejected the buyer’s claim, stating that the doctrine of caveat emptor or “let the buyer beware” negated the fraudulent inducement argument because it placed a duty on the buyer to examine all “conditions open to observation.” The court reasoned that the buyer could not blame the seller for fraud because the buyer had the duty to examine public records that provided accurate information about the property.
The case
The conflict arose from the purchase of 143 acres of land in Belmont County, negotiated by two attorneys representing the parties. The buyer was present throughout the negotiations and read all of the e-mail correspondences between the two attorneys. The parties agreed to a purchase agreement, the buyer ordered a title search for the property, and the purchase took place. The buyer later learned, however, that a third party held an easement and right-of-way on the property. The easement allowed surface activities such as locating pipelines and well pads and restricted some development activities by the buyer.
After learning of the easement, the buyer filed a lawsuit claiming fraudulent inducement by the seller. A fraudulent inducement claim arises when someone uses a misrepresentation to persuade another to enter into an agreement. The buyer argued that the seller was fraudulent because the seller’s attorney never mentioned the easement during the purchase negotiations. The trial court agreed and determined that through misstatements and concealment, the seller had committed fraud that was “aggravated, egregious and/or reckless.”
The Court of Appeals disagreed. The court explained that, despite the seller’s actions, the doctrine of “let the buyer beware” obligated the buyer to investigate and examine “discoverable conditions” about the property. The easement was discoverable, as it had been recorded in the county public records. Because the easement information was readily available and the buyer had the opportunity to investigate it, the buyer could not successfully claim fraudulent concealment, the court concluded. According to the court, the buyer could not justify reliance on the seller’s omissions about the easement when the easement itself was a public record that was available to the buyer.
What does this decision mean for property transactions?
We’re back to “do your due diligence.” For property purchases, due diligence is the process of investigating and evaluating the property before finalizing the sale. A purchase agreement should include adequate time for due diligence after initial terms are agreed upon. During the due diligence period, a buyer can take a number of actions to evaluate whether or how to proceed with the purchase, such as:
- Complete visual and physical inspections of the land and buildings.
- Verify who holds ownership interests in the property.
- Determine if there are any easements, deed restrictions, covenants, severed mineral rights, pipelines, leases or other types of legal interests and limitations.
- Identify zoning and access regulations that apply to the property.
- Investigate environmental issues.
- Identify availability of water and utilities.
Additional inquiries might be necessary, depending on the type and intended use of the property. Hiring an attorney and other professionals can ensure that due diligence is thorough and tailored to the type of property at issue.
The time and cost of due diligence might be painful, but the doctrine of “let the buyer beware” demands it. As the Court of Appeals stated, “a seller of realty is not obligated to reveal all that he or she knows. A duty falls upon the purchaser to make inquiry and examination.”
Read the Seventh District’s opinion in Durr Farms, LLC v. Siltstone Resources, LLC on the Ohio Supreme Court’s website at https://www.supremecourt.ohio.gov/rod/docs/pdf/7/2025/2025-Ohio-1942.pdf.
Tags: property law, contract law, due diligence, buyer beware, caveat emptor, easement
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It’s a common problem in Ohio: a dispute between two neighbors over connecting to a subsurface drainage tile system that crosses property lines. Can one neighbor cut off the other neighbor's access to a tile? Can one go onto the other’s property to maintain the tile? If one replaces their system, can they still connect to the other’s tile? Answers to neighbor drainage questions can be, like subsurface water, a little murky. But a recent appeals court decision on a Licking County drainage dispute provides a few clear answers.
The drainage system at issue. Landowner Foor’s clay subsurface drainage system had been on his farm for over fifty years. Foor’s system connected to a larger drainage tile that ran across neighbor Helfrich’s property and eventually emptied into a pond on Helfrich's land. Foor and his predecessors had used and maintained the line on Helfrich’s property prior to Helfrich’s ownership.
The dispute. Foor planned to replace his old system and also offered to replace the tile he connected to on neighbor Helfrich’s property. Helfrich refused the replacement. During installation of Foor’s tile, Helfrich dug up the tile area near the boundary and filled the hole with rocks and refuse, after which water welled up and flowed over the properties rather than through the tile on Helfrich’s property. Foor installed a standpipe on his side of the boundary. Helrich filed a complaint against Foor, claiming that Foor’s drainage was excessive and harmful. Foor responded by asking the court to establish his rights to a drainage easement and irrevocable license to use the property where the tile ran across Helfrich’s property. A jury ruled in favor of Foor, awarding him $30,000 in damages and both an easement and irrevocable license where the tile ran across Helfrich’s property.
The appeal. The Fifth District Court of Appeals affirmed two conclusions on the drainage rights of the two neighbors:
- First, the court held that Foor’s replacement of the pre-existing subsurface drainage system was not an "alteration" of the flow of surface water that would trigger Ohio’s “reasonable use” rule for drainage. The reasonable use rule allows a legal claim when an alteration of surface water flow causes an unreasonable interference with someone’s property. Because the newly installed tile did not increase the amount of water draining from Foor’s property and maintained the same amount of drainage that had occurred for over fifty years, the court concluded there was no “alteration” of surface water flow. Without an alteration, the reasonable use rule did not apply and Helfrich did not have a claim against Foor based on the reasonable use rule.
- Second, the court refused to overturn the jury’s award of a drainage easement and irrevocable license across Helfrich’s land to Foor. Helfrich argued there was not sufficient evidence for the jury’s verdict but the court disagreed. The jury determined that an “easement by estoppel” existed when Helfrich purchased the property, based on evidence that the easement was apparent and not hidden to Helfrich when he purchased the property; that Foor and his predecessors relied on the drainage access and had previously repaired the tile on the neighboring property; and that the prior owners of the Helfrich property had gone along with Foor’s maintenance and use of the drainage tile on their land. Likewise, the court held there was sufficient evidence to support the jury’s conclusion that the previous owners of the Helfrich property had granted the prior owners of the Foor property a “license” or right to enter their property and maintain the tile. The jury determined that substantial investment by Foor and his predecessors suggested that the license was intended to be permanent, and the appeals court found that sufficient evidence also existed to support that conclusion.
How does this affect future drainage disputes between neighbors? The Fifth District decision provides useful precedent for the difficult questions neighbor drainage disputes raise. The case supports the argument that a landowner has a legal right to maintain a subsurface drainage system that crosses property lines. As long as there is not an “alteration” of surface water flow and history shows prior use, reliance, and maintenance of the connecting tile line on a neighbor’s property, a landowner can be in a strong legal position for continued use and maintenance of the tile. Will other appellate courts agree with the Fifth District’s analysis, or will Helfrich ask the Ohio Supreme Court to review the decision? Answers to those questions, like subsurface water, are a little murky.
Read the Fifth Appellate District's decision in Helfrich v. Foor Family Investments.
Tags: drainage, subsurface drainage, ohio drainage law, reasonable use doctrine, easement
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