JEFFERSON CITY, Mo. — Lake area real estate and mortgage professionals influenced a political and legal victory for residential dock owners Tuesday when Missouri Governor Jay Nixon approved a bill turning boat docks to real property. The state currently classifieds residential boat docks as personal property.
H.B. 842, sponsored by Rep. Dennis Wood, R-Kimberling City, Mo., is on its way to the Secretary of State and will become effective Aug. 28.
"This bill defines "boat dock" as a structure for loading and unloading boats connecting real property to public or private water. A dock is real property, and the owner has riparian rights to the body of water in which it is located under certain conditions," according to the Summary of Truly Agreed Version of the bill.
Currently appraisers are required to itemize boat docks as personal property in accordance with state law. Freddie Mac and Fannie Mae have since the financial meltdown been unwilling to loan money for boat docks during residential real estate transactions. This all changes Aug. 28 when the State of Missouri begins to accept residential docks as “real property.” The National Association of Realtors, Missouri Association of Realtors, some congressmen and senators are currently persuading Fannie and Freddie to change their underwriting standards to reflect the new legislation.
However, the bill excludes most lake-area condos. The bill specifically defines "residential" as a structure with not more than four dwellings and contains no language specific to any real ownership of boat slips. The bill's language also excludes, "single dwelling units owned as a condominium or in a cooperative housing association, and vacant land classified as residential property." Since in most cases homeowners associations own docks and condo owners carry a lifetime lease for slips, the State of Missouri will not consider a boat slip as real property of the condo unit owner. It is unclear how this may impact Fannie's or Freddie's inclination to loan money to purchasers of boat-slip leases at lake area condo complexes.
Many condo developers are currently circumventing this issue by offering free boat slips as a buyer incentive.
In addition to making residential boat docks "real property," H.B. 842 also "revises the definition of "commercial real estate" as it relates to licensed real estate brokers and agents to include real estate on which no buildings or structures are located," according to summary of the committee version of the bill. "Supporters say that the bill removes an exclusion in the law that prohibits undeveloped land from being considered as commercial real estate. In many developing areas of the state, there is a lot of undeveloped land for commercial use. The bill allows this land to be appraised and listed as commercial real estate."
