Buying vacant land in Vermont offers exciting possibilities. You may envision building your dream home, creating a family retreat, purchasing waterfront property, starting a farm, investing for the future, or simply enjoying recreational land for hiking, hunting, or maple sugaring.

Unlike purchasing an existing home, however, buying vacant land requires extensive planning and investigation. The value of a parcel depends not only on its beauty or location, but also on whether it can legally and practically be used for your intended purpose.

Many buyers make the mistake of assuming that because a parcel is advertised as a "building lot" or because neighboring properties have homes, they will automatically be able to build exactly what they want. Unfortunately, that assumption can lead to expensive surprises.

Questions involving zoning, wastewater permitting, wetlands, legal access, title issues, Current Use enrollment, restrictive covenants, environmental regulations, subdivision potential, and numerous other matters can dramatically affect a property's value and usefulness.

At Peet Law Group, we've represented buyers and sellers throughout Vermont in thousands of real estate transactions. We've seen firsthand how careful due diligence before signing a purchase contract can help buyers avoid costly mistakes and move forward with confidence.

This guide discusses many of the legal and practical issues that should be considered before purchasing vacant land in Vermont.

Why Buying Vacant Land Is Different From Buying an Existing Home

When purchasing an existing home, much of the uncertainty has already been resolved.

The home has likely been occupied for years. Utilities are connected. Water and wastewater systems are functioning. The driveway exists. The home generally complies with applicable zoning regulations. The property's use has already been established.

Vacant land is different.

With undeveloped property, you're not purchasing a finished product. You're purchasing the opportunity to create one.

Whether that opportunity becomes reality depends on many factors that should be investigated before the purchase becomes final.

A beautiful parcel may ultimately prove unsuitable because:

• It cannot support a septic system.
• Local zoning prohibits the intended use.
• Wetlands significantly limit development.
• Shoreland regulations restrict construction.
• Legal access is inadequate.
• Restrictive covenants prohibit further subdivision.
• Significant portions of the property lie within setback areas.
• Engineering costs are substantially higher than anticipated.
• Future development triggers additional permitting requirements.

Many of these issues are not obvious during a casual walk across the property.

Start With One Simple Question

Every vacant land purchase should begin by answering one question:

What do you intend to do with the property?

The answer drives nearly every aspect of the due diligence process.

For example, someone purchasing recreational land may care primarily about access, hunting rights, timber value, and Current Use enrollment.

Someone planning to build a primary residence will likely focus on wastewater permits, water supply, zoning, setbacks, financing, utility availability, and construction costs.

An investor may be most interested in future subdivision potential, appreciation, and development opportunities.

Your intended use should determine what investigations are appropriate before closing.

The Purchase Contract May Be the Most Important Part of the Transaction

Many buyers think the closing is where the important legal work occurs.

In reality, one of the most important stages of a vacant land purchase often occurs before the purchase contract is signed.

Unlike the purchase of an existing home, vacant land frequently requires numerous investigations that cannot be completed overnight.

Engineering studies, soils testing, title review, zoning research, wetlands evaluations, surveys, financing approvals, and other investigations may take weeks or even months.

Without properly drafted contract contingencies, a buyer may become legally obligated to purchase property before determining whether it can actually be used as intended.

Attorney Tip

One of the best investments a land buyer can make is consulting a Vermont real estate attorney before signing the purchase contract. An attorney can often recommend due diligence contingencies tailored to the specific property and your intended use rather than relying solely on standard contract language.

Due Diligence Is More Than a Home Inspection

When purchasing an existing home, buyers often focus on the home inspection.

Vacant land due diligence is much broader.

Depending on the property, buyers may need to investigate:

• Local zoning
• Wastewater permitting
• Potable water supply
• Soils testing
• Wetlands
• Shoreland restrictions
• Flood hazards
• Current Use enrollment
• Act 250
• Easements
• Restrictive covenants
• Surveys
• Legal access
• Utilities
• Road maintenance
• Stormwater requirements
• Title issues
• Environmental concerns
• Financing
• Future subdivision potential

Every property presents a unique combination of issues.

Twenty Questions Every Vermont Land Buyer Should Ask

Before purchasing vacant land, consider asking questions such as:

1. Can I legally use the property for my intended purpose?
2. Does local zoning permit that use?
3. Is there an existing Wastewater System and Potable Water Supply Permit?
4. If not, can one reasonably be obtained?
5. Will the property support an on-site septic system?
6. Is there an adequate water supply?
7. Is the property enrolled in Current Use?
8. What happens if land must be withdrawn from Current Use?
9. Does Act 250 apply now or could it apply because of my plans?
10. Are wetlands present?
11. Is the property subject to the Shoreland Protection Act?
12. Does the property have legal access?
13. Are utilities reasonably available?
14. Are restrictive covenants recorded?
15. Can the property be subdivided in the future?
16. Is a survey advisable?
17. Are there easements affecting development?
18. Will stormwater permits be required?
19. Can the purchase and future construction be financed?
20. Does the title reveal any issues affecting ownership or development?

Each question deserves careful investigation.

Begin With Local Zoning

One of the first investigations should involve determining what local zoning regulations permit.

Every Vermont municipality has its own zoning regulations, and those regulations can differ dramatically from one town to another.

Buyers should determine:

• Whether the intended use is permitted.
• Whether the use requires conditional approval.
• Minimum lot size requirements.
• Minimum road frontage.
• Maximum building height.
• Density limitations.
• Home occupation rules.
• Agricultural exemptions.
• Accessory dwelling unit regulations.
• Commercial restrictions.

A parcel that appears ideal may not be suitable for your intended project if zoning restrictions prevent the proposed use.

Can Your Building Actually Fit?

Even if zoning allows your intended use, setback requirements may substantially reduce the buildable area.

Applicable setbacks may include:

• Front yard setbacks
• Rear yard setbacks
• Side yard setbacks
• Shoreline setbacks
• Wetland buffers
• Utility easements
• Road rights-of-way

The combination of these restrictions can significantly reduce where a home, garage, driveway, or other improvements may be constructed.

Wastewater System and Potable Water Supply Permits

One of the most important questions for many Vermont land purchases is whether the property already has a valid Wastewater System and Potable Water Supply Permit.

If a permit exists, buyers should determine:

• Whether it remains valid.
• Whether construction has already occurred under the permit.
• Whether the permit authorizes the buyer's proposed project.
• Whether amendments will be required.
• Whether any permit conditions affect future development.

A permit issued years ago may not necessarily accommodate the home design, driveway location, or future plans envisioned by the buyer.

What If No Permit Exists?

If no wastewater permit has been obtained, additional investigation may be necessary before determining whether the property can support development.

Depending upon the circumstances, buyers may wish to consult a qualified engineer regarding:

• Test pits.
• Soil characteristics.
• Site limitations.
• Suitable septic system locations.
• Potable water supply.
• Overall feasibility.

While many undeveloped parcels are suitable for construction, not all are.

The inability to obtain necessary wastewater approvals may substantially affect the property's value and intended use.

Attorney Tip

Do not assume that because neighboring properties have homes, your property can necessarily obtain the same approvals. Soil conditions, topography, setbacks, wetlands, and other site-specific factors may produce very different results.

Current Use Enrollment

Many larger Vermont parcels are enrolled in the Use Value Appraisal Program, commonly referred to as Current Use.

The program may substantially reduce annual property taxes by valuing qualifying agricultural and forest land based upon its current use rather than its fair market development value.

Current Use can provide significant tax savings, but buyers should understand how the program may affect future plans.

Questions worth asking include:

• Is the property currently enrolled?
• Will enrollment continue after closing?
• Does the buyer intend to continue qualifying?
• Will construction require withdrawing some or all of the property?
• Could withdrawal trigger a Land Use Change Tax?
• Can only a portion of the property be withdrawn while leaving the balance enrolled?

A buyer planning to build a home on Current Use property should understand the potential tax consequences before purchasing.

Can the Property Be Further Subdivided?

Even buyers planning to build only one home should consider whether the property could someday be subdivided.

Future subdivision potential may significantly affect long-term value and marketability.

Questions to investigate include:

• Does zoning permit additional lots?
• What are the minimum lot size requirements?
• Is sufficient road frontage available?
• Can each future lot obtain wastewater approval?
• Are additional municipal approvals required?
• Do restrictive covenants prohibit further subdivision?

The answer may not matter today, but it could become very important years from now if your plans change or future buyers view subdivision potential as a valuable asset.

Legal Access Matters More Than You May Think

Many Vermont properties are located on quiet country roads, private roads, or rights-of-way.

Before purchasing land, buyers should determine whether the property enjoys legally enforceable access.

Important questions include:

• Is the property served by a public highway or a private road?
• Is access established by deed?
• Does a recorded easement exist?
• Who is responsible for road maintenance?
• Are maintenance costs shared?
• Is access available year-round?
• Will a driveway permit be required?

Owning beautiful land is of little value if legal or practical access becomes a problem.

In addition, buyers should understand that physical access and legal access are not always the same thing. A visible driveway or trail crossing neighboring land does not necessarily establish a legal right to use it.

Surveys and Boundary Issues

Many Vermont properties have never been surveyed using modern surveying standards.

Although a survey is not required for every transaction, buyers should consider whether one is appropriate.

A survey may help identify:

• Boundary lines.
• Property corners.
• Encroachments.
• Rights-of-way.
• Easements.
• Acreage discrepancies.
• Fence line issues.
• Potential boundary disputes.

Survey information often becomes particularly valuable before constructing improvements near property lines.

Wetlands Can Significantly Affect Development

Wetlands are an important natural resource throughout Vermont and are protected under state and, in some cases, federal law. While wetlands provide valuable environmental benefits, they can also affect where and how improvements may be constructed.

Not every wet area is a regulated wetland, and not every regulated wetland completely prohibits development. However, wetlands and their associated buffer zones may limit where buildings, driveways, septic systems, utilities, or other improvements may be located.

If wetlands are suspected, buyers should consider whether additional evaluation by a qualified wetlands professional is appropriate before purchasing the property.

Attorney Tip

A property can have ample acreage but very little usable building area if wetlands, setback requirements, steep slopes, and easements overlap. Always evaluate the property's buildable area, not just its total acreage.

Waterfront Property and Vermont's Shoreland Protection Act

Many buyers are drawn to Vermont's beautiful lakes, ponds, and rivers. Waterfront property often commands premium prices, but it also comes with additional regulations.

The Vermont Shoreland Protection Act generally regulates certain activities within protected shoreland areas adjacent to many lakes and ponds. Depending on the proposed project, restrictions may apply to clearing vegetation, grading, construction, and other land-disturbing activities.

If you are purchasing waterfront property, determine:

• Whether the property is subject to the Shoreland Protection Act.
• Whether permits or approvals may be required before construction.
• Whether vegetation clearing is restricted.
• Whether shoreline stabilization work requires approval.
• Whether existing improvements comply with applicable regulations.

A waterfront lot may still be an excellent purchase, but buyers should understand these additional requirements before closing.

Is the Property Located in a Flood Hazard Area?

Many Vermont buyers are attracted to land near rivers, streams, lakes, and other scenic waterways. While these locations can offer beautiful views and recreational opportunities, they may also present additional challenges if all or part of the property is located within a designated flood hazard area.

Before purchasing vacant land, buyers should determine whether any portion of the property is located within a mapped flood zone or flood hazard area. Even if the proposed building site appears to be outside the floodplain, flood hazard areas may still affect access roads, driveways, utility installations, septic systems, or future expansion plans.

If a property is located within a flood hazard area, buyers should investigate questions such as:

• Is the proposed building site located within the flood hazard area?
• Will local zoning or flood hazard regulations restrict construction?
• Will a flood hazard permit or additional approvals be required?
• Can the home be constructed outside the floodplain?
• Will the location of the septic system or well be affected?
• Will a lender require flood insurance as a condition of financing?
• How might flood hazards affect future resale value?

Even if development is permitted, building within or near a flood hazard area may increase construction costs. Elevation requirements, engineering, drainage improvements, and flood-resistant construction techniques may all become necessary depending on the property's location and the proposed project.

Flooding should also be considered from a practical perspective. Vermont has experienced several significant flooding events in recent years, reminding property owners that areas outside federally mapped flood zones may still experience localized flooding, erosion, or damage from severe weather. Reviewing historical flooding, local knowledge, topography, nearby streams, and drainage patterns can provide valuable insight beyond simply reviewing a flood map.

Attorney Tip

Don't assume that a property is free from flood-related concerns simply because it has never been developed. Before purchasing vacant land, consider reviewing applicable flood hazard maps, local flood hazard regulations, and any municipal records that may affect your intended use of the property. Understanding these issues before signing a purchase contract can help avoid unexpected construction costs, permitting delays, or financing challenges.

Will Act 250 Affect Your Plans?

Act 250 is one of Vermont's most well-known land use laws, but many buyers misunderstand when it applies.

Some buyers assume Act 250 applies to every property. Others assume it never applies to residential construction.

Neither assumption is correct.

Whether Act 250 applies depends upon numerous factors, including the property's history, previous development, location, ownership history, and the nature and scope of the proposed project.

For some buyers, Act 250 may have little or no effect.

For others, it may become one of the most significant regulatory considerations affecting future development.

Because the analysis can be fact-specific, buyers planning significant development should determine whether their proposed project could trigger Act 250 review or whether the property is already subject to an existing permit.

Restrictive Covenants Can Limit Future Use

Many parcels are subject to restrictive covenants recorded in prior deeds.

These private restrictions can sometimes be more limiting than zoning regulations.

Examples include restrictions on:

• Further subdivision.
• Commercial activities.
• Mobile homes.
• Livestock.
• Architectural standards.
• Minimum home size.
• Short-term rentals.
• Additional structures.

A title examination should identify recorded covenants affecting the property, allowing buyers to determine whether those restrictions are compatible with their intended use.

Easements May Affect More Than Access

Many buyers think only about driveway easements.

However, easements may grant others rights to:

• Cross the property.
• Install utility lines.
• Access neighboring land.
• Maintain drainage systems.
• Use recreational trails.

Likewise, your property may benefit from easements across neighboring land.

Understanding these rights before closing is an important part of due diligence.

Don't Overlook Title Examination and Title Insurance

A title search does much more than confirm ownership.

A thorough title examination may identify issues such as:

• Easements.
• Rights-of-way.
• Restrictive covenants.
• Boundary agreements.
• Mortgages.
• Judgment liens.
• Estate interests.
• Probate issues.
• Errors in prior deeds.
• Outstanding ownership claims.

Even after a careful title search, title insurance provides valuable protection against certain covered title defects that may not be discovered until after closing.

For most buyers, title insurance is a relatively small investment compared to the value of the property being purchased.

Utility Availability

Beautiful rural property may not have readily available utilities.

Before purchasing, buyers should investigate:

• Electrical service.
• Internet availability.
• Cellular coverage.
• Public water.
• Public sewer.
• Natural gas availability.
• Propane options.

Extending utility service over long distances can significantly increase development costs.

Stormwater Requirements

Many buyers focus only on the house they plan to build.

However, construction often creates impervious surfaces such as roofs, driveways, parking areas, patios, and walkways.

Depending upon the scope of development and applicable regulations, stormwater permitting or stormwater management systems may become necessary.

These requirements should be considered during the planning stage because they may affect project costs, site design, and construction schedules.

Timber and Clearing Restrictions

Many Vermont properties contain valuable timber.

Before purchasing wooded property, buyers should determine:

• Whether timber rights have previously been conveyed.
• Whether a forestry management plan exists.
• Whether the property is enrolled in Current Use as forest land.
• Whether timber harvesting restrictions apply.

Buyers should also understand that Vermont regulates certain timber harvesting activities. Depending on the size and nature of the proposed harvest, including clear-cutting, state laws and regulations may apply.

If your plans include extensive clearing for development, farming, or other purposes, be sure to understand any applicable requirements before work begins.

Environmental Concerns

Although many vacant parcels present no environmental concerns, buyers should remain alert for issues such as:

• Former dump sites.
• Underground fuel tanks.
• Agricultural contamination.
• Hazardous materials.
• Flood hazards.
• Erosion concerns.
• Steep slopes.
• Former industrial uses.

Environmental issues may increase development costs or affect future use of the property.

Construction Financing Is Different

Many first-time land buyers assume financing construction will be similar to obtaining a conventional mortgage on an existing home.

Construction financing is often quite different.

Lenders may require:

• Larger down payments.
• Construction plans and specifications.
• Builder approval.
• Cost estimates.
• Draw schedules.
• Periodic inspections before releasing funds.
• Conversion to permanent financing upon project completion.

Vacant land loans may also have higher interest rates and different underwriting standards than traditional residential mortgages.

Before purchasing land, buyers should speak with prospective lenders to understand financing requirements for both the land purchase and future construction.

Think Beyond Today's Plans

Even if you have no current intention of subdividing the property or selling it in the near future, consider how future buyers may view the land.

Questions worth asking include:

• Could additional lots be created?
• Will financing be available for future buyers?
• Will title insurance present any unusual issues?
• Are utilities sufficient for future development?
• Will zoning likely support future uses?

Thinking ahead may help preserve both flexibility and value.

Common Mistakes Buyers Make

Some of the most common mistakes include:

• Assuming a property is buildable because neighboring lots contain homes.
• Failing to investigate zoning before signing a contract.
• Assuming an old wastewater permit satisfies future plans.
• Overlooking Current Use tax consequences.
• Ignoring restrictive covenants.
• Assuming visible access is legal access.
• Not obtaining title insurance.
• Underestimating engineering and site development costs.
• Waiting until shortly before closing to consult an attorney.
• Using a purchase contract that does not adequately protect the buyer during the due diligence period.

Many of these mistakes can be avoided through careful planning before the purchase contract becomes binding.

Should I hire an attorney before signing a purchase contract?

For many vacant land purchases, involving a Vermont real estate attorney before signing the purchase contract allows potential issues to be identified while there is still an opportunity to negotiate appropriate contract protections.

The Value of Early Legal Guidance

Buying vacant land often involves far more uncertainty than purchasing an existing home. A beautiful parcel may ultimately require significant engineering, permitting, environmental review, or regulatory approvals before it can be developed as intended.

Many of the most important protections available to a buyer must be negotiated before the purchase contract is signed. Once a buyer becomes legally obligated to purchase the property, options for addressing unexpected issues may be significantly more limited.

At Peet Law Group, we encourage buyers to involve a Vermont real estate attorney early in the process. Depending on the transaction, we can assist with reviewing and negotiating purchase contracts, recommending appropriate due diligence contingencies, coordinating title examinations and title insurance, and helping buyers understand legal issues that may affect their plans for the property.

Whether you're purchasing a residential building lot, recreational land, waterfront property, farmland, timberland, or investment property, careful planning before closing can help you make informed decisions and reduce the risk of costly surprises.

If you're considering purchasing vacant land anywhere in Vermont, the attorneys at Peet Law Group would be pleased to help guide you through the process from contract review through closing.