Property Rights restricted by Supreme Court of Wisconsin in waterfront case

March 9, 2020   Robert Gmeiner

  • Property, Markets & Trade
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The Supreme Court of Wisconsin recently ruled that frontage along a man-made body of water does not entitle the property owners to riparian rights that permit construction of piers and docks.  Ordinarily, property owners with frontage along a body of water have these riparian rights in Wisconsin and many other states and may construct these waterfront facilities.  However, the Court has held that riparian rights only include construction rights if the lakebed is owned by the state or if the property owner with frontage also owns a portion of the bed, which is generally the case in rivers.  Lakebeds are often owned by the state only when the lake is naturally occurring. In the case in Wisconsin, the lakebed was clearly privately owned. There was a public right of access to and use of the water, the Court ruled, but this did not include a right to build.  Importantly, there was no question of ownership of specific parcels of property in this case.  The only issue before the court was the extent of property rights.

This issue only came before the courts of Wisconsin because of a property dispute.  Such disputes have evidently been rare.  Needless to say, the Court’s ruling will have an adverse impact on many property owners who are no longer permitted to waterfront appurtenances like piers and docks on privately-owned lakebeds.  It is certain to affect property valuations, perhaps after some tax disputes, because these properties have generally been assessed for taxes assuming that waterfront construction was permitted.

A bill is now working its way through Wisconsin’s legislature to grant riparian rights of construction to these waterfront owners.  Opponents claim it is an unjust taking of lakebed owners’ property, but supporters say it codifies a presumption many waterfront owners had that was trampled by an errant court ruling.  Realtors, who benefit from higher property values and sale prices, have strongly supported the bill.

Taking existing property rights away from lakebed owners is not a solution to the Supreme Court ruling.  A reasonable solution is to leave property rights as they have been defined by the Court and assess taxes and assign liability accordingly.  Instead of assessing waterfront property owners as though their property rights included the right to build piers and docks, the owner of the lakebed should be assessed this way.  Likewise, the owner of the lakebed should bear liability for everything constructed.  This would give lakebed owners an incentive to charge waterfront owners for the privilege of building or they could deed the rights to them completely.  Property rights are a solution and, if taxes and liability go with the rights, private market transactions can handle these issues.