Negotiating Easements

An easement is a right to use or control a portion of one parcel of real estate for the benefit of another parcel.  An important distinguishing point between easements and most other agreements is that easements actually benefit and burden the parcels of property (not the owners of those properties), and easements therefore “run with the land”, meaning that a subsequent owner of the property gets the benefits and the hardships that are associated with easements on the property.  Because of this an easement and the impact that comes with it can generally be thought of as “permanent”.

Clients frequently approach us regarding obtaining easements in a neighbor’s property or alternatively, dealing with a neighbor who seeks an easement in the client’s property.  Sometimes these easements are for vehicular or pedestrian access.  Other times they are for a certain type of use, for example, the right to put up a fence, run a sewer line, run a fiber optic line, or, rather frequently, the right to park on a neighboring property.

If  you are asked to grant an easement in your property, you should be aware that the proposed easement becomes an encumbrance on your property that will affect not only your use of the property, but that of any purchaser of your property–which means that it will affect your eventual sales price.  Care should be taken to ensure the exact placement of the easement and to limit the uses to which the easement may be put. Attention should be paid as to who must maintain the easement, both in terms of who does the maintenance work and who pays for it, and what sort of surface or structure may be installed in the easement area.

If you are granting an easement you would also want to be paid for it.  In reaching a price, you should consider how the easement impacts your use and how it impacts the value of your property.  You also should give consideration to how valuable the easement is to your neighbor.  Many real estate lawyers can tell stories, particularly in the commercial context, of landowners who “pressed their advantage” to obtain astronomical payments for easements  that allowed a neighbor to develop his or her property more profitably.

There are also less invasive alternatives to easements that the granting party should consider.  You can give your neighbor a “license” rather than an easement.  This is like an easement but is “personal” to your neighbor; thus, it does not pass to a buyer of your neighbor’s property.  You can also limit the length of time a license lasts.  Finally, in some instances, you could grant your neighbor a lease to use a certain part of the property for a particular purpose for a given time and rental.  In summary, a landowner should not move too quickly or give away an interest in land too cheaply; the costs and options should be weighed.

If you are the party asking for an easement over your neighbor’s property, the same care must be taken.  Now you want to be sure that the document is properly signed by the actual landowner that is giving the easement (this can only be guaranteed by reviewing the neighbor’s deed and ideally doing a title search of the neighbor’s property).  You also want to ensure that the uses to which the easement can be put are documented as broadly as you require, and you want to pay the same close attention as the granting landowner to issues of location, maintenance and construction. Finally, you would want to ensure that the document establishing the easement spells out that the right granted “runs with the land.”  If the easement is important to you it will probably be important to someone who purchases the property from you.  If a future buyer knows that he does not have the benefit of a useful easement this will impact the sales price of the dominant parcel and might prevent a sale of the property completely.

As the beneficiary of an easement you will have other concerns as well.  If the property the easement crosses has a mortgage on it you will want to insist that the mortgage lender also join in the easement agreement.  Otherwise, if the bank forecloses on your neighbor’s property under a mortgage that pre-dates your easement, you could very likely lose the easement at the foreclosure sale.  In dealing with this particular problem, there is no substitute for obtaining a title report for the property on which the easement is to be placed.  Finally, you need to ensure that the easement agreement is properly recorded and indexed with the Recorder of Deeds.  Payment of transfer taxes may be required.

Easements can have a dramatic effect on property use and property values.  Much of the law governing easements is very old and it takes unexpected twists and turns.  During the past four hundred years, English and then American courts created the general rules of how an easement is established, how they are extinguished and how easement language is interpreted. In some circumstances courts have even created doctrines where easements would be recognized without any agreement by the parties ( a subject for a later article).  Before you jeopardize the use and value of your property by granting an easement you should consult with a lawyer.  That advice is equally valid if you are seeking an easement from your neighbor or if you intend to purchase a property that you think needs an easement.

— Rod Fluck

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