You’ve got the plans for new development, and you know exactly where you want to bring it to life. You prospect a few plots before settling on the perfect one: an ideal site in an up-and-coming area. There’s just one problem: the site has an easement against it.
Easements represent a conflict between usage rights and ownership rights, and they can quickly cause big headaches for developers. Worse still, easements aren’t always apparent without a little investigation, which makes it important for developers to fully survey a site and make sure there aren’t any registered (or informal) easements to contend with.
Here’s a closer look at easements: what they are and how they can affect even the best-laid development plans.
Easements explained
As mentioned, easements involve a conflict between land ownership and land usage, split between two or more parties. The best way to explain how an easement works is through an example.
Let’s say that you own a parcel of land adjacent to a municipal substation. To get to the substation, city officials need to use an access road that runs through a small portion of your property. This lays the foundation for the easement. You have ownership rights to the ‘dominant’ parcel of land, but the city has usage rights to the ‘servient’ piece of that land—in this case, the access road.
The fundamental argument behind an easement is that usage rights tend to trump ownership rights—largely because they involve land-use access. Municipalities recognize these ‘prescriptive rights’ because, without them, land-use access would be much more complicated. Thus, the parcel of land you buy with the intent to develop may have easement considerations that restrict you from developing it as you intended.
Note: Easements involving land-use access differ from developer easements that restrict or altogether prevent the development of a certain parcel of land. These developer easements fall into categories of affirmative or negative easements, which delineate the terms by which a whole parcel may or may not be developed for a specific use.
Important development considerations
The trouble with easements isn’t necessarily tied to ownership and access rights. For developers, the biggest issue is often determining whether there’s an easement in the first place! Knowing about an easement prior to purchasing land gives developers a chance to assess the situation and plan around the easement—or negotiate new terms. However, buying without knowledge of the easement can put developers in a precarious situation.
Identifying an easement starts by consulting the local Land Register. Formalized easement agreements will come noted in a description of the parcel of land in question and will usually include accompanying information about its terms. Unfortunately, a significant number of easements tend to be informal, which means there isn’t always information about them on record.
Most easements are established over time and become valid as a result. For instance, a landowner might allow his neighbor to pave a small juncture off of the main driveway instead of laying a brand-new one. Over time, the shared use of that main driveway lays the foundation for access rights and, thus, an easement. However, there’s no documentation—only an informal agreement between land owners. If and when either property sells, there’s potential for a legal battle if the new owners don’t recognize the same informal agreement.
Ultimately, developers need to be extremely thorough when investigating potential easements. This often includes working with experienced surveyors, diligently checking municipal land-use records, and consulting real estate legal professionals about easement rights.
What recourse do developers have?
So, what happens if there’s an easement (or multiple easements) against your ideal development site? Developers have a few options they can choose from:
- Investigate the usage rights for the ‘servient’ piece of land. In some cases, old easements aren’t necessary anymore, and developers can capture the entirety of a plot under ownership rights.
- If an easement is still valid (on record), it may be possible to negotiate directly with the usage rights holder to come to more amiable terms that align with the future development plans of that parcel.
- If there’s strong resistance from a usage rights holder, it’s possible to legally argue against an easement—especially informal ones. To maintain the easement, usage rights holders will need to prove their case under implied or prescriptive rights.
Each of these options comes with an increasingly complex approach to either eliminating the easement or adapting it to more amicable terms. In some cases, developers may find themselves without recourse, and in these cases, the best option might be to move on from a parcel. That said, in most cases, there are ways to overcome the obstacle an easement might present.
Easements are part of life (and development!)
Easements—both registered and informal—appear quite often in the world of land development. A seasoned land development consultant will know exactly how to investigate these claims and what to do if they’re valid. It pays to work with a highly experienced team to address easements proactively—before they become the chief obstacle in a development that’s already underway.