If you’re considering purchasing commercial or investment property, it’s important to know whether an easement is attached to a parcel you’ve got your eye on. An easement gives someone else the legal right to use a portion of the property for a specific purpose. That kind of access can potentially complicate your plans and affect the property’s value, development potential and long-term profitability.
Easements can take many forms. Utility easements are the most common and typically allow access for power lines, water pipes or drainage systems. Other types include access easements, which grant neighbors the right to cross part of the land to reach their property. Conservation easements can restrict development to preserve green spaces or wildlife habitats. Any of these may influence how you can use or improve the property.
Managing the situation in an informed way
Some easements are recorded in a property’s deed or title documents, while others may be implied by long-standing use or established through court action. It’s not always obvious that an easement exists, which is one of the reasons why conducting thorough due diligence is necessary before closing a deal.
A title search can reveal recorded easements, but it may not show everything. You should also work with your legal team to review surveys, zoning regulations and existing site plans. In some cases, visiting the site or speaking with current owners and neighboring landowners can uncover informal arrangements or visible signs of use that hint at unrecorded easements.
Failing to identify and evaluate an easement before purchase can lead to costly problems. You may discover too late that you can’t build in a particular area, that a neighbor has regular access through your property or that utilities can’t be rerouted. Even if you’re okay with the terms of an easement, it could still affect financing or future resale value.
If an easement is in place, you’ll want to understand its scope, who holds the rights, how it has been used historically and whether it can be modified or terminated. Seeking experienced legal guidance is a great way to get started.