The Basics of Easements in Commercial Real Estate

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By Rochford Law Posted on April 12, 2018 at 7:45 AM

An easement is a common term you will encounter when discussing the commercial property. It affects both the buyer and the owner equally and is a complex system of legalities designed to protect landowners. There are varying degrees of easements available but are often hard to understand. Because most people will be affected by an easement, we've compiled all the necessary information to help you identify what you are up against.

What is an Easement in a Purchase Agreement?

Easement refers to a property interest that allows for the holder of the easement to utilize nonpossessory land. In layman's terms, it gives an individual the right to use another person's property/land for specific purposes. The easement is constructed through the possessor of the land who is allowed to choose who and what they include and exclude.

If you are affected by an easement, it's called "servient estate." If you are enforcing an easement, it's known as "dominant estate." It's possible that an easement benefits a singular individual rather than a particular piece of land. But, the purpose of the easement is to protect the rights of neighbors to utilize a space that is not communal. Often, there are verbal agreements made but "implied easement" doesn't always hold up in court. To avoid a legal situation, the creation of this easement is put in writing and admissible in a court of law.

Types of Easements

Easements are available in different forms and grant the holder unique access or use of the property. Many variables come into play when categorizing the easements such as the type of property, the relationship between the parties, and the exact use for which the easement is needed.

Easement by Necessity

Easement by necessity gives an owner of property permission to cross over another's property to access a public road. This type of easement is often referred to as "appurtenant" which is stating that the benefit is more for the piece of land rather than an individual. Easement by necessity is usually transferable between title holders and is created when the area is physically inaccessible to reach a public road. All states allow easements by necessity, but the state of Tennessee only requires reasonable necessity instead of strict necessity granting any property owner who isn't able to access a public road access to do so.

Utility Easement

One of the most common is a utility easement. This type of easement grants access to utility companies or the local city, county, and state municipality. They commonly include overhead electric, telephone, and television lines in addition to underground electric, water, sewer, and cable wires. Areas or properties with utility easements usually were defined not by the owner, but the utility companies when the land was initially placed on a plat. They exist because it's good for the community and makes it more efficient to run and maintain lines throughout a city. It should be noted that it doesn't permit utility companies to do whatever they want, but does usually allow them the right to make beneficial changes as long as it benefits the community.

Private Easement

Property owners have the right to sell an easement to someone, such as access to a path, driveway, or sewer. An example of a private easement would be a building being constructed on a hill might need the sewer line to slant underneath another to get to the street. Selling a private easement would allow for this construction to take place efficiently. If you are purchasing a property with a private easement, you'll want to obtain the documents and review them carefully with a commercial real estate lawyer. Not all private easements transfer with the title and sometimes are only granted to a single individual. Additionally, it can limit what the new property owner can do on or around the defined area.

Prescriptive Easement

An easement by prescription is an implied easement that is based on the use of the property rather than the language in a deed. It arises when a person under an adverse claim of right makes continuous, uninterrupted, open, visible, exclusive, use of the land over which the easement is claimed for a period of twenty years or more with the true owner’s knowledge and acquiescence

Public Easement

As its name states, public easement grants specific areas of land accessible to the public. This could result in a park or allow for tourists to use their property in some way. In most cases, the reservation of rights was established by the government. Public easements can also come in the form of a prescription, which as we previously mentioned, would allow public use for a designated period.

Easements are an intricate detail of property agreements. Lacking a complete understanding of how they affect you could result in not being able to use the land as needed or a lawsuit. Working with an established commercial real estate lawyer can help you simplify the process of obtaining the property or draft necessary documents to comply with Tennessee state laws and grant others access to your land.

Learn more about how Rochford Law can help your commercial real estate venture by contacting us today.

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Topics: Commercial Real Estate