Buying a House With an Easement: Is That Bad?
Note: This article was originally published on May 6, 2016 and authored by Peter Park, J.D., a Portland real estate attorney. It has been updated since its original publication date.
When I was in law school, and once again for the bar exam, I spent countless hours studying real estate law and encumbrances on real property including easements, licenses, permits, and more. As a real estate broker, I am glad I have the knowledge so I understand what they are, how they are created, how they are extinguished, whether it survives a conveyance, and rights and remedies of parties. When issues come up with my real estate clients, I still refer them to real estate attorneys because additional real estate lawyers can handle the job better, and also there is an ethical consideration preventing real estate brokers, who are also licensed attorneys, from representing clients concurrently on both broker and attorney services. Lawyers who have a financial interest in the outcome of a transaction may not engage in representing the client on the transaction without a full waiver. So, I just stay clear from these situations; it’s better that way for my clients. But I still provide insightful information on what some of these things mean while making sure that my clients don’t take it as a legal advice.
One common question I am asked, most often by first time home buyers, is whether they should buy a house that has an easement on it. Most of them freak out when reviewing a preliminary title report and seeing pages of encumbrances on the property they are contracted to buy. So, I am going to provide some insight on which easement to watch out for and which to ignore.
An easement is a nonpossessory interest in the land of another that entitles the owner of the interest to a limited use or enjoyment of the other’s land and to protection from interference with this use. The interest, once created, may be irrevocable and generally is not subject to the will of the land owner. Luckey v. Deatman, 217 OR 628 (1959). Easements are also either appurtenant or in gross. Easement appurtenant involves two properties with one being dominant and the other subservient. Dominant property has rights of use or access over the subservient property within the terms and scope of the easement. Easements in gross do not involve two properties and the right is personal in nature so the owner of the easement does not need to own an adjoining property to exercise the rights. Easements generally survive conveyances and can only be terminated by completion, destruction, or expiration. So, having an easement on a property may have a permanent outcome on the property with rights of the home owner. But not all easements are bad.
Living in the Portland metro area, most homes are in subdivisions and planned communities. Those properties are on a permitted development by city and county governments, and as a condition of development, each lot becomes subject to certain easements, conditions and restrictions such as utility easement, public sewer easement, storm drainage easement, public walkway easement, and more. Moreover, if a home is a part of a Homeowner’s Association, easements over the front of the property is usually granted for landscaping and maintenance if the CC&R provides such agreement. So, these easements do not pose issues, nor do they make the property unmarketable.
If you live in a rural area, you run into bad easement issues more often, typically where the easement was created by a parcel owner next to your land. These easements are often created by 1) implication by prior use, 2) necessity, 3) expressly by prior owner, or rarely 4) prescription. Easements are also recorded so it’s a public record. These easements can be terminated if the easement holder releases his or her interest; when the two parcels merge under one ownership; when the easement holder abandons the use; or the owner of the servient estate acquires the easement back through a form of an adverse possession called prescription in the setting of easements. As you see, it’s difficult to get rid of an easement. When you have an easement like this, it also diminishes the value of the servient property to the extent of the owner’s limited use and desirability of the land. When you have an easement issue like this on a property you agreed to purchase, you can usually rescind the contract as a buyer or negotiate further with the seller.