Easement Essentials For Oregon Homeowners

Posted on by Phil Querin

Generally. An easement, in its most common and basic sense, is a right of use, e.g. to cross another’s land, to lay utility and sewer lines, to provide or share use for ingress and egress to one or more properties, etc.

Most easements are “appurtenant”, that is, the landowner with the right of use, and the owner of the land over which it runs, are contiguous.  The land benefited by the easement is technically referred to as the “dominant” estate” and the land burdened by the easement is the “servient” estate.

Since appurtenant easements affect the use and enjoyment of the dominant estate, as well as identifying the obligations of the holder of the servient estate, it is important that they be recorded on the public record of both parcels. In this sense, they are said to “run with the land”, i.e. they bind and benefit all successive owners.

There are  variations of the standard appurtenant easement, most of which are beyond the scope of this article. One, worthy of mention, however, is the “easement-in-gross”. I mention it because this refers to a right of use where there is a servient estate burdened by another’s right of use, but there is no land to be benefited. Rather, the beneficiary of an easement-in-gross is a user, e.g. a person or entity, that has a right to go upon another’s land for certain purposes, e.g. to quarry rock, or use as a boat ramp.

Rather than detailing the law of easements, I will simply list those elements that should be considered (depending on the needs of the parties) when drafting appurtenant easements. Caveat: Drafting easements is not as simple as pulling an old dusty form from the shelf.  An easement, if properly prepared, is a legally binding contract that runs for as long as it is adhered to, and the prescribed use is needed – it must, therefore, withstand the test of time.

It is not a “one size fits all” template; rather, it should be unique to the specific needs of the parties.  And since even the owners of both the dominant and servient estates will have legal duties created by the recorded document (such as maintenance and repair), it is important that all parties fully understand the agreement before recording.

Elements of Easement Agreements.

Recitals. These are not simply gingerbread provisions inserted to make the agreement appear legal. Rather, they should recite the background creating the need, and the purpose of the easement sought to be created.

Naming Conventions. The names of the parties should be the same as all of those appearing on the deeds by which they took title.

The Granting Clause. State expressly who is granting what to whom.

Purpose and Use. This is important, since the landowner burdened by the easement wants to make sure the dominant estate does not “overburden” the easement. Courts are very strict on this – if the use isn’t reasonably defined in the document, it will likely not be permitted. If the use is for vehicular traffic, for example, does that include large heavy-duty trucks that could increase noise, and require extra road maintenance? Conversely, the owner of the dominant estate does not want to see their use limited by poor drafting decisions.

Type of Easement. Appurtenant, in-gross, etc?

Consideration. Is the owner of the dominant estate going to pay money or some other form of up-front consideration for the use of the easement?

Duration. Perpetual vs. limited in time? What if the need may disappear, say because the owner of the dominant estate with an access easement may later obtain a right for public access to the highway? What if the public access will cost some money and the owner would simply rather continue using the private easement for access?

The Public Record. What if there are superior encumbrances on the public record, such as a first mortgage that was recorded before the easement is recorded? Will consent be required from the lender? Are there other earlier easements on the property that might be affected by the recording of a new one?

Binding Future Owners. What will the document say as to whether and how future owners of the dominant and servient parcels will be bound?

Exclusive or Non-Exclusive. Does the owner of the servient estate also have a right to use the land, or is use limited to the dominant estate? If the easement is underground, will there be limitations on what the owner of the servient estate can plant or build above ground over the easement?

Maintenance and Repair. This is a very important issue. Will there be any cost-sharing, and if so, how will it be determined?  The failure to address this results in a default to ORS 105.175, which provides, in part:

The cost of maintaining the easement in repair in the absence of an agreement and in the absence of maintenance provisions in a recorded instrument creating the easement shall be shared by each holder of an interest in the easement in proportion to the use made of the easement by each holder of an interest in the easement.

Access, Notice, Contractors, Damage, Etc. How will the easement be accessed? Will the owner of the dominant estate first have to give notice to the servient estate owner? What if there is collateral damage to the servient estate during the repair process? What about personal injury to third parties?  Will the servient estate be returned to its pre-repair condition? Will workers be licensed, insured, and bonded?

Disputes. Even if the parties are neighbors and friends, people and circumstances can change.  If there is a dispute, how will it be resolved? In court? Arbitration?  The latter is, in my opinion, the best solution by far for a variety of reasons: It is faster, cheaper, private, and less formal than the court process, and most arbitration services follow the same or similar rules of procedure and evidence as used in court. For that reason, however, it is important to review the rules of the designated arbitration service before agreeing to it.   

Attorney Fees. This provision can be the great equalizer, so that the party with the better legal claim or defense will not be bulldozed by the other party with more money. Without a prevailing party fee, weak claims can be arbitrated will little disincentive for losing, except payment of one’s own attorney. Paying the other side’s attorney fees causes parties and their counsel to focus more on the merits of the case, i.e. the end-game. If both sides have a healthy fear of losing, perhaps the matter can be jointly submitted to mediation, where a neutral third party works to facilitate a mutual settlement.

Recording. An unrecorded easement is practically worthless since it gives little or no notice to future owners of the property. I say “practically”, because if there was a well-trodden path across a seller’s property that was the result of using an unrecorded access easement, it might give the potential buyer enough notice to ask what’s going on. But absent actual or clearly visible notice to potential buyers, they will have no notice of the easement and would take the property free of the encumbrance. That means, upon acquiring title to the servient estate, the new owner could deny any right of use to the holder of the dominant estate.

Recording gives “constructive notice”, i.e. buyers are charged with notice of what the public record contains, even if they failed to review it. This rule of law is not as onerous as it sounds, since most buyers obtain title insurance when purchasing property, and are therefore apprised of what easements and other encumbrances have been recorded against the land. But knowing there is an easement is only half the task; it must be reviewed to fully understand the rights and duties of the parties.

Of course, for buyers who neglect to review their preliminary title report before closing, or having reviewed it, fail to understand it, they should obtain professional assistance immediately. But buyers should not expect their real estate broker to review and interpret preliminary title reports. Licensed brokers are important in putting and keeping transactions together, but they are not title experts, and if properly trained, will demur when requested to render an opinion about the marketability of the title based upon a report. In most cases, the best answers can come from the title officer who prepared the preliminary title report.

While there are other miscellaneous provisions in most well-drafted easement agreements, the above are the high points that should be considered.  And for buyers of land already encumbered by one or more easements, it pays to read and understand them before closing.  Some can be loosely drafted and informal, having been quickly prepared by two neighbors, who never thought about the “what-if?” questions that can arise over time.

The take-away here is that since the parties, and their successors in interest, will have to live with the rights created in a recorded agreement for the duration of their ownership, it is best to make sure any easement that is to be created will stand the test of time. ~Phil

Posted in Easements, Miscellany, Real Estate General, Realtor Risk Management, Residential Housiing | Tagged , ,
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