Purchasing commercial property is a major investment. As a result, you’re unlikely to enter into such an arrangement lightly. When considering a particular purchase, you may learn that the property in question is impacted by an easement. You’ll want to carefully consider how this reality could affect your business interests and plans for the property accordingly.
An easement gives someone the legal right to use a portion of a property for a specific purpose, even though they do not own it. Not all easements are problematic. Some, like utility easements, are common and typically do not interfere with everyday operations. However, others—such as access easements that allow neighboring properties to cross your land—could limit development, restrict modifications and/or complicate privacy and security efforts.
Easements can be public or private, and they can be permanent or set to expire at a certain point in time. A recorded easement will show up in a title search, which is one reason why conducting thorough due diligence is necessary.
It is also important to understand whether the easement at issue is “appurtenant” or “in gross.” An appurtenant easement benefits a neighboring parcel of land, meaning the easement transfers with that land even if ownership changes. An easement in gross, on the other hand, is attached to an individual or company rather than the land itself. Understanding the type of easement you’re dealing with will help you anticipate how long it may be in effect and who has the right to enforce it.
Safeguarding against concerns down the line
If the terms of the easement are vague or if there is already tension between property users, buying the property could involve stepping into an ongoing legal or neighborly conflict. In these situations, it is wise to assess whether the value and location of the property outweigh the complications the easement might cause.
In some cases, buyers can negotiate easement modifications or secure title insurance that covers easement-related losses. However, this is not always possible, and legal guidance before proceeding with any commitments is going to be important.
Ultimately, purchasing a commercial property with an easement attached is not always a deal-breaker—but it should never be taken lightly. Fully understanding how the easement functions can help you to protect your investment and help you avoid unpleasant surprises down the road.