A Deep Dive into Easements

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1 A Deep Dive into Easements Diane B. Davies, John A. Lovett, James C. Smith I. Introduction Easements are ubiquitous in the United States. They serve an invaluable function. They allow persons and property owners who need to use someone else s property to acquire an enduring property interest less than full ownership for some limited purpose. Modern real estate development and indeed many forms of community living would be almost impossible without easements. Easements are also complex property arrangements. Usually they are created by express agreements that comply with the Statute of Frauds. But they can also arise by implication and by prescription, that is, without a writing. Easements always involve at least two parties, and they frequently involve many more parties. The land subject to an easement is called the servient estate. An easement is appurtenant when its purpose is to enhance the value of land that adjoins the servient estate or is near the servient estate. That benefited land is called the dominant estate. Easements can benefit dominant estates or persons who have no connection at all with nearby real property. The latter situation, when the person owning the easement has no dominant estate, is called an easement in gross. Easements often bind neighbors to one another in long-term relationships that can turn sour and create significant conflict and tension. Very often the economic conditions and land use plans that existed at the time of creation of an easement will change. Sometimes the the affected owners will seek to modify the arrangements established by the instrument or situation creating the easement. Should courts accede to these attempts to change the initial arrangements established by the original parties to the easement? How can property owners plan for such changed conditions? How can easement rights be transferred? How do easements end? These are just some of the subjects we address in this deep dive into easements. We begin in Part II of this article by focusing on the creation of easements. This Part takes on issues that arise in drafting and interpreting express easements. Then we discuss when and what under circumstances courts will recognize the existence of nonexpress easements, including easements of necessity, easements implied by prior use, and prescriptive easements. With regard to implied and prescriptive easements, this article will highlight some of the significant new trends in U.S. case law. Part III deals with the important transactional subject of the assignability and transferability of easements, drawing particular attention to the difference between appurtenant easements and easements in gross. Part IV turns to the always difficult problem of how the easement relationship will be maintained and how it will be affected by changing conditions during the existence of the easement. This Part will examine issues related to attempts to change the scope of the easement, expansion of the dominant estate through additional land or additional uses, how responsibilities for improvements, maintenance and repair are handled, and the servient owner s rights to use land subject to the easement. Finally, this Part will address in some

2 detail the current controversy, prompted by promulgation of Section 4.8(3) of the Restatement (Third) of Property: Servitudes, over whether a servient estate owner should be allowed to seek unilateral relocation of an easement. Part V will address some of the issues that can arise in conjunction with termination of an easement. This discussion includes an analysis of the effect of Section 7.10 of the Restatement (Third) of Property: Servitudes, which permits judicial modification or termination of easements to address changed conditions. Finally, Part VI will offer observations on some specialized and more unusual kinds of easements, namely wind farm easements, solar easements, recreational access easements and flowage easements. II. Creation of Easements Easements can be created by an express grant or reservation. They can also arise as a matter of law. In Section A of this Part, we focus primarily on how to draft an express easement in anticipation of both present and future needs of the client. In Sections B and C, we focus on major issues in the common law of implied and prescriptive easements. We identify major trends and new developments in U.S. courts and provide counseling tips to advise clients about risks in light of these trends and developments. In Section D, we return to an important classification issue whether an easement is appurtenant or in gross and offer tips for drafting to address this problem. A. Express Easements 1. Grants and Reservations An express easement means that there is language in a deed or in another writing that explicitly grants or provides for the easement. Express easements are of two types: grants and reservations. A grant is straightforward. The grantor conveys an easement to the grantee. For a grant of an easement, the instrument s only purpose may be the conveyance of an easement, or the grant may be tied to the conveyance of an estate from the grantor to the grantee. A reservation functions as a hold back. An easement is reserved if a grantor conveys an estate and wishes to make some use of the conveyed property after delivery of the deed. The grantor reserves an easement over the conveyed property. 2. Exclusive and Non-exclusive Easements Express easements are classified as either exclusive or non-exclusive. Most easements are non-exclusive, which means two things. First, the grantor of the easement retains the right to use the property the same way the owner of the easement uses the property. Second, the grantor of the easement retains the right to grant additional easements for the same purpose to third parties. In both circumstances, the grantor s personal use and use by third parties may not unreasonably interfere with the easement holder s use. For example, the grantor of a non-exclusive driveway easement may use the driveway, in common with the easement owner, and may grant a second driveway easement to another person.

3 With an exclusive easement, the grantor may not grant an easement or a license for the same purpose to another person. 1 In other words, outsiders are excluded. In addition, the easement holder may have the right to exclude the grantor. For example, an exclusive driveway easement protects its holder from having to share the driveway with subsequent grantees. Whether the holder may also stop the grantor from using the driveway depends on the language of the instrument and how it is interpreted Drafting with One Eye on the Present and One Eye on the Future Legal documents require a careful balance between the desire to cover every contingency with the need to have a clear, concise document that can be easily understood and executed. At one level, drafting an express easement is much the same as drafting any other contract or document for a client. It will have important legal consequences, and it is vitally important to understand the client s objectives and the perspectives of the other parties. Formal requirements, including adequate legal description of the land and Statute of Frauds compliance, must be observed. One also should draft with a good understanding of the interpretative rules that courts will apply, if litigation concerning the express easement ever takes place. Easement interpretation involves consideration of the location and character of the properties burdened and benefited, the uses made of the properties before and after creation of the servitude, the character of the surrounding area, the existence and contours of any general plan of development for the area, and consideration paid for the servitude. In adopting a portion of the Restatement (Third) of Property: Servitudes, the Colorado Supreme Court held that easement language should be interpreted to accord with the meaning an ordinary purchaser would ascribe to it in the context of the involved parcels. 3 The list of relevant considerations is designed to effectuate the true intentions of the parties to the granting instrument, to the extent that an ordinary purchaser of the land could ascertain those intentions These planning and drafting considerations are centered on the present, but drafting an instrument creating an easement adds an additional layer of complexity because easements are often intended to last for many years, or even in perpetuity. One must focus an eye on the future as well as the present. Parcels burdened and benefited by an easement may change hands multiple times over the easement term. Easement drafters must take into account not only current conditions and intentions, but also changes that may occur in the dominant and servient estates and the surrounding area. Changing economic conditions, neighborhood land use transformation, and developments in technology and equipment may lead to changes in the uses of the servient estate by the easement holder as well as by the servient estate owner. It is important to understand developing law regarding the interpretation of easements to address changes in circumstances and use. Generally, easements, like other 1 See Bijou Irr. Dist. v. Empire Club, 804 P.2d 176 (Colo. 1991) (interpreting easement to store water for irrigation as exclusive). 2 See Gray v. McCormick, 84 Cal. Rptr. 3d 777 (Ct. App. 2008) (exclusive access easement does not allow servient estate owner to use driveway). 3 Lazy Dog Ranch v. Telluray Ranch Corp., 965 P.2d 1229 (Colo. 1998).

4 contracts or instruments affecting title to real estate, are interpreted to give effect to the intent of the parties. Express easement terms will generally be given effect, but a more nuanced analysis occurs when courts apply the terms of an instrument to specific circumstances not expressly addressed in the instrument. Some courts have rejected the traditional four corners approach in favor of concepts outlined in the Restatement (Third) of Property: Servitudes. 4 For an expressly created servitude the Restatement calls for ascertaining the intention of the parties from the servitude's language interpreted in light of all the circumstances. 5 The Restatement also suggests rules for courts to supplement the easement terms when additional terms are necessary to determine rights and obligations of the parties or their successors. 6 Supplementary terms suggested by the Restatement include duration; liability and enjoyment rights of successors to the original parties; whether a servitude benefit is appurtenant, in gross, or personal; transferability of servitude rights: delegation of servitude benefits; and the location, relocation, and dimensions of a servitude Drafting Checklist of Provisions to Consider to Avoid Future Disputes Adequate description of the servient estate and, if the easement is appurtenant, the dominant estate. E.g. metes and bounds (surveyed) description; west ten feet of lot 1, block 1, ACREL subdivision ; or surveyed centerline description with width. Exclusive or non-exclusive if exclusive, limits of exclusivity. Nature of use of dominant estate purpose of easement; any limits on use (e.g., number and size of facilities). Use by of the servient estate owner; limits on buildings, structures, wells; permitted uses. Any limitations on use of the dominant estate (e.g., parking for retail uses, or access for no more than one single family residence). Duration of the easement. Relocation rights - whether either party has the right to relocate the easement and terms and conditions regarding relocation rights. Address cost, timing, party responsible for completing relocation, and any limit on number of relocations. For shared uses obligation to conduct and pay the cost of maintenance and repair; rights to make improvements, allocation of cost of improvements, and approval rights. B. Implied Easements 4 RESTATEMENT (THIRD) OF PROPERTY: SERVITUDES (2000). 5 RESTATEMENT (THIRD) OF PROPERTY: SERVITUDES 4.1 (2000). 6 RESTATEMENT (THIRD) OF PROPERTY: SERVITUDES 4.2 (2000). 7 RESTATEMENT (THIRD) OF PROPERTY: SERVITUDES (2000).

5 Although most of the time transactional lawyers negotiate, draft, and implement express easements, they must remember that easements often are created without any writing and without strict compliance with the Statute of Frauds. There are two principal ways that easements come into existence by operation of law. The first is by implication. The second is through prescription, that is, through adverse use alone. American common law recognizes two principal types of implied easements: (1) easements by necessity; and (2) easements implied from prior use. 8 Courts occasionally recognize implied easements based on map or boundary references, 9 on general plans or other general theories of implied intention that overlap with estoppel, 10 and in other specialized circumstances. 11 This section, however, focusses on easements by necessity and easements implied from prior use as they are the most common forms of non-express easements. 1. General Theories, Policy Concerns, and Two Restatements Commentators tend to emphasize the unity of the common law doctrines of easements by necessity and easements implied from prior use while courts sometimes confuse the two doctrines. Both doctrines rely on two general theories. One theory, often called the inferred intent theory, 12 emphasizes the presumed intention of the parties to avoid leaving one of two or more parcels that were previously 8 EQUITABLE SERVITUDES, 3.07, at 47 (3 rd ed. 2016). 9 EQUITABLE SERVITUDES, 3.21, at (3 rd ed. 2016). See also RESTATEMENT (THIRD) OF PROPERTY: SERVITUDES 2.13 (2000) (stating rule for servitudes implied from map or boundary reference). 10 EQUITABLE SERVITUDES, 3.21, at (3 rd ed. 2016). See also RESTATEMENT (THIRD) OF PROPERTY: SERVITUDES 2.14 (2000) (stating rule for servitudes implied from general plan); RESTATEMENT (THIRD) OF PROPERTY: SERVITUDES 2.10 (2000) (stating rule for servitudes created by estoppel). One commentator has suggested that equitable estoppel should be the preferred policy basis for recognizing implied easements, but criticizes Restatement section 2.10(1) for recognizing irrevocable licenses in the absence of any proof of actual misrepresentation by the alleged servient estate owner or occupier because such recognition violates principles of the law of restitution and unjust enrichment. Michael V. Hernandez, Restating Implied, Prescriptive and Statutory Easements, 40 REAL PROP. PROB. & TR. J. 75, (2005). 11 Kysar v. Amoco Production Co., 93 P.3d 1272, (N.M. 2004) (citing RESTATEMENT (THIRD) OF PROPERTY: SERVITUDES 2.15 comment a (2000) and recognizing that a mineral lessee acquires an implied surface right of reasonable ingress and egress to reach a gas well located inside a production unit that the lessee is operating pursuant to a pooling arrangement and the right extends across lease boundaries within the unit to the surface of the entire area subject to the pooling arrangement, but not to leased land outside of the production unit). 12 JOHN W. BRUCE & JAMES W. ELY, JR., LAW OF EASEMENTS AND LICENSES IN LAND, 4.5, 4.15 (2017). One commentator argues that the only sound basis for either kind of implied easement easements by necessity and easements implied from prior use is the intent theory because it is the only one that honors the general principle that property law disputes can only be revolved with reference to the actual intent of the parties. Michael Hernandez, Restating Implied, Prescriptive and Statutory Easements, 40 REAL PROP. PROB. & TR. J. 75, (2005); Another commentator argues that implied easements should only be recognized based on the inferred intent theory because reliance on the land utilization theory improperly

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