Insuring Easements Prepared By: Stewart J. Skip Sacks, Virginia State Counsel Stewart Title Guaranty Company I. Overview of Easements (10 min) A. Definition An Easement is an interest in land owned by another party which entitles the owner of the easement interest to specific, limited use of the property which has been subjected to the easement. Easement rights can be enforced against the owner of the property subject to the easement as well as against third parties. Easements provide the easement owner with rights that are not a normal incident of the easement owner s land. B. Appurtenant Easements An Appurtenant Easement benefits another tract of land and does not exist separate and apart from the land which it benefits. For example, Parcel A may have an easement allowing its owner to access a public road by traveling across Parcel B. In this example, Parcel A is referred to as the Dominant Estate since it benefits from the easement and Parcel B is referred to as the Servient Estate since it is burdened by the easement. Easements are considered reciprocal when both parcels benefit from and are subject to the easement. In this case, each parcel is both Dominant and Servient. C. Easements in Gross An Easement in Gross is a personal right to use another s land for a limited purpose and is not appurtenant to any other parcel. For example, an individual may purchase an easement in gross which grants the owner of the easement the personal right to cross property to access a lake for boating purposes. Conservation easements which preserve scenic, open space, and other natural or historic areas by prohibiting development are also easements in gross. Similarly, easements restricting the height of construction to preserve airspace for military or civilian aviation are generally easements in gross. Except for conservation easements established under the Uniform Conservation Easement Act or similar state specific legislation, easements in gross should not be insured without underwriting approval. D. Easement Distinguished from License A License is the privilege to perform specified acts on another party s land, which acts would constitute a trespass absent the property owner s permission set forth in the license. It is a personal right and not an interest in land and may or may not be assignable. As contrasted with easements which must be established in writing, licenses may be created verbally as well as in writing and by any act of the grantor that clearly demonstrates the licensor s consent. Because licenses are not considered interests in land, they should not be insured without underwriting approval. E. Easement Distinguished from Profit a Prendre A profit a prendre is the right to share in the soil or produce of land owned by another (e.g. minerals, timber, oil, sand, gravel). They can be distinguished from easements in that an easement holder has no right to share in the profits of the subject land. In many jurisdictions, rights historically referred to as a profit a prendre are now conveyed by deed or lease (e.g. timber deeds, quarry leases). A Profit a Prendre or other separately
deeded right to take minerals, oil, gravel, timber, sands, crops etc. should not be insured without underwriting approval. F. Further Classification of Easements In addition to being classified as appurtenant or in gross, easements are classified by: 1. Duration easements may be permanent or temporary. Temporary easements (e.g. construction easements) may terminate after a specified time period or upon occurrence of a specified event (e.g. a temporary access easement may terminate upon construction and dedication of a public right of way). 2. Affirmative or Negative nature of easement an affirmative easement allows the easement holder to make use of the servient estate. Negative easements (e.g. conservation easements) restrict the use, development or enjoyment of the property subject to the easement. Due to potential challenges to the validity of negative easements under common and statutory law, many states have passed conservation easement statutes. While some jurisdictions have adopted the Uniform Conservation Easement Act, specific state statutes must be reviewed as to requirements and applicability. Some statutes allow the conservation easement to be enforced by a governmental body, charity, or trust in addition to the actual grantee of the easement. As such, third party joinder may be required to terminate or modify a conservation easement. II. Creation of Easements - (10 min) Easements may be created by: A. Deed or other express grant B. Deed reservation C. Mortgage D. Condemnation E. Implication F. Necessity G. Prescription H. Custom I. Estoppel Note Easements by implication, necessity, prescription, custom and estoppel should not be insured unless established by a final, non-appealable order of a court of competent jurisdiction. Standards for the establishment of easements vary from state to state. Because easements are strictly construed under common law, documents creating easements must be carefully analyzed. If an easement is established by a deed grant, deed reservation or mortgage it must be examined to confirm
that it clearly sets forth the dominant estate, the servient estate and the nature and scope of the easement. The Virginia Supreme Court has ruled that easements must be established by a recorded instrument (e.g. will, deed grant, deed reservation, deed of easement or mortgage) and may not be established by dedicatory language on a recorded plat. See attached VLTA Examiner article discussing Burdette v Brush Mountain Estates (278 Va. 286 (2009)) and Beach v Turim, et.al. (Record No. 130682). In Brush Mountain and related cases the Virginia Supreme Court has stated, easements must be strictly construed, with any doubt being resolved against the establishment of the easement. 278 Va. at 297, 682 S.E.2d at 555). III. Termination of Easements (10 min) - For purposes of insurance, easements must be properly released of record or extinguished by a final, non-appealable order of a court of competent jurisdiction. Depending on the jurisdiction, as a matter of law ( as distinguished from insurance) easements may be terminated by: A. Deed of Release B. Expiration of duration C. Satisfaction of condition D. Merger E. Foreclosure of prior lien on servient parcel F. Abandonment G. Operation of law H. Abrogation I. Adverse possession J. Cessation of necessity K. Condemnation L. Tax lien sale M. Unreasonable or excessive use IV. Insuring Easements (10 min)-prior to insuring an easement it must be established that: A. The easement was granted by all owners of the servient estate (including spouses where applicable) this requires a title search of the servient parcel. B. The easement was properly granted generally, this requires a written instrument in which all owners of the servient estate grant and convey the easement (or all owners of the dominant estate join in reserving the easement prior to conveyance of the servient estate). The instrument must be
examined to confirm it is properly executed, notarized and recorded and contains a clear description of the servient parcel, the dominant parcel and the purpose and extent of the easement rights. All prior liens on the servient parcel must be released or subordinated or excepted as to the servient parcel. C. The easement must not have been terminated (see above). D. The easement must be in use and there are no facts suggesting it is obstructed (e.g. survey). E. The easement must be appurtenant to a dominant parcel (or obtain underwriting approval). F. All liens, exceptions, restrictions, easements, conditions, taxes and assessments and rights of third parties affecting the servient parcel and not released or subordinated of record must be taken exception as to the servient estate V. Excepting to Easements (5 min)-while an easement must fully comply with the above standards to be insured, an easement exception is appropriate any time there are any instruments, drawings, course of conduct, or any facts which suggest that any party may claim purported easement rights. Any evidence of easements or potential claims of easements revealed by surveys, plats, tax maps or other drawings must be excepted to, together with any known claims of easement by implication, necessity, prescription, custom and estoppel. Simply put, an easement must meet a high standard to be insured but an easement exception is appropriate whenever there is any evidence of claimed easement rights. VI. Underwriting Considerations for Insuring Easements. - (10 min) A. Is the Easement Exclusive or Non-exclusive? If the easement is shared, exception should be taken to rights of others in and to [Easement Parcel]. B. Is the Easement Reciprocal? If so, when the easement parcel is added to the insured legal description it should be described as together with and subject to and exception should be taken to the easement in Schedule B-II. C. To What Property is the Easement Appurtenant? An appurtenant easement cannot be used to benefit other land to which the easement is not appurtenant. For example, an easement providing Parcel A with access across Parcel B may not be used to provide access to a contiguous Parcel C via Parcel A. D. Is the Intended Use Reasonable? Courts are sensitive to uses that overburden the easement parcel. For example, an easement granted to provide ingress and egress to and from a farm may be challenged when used to access a subdivision to be developed on the former farm. E. Is the Easement Held by the Same Parties in the Same Fashion as the Dominant Parcel? Title to the easement must be held in the same tenancy as the dominant parcel. Beware of discrepancies such as H&W own property as tenants by the entireties but easement granted to husband only. In commercial transactions, make sure the same entity takes title to the land and appurtenant
easements. F. Is the Easement in Use and Unobstructed? A survey should be reviewed for any evidence the easement has been abandoned (e.g. overgrown vegetation) or obstructed (e.g. fences, chains, and other barriers). G. Was an Easement Referenced in a Deed Actually Granted? Deeds often state together with an easement for in the legal description. Sometimes, this is merely a reference to an easement thought to exist. Unless the grantor of the deed owned the easement property at the time of the conveyance, the search must be taken back further to find an easement properly granted by the then owner of the servient estate. If an easement referenced in the legal description was not properly created, the commitment and policy must clearly state that the easement is not insured. VII. Underwriting Considerations When Deleting Easement Exceptions. - (5 min) A. Has the Easement Clearly Terminated by its Own Terms? Easements may expire by their own terms after passage of a specified time period or the occurrence of a condition or event. While it is generally safe and easy to establish that sufficient time has passed, be careful and seek underwriting approval when asked to delete an easement exception based on occurrence of an event (e.g. completion of construction, installation of public utilities, dedication of a public right of way). Be certain to obtain unequivocal evidence and try to establish the condition of record to avoid challenges from subsequent purchasers and lenders. Require certifications from surveyors and other professionals or municipal authorities when appropriate. B. Has the Easement Been Properly Released? If a Deed of Release or other abrogation agreement is proffered, make sure it has been executed by all easement holders (and spouses if applicable) and all lien holders. If the easement is a negative easement, such as a conservation easement, consideration must be given to the rights or claims of any third party beneficiaries or stakeholders such as neighbors, government entities and charities. C. Is Termination of the Easement Based on Merger? While merger of the servient and dominant estates would impair our ability to insure an easement, do not rely on merger alone to eliminate an easement. A recorded document reflecting acquiescence to the merger may be required. D. Is Termination of Easement Based on Foreclosure of Prior Lien? While foreclosure of a prior lien would prevent us from insuring an easement, do not delete an easement merely because of a tax sale or foreclosure of a prior lien without underwriting approval.