Encumbrances on Real Estate

Commercial Real Estate Information Center

Encumbrances on Real Estate

Overview

Broadly, an easement is a right to use another's property. This right may be established by law or implied over a period of time as a result of continuous use. The use can also be bought and sold. This section will address how easements are created and used. This article will also discuss the subject of adverse possession, which involves the use of another's property over a period of time until, by law, the property becomes the adverse user's. There are some fundamental differences between easements and adverse possession. If you are faced with commercial real-estate issues, an experienced real-estate lawyer would be an excellent resource.

Utility Easements

The most common type of easement is the utility easement, defined as an agreement between a utility company (water, electric, etc.) and the real-estate owner to use part of the property for utility purposes. For example, a water company may need to bury sewer pipes under a structure on the owner's land. By obtaining an easement, the utility company gains a legal right to use the property. The property owner cannot interfere with the use of the easement. If the property owner does interfere, the utility may have a legal cause of action against the property owner. These easements are seen as beneficial to the public and aid the everyday functions of a community. An easement can also be sold to a private party to run private water or sewer lines across property. It must be remembered that easements belong to the land and not the property owner. Therefore, when buying real estate it is important to identify any easements connected to the property. If any exist, they will come with the real estate and must be honored by future owners of the property.

Other Easements

Utility easements are not the only form of easement. Another common type is an access easement. An access easement is one that allows a property owner ingress and egress from a landlocked parcel of real estate. To allow access to land, a property owner may sell or grant an access easement in the form of a path or road. This type of easement is connected to the land and future owners should do an adequate title search to determine if any exist on properties that they are considering purchasing.

Adverse Possession

Adverse possession is a means by which a trespasser can gain ownership of another's land. There are some basic requirements to adverse possession:

Hostile claim
Actual, open and notorious possession
Exclusive and continuous possession
Possession long enough to satisfy the state statutory time period (usually between 15 and 20 years).

A "hostile claim" does not necessarily involve a violent seizure of property. It simply means that a trespass has taken place. If all of the elements listed above are met, a state may allow the trespasser to assume title. Adverse possession can be easily averted. A property owner should always address a trespasser as quickly as possible by either notifying the trespasser of the trespass or reporting the situation to proper authorities.

An easement can also be created by adverse possession. This sort of easement is called a prescriptive easement. For example, if a trespasser uses a path across another's land for long enough that trespasser may gain a legal right to the path.

Conclusion

When researching commercial real estate, it is important to investigate any easements that are held against the property. Easements can be a concern to the commercial real-estate developer because of their impact on full economic use of the property. Adverse possession is another serious consideration for the current owner of a property, since an outside individual or entity could acquire ownership of a portion of real estate, affecting both its value and use. If you have concerns about real-estate encumbrances, a lawyer can address your particular concerns.

DISCLAIMER: This site and any information contained herein are intended for informational purposes only and should not be construed as legal advice. Seek competent legal counsel for advice on any legal matter.

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