How Do Easements Affect Property Value?

Image by Zach Schorr from Pixabay

Hello everyone, The Waldren Team here. As you know, we enjoy taking the time to share concepts and situations in real estate with all of you, as it can be a world where anything can happen. We do not commonly encounter complications regarding easements on Marco Island, but the concept is worthy of understanding, and as always, you just never know when it may become relevant.  

Whether you’re buying or selling a home, you might discover there is an easement attached to your property. If so, you’re probably wondering how this affects your property values and what can be done about it. 

What is an Easement?

Essentially, an easement is for one person to have explicit permission to have use of another person’s property for a specified purpose. There are several different types of easements, and each has specific rights attached to them and the rights could be for either a private (i.e. allowing someone access or use) or public purpose (i.e. utility companies). Easements can be temporary or permanent; with the latter, the easement is typically written into the property deed.

For more context, here are a few easement examples:

• A utility easement allows for utility companies (i.e. phone lines, power lines) can access your property to repair infrastructure. 
• An easement by necessity, as the name suggest, occurs when it is deemed essential for another party to access your land. An example of this may be if you had a neighbor that lacked their own driveway, and required going through yours to access the road. An easement by appurtenant functions similarly, with a key difference being the latter easement runs with the land and is more permanent (i.e. a property blocks public beach access and passing through is required for access; this is much more difficult to rectify than building a new driveway such as in the earlier example).
• An easements by prescription is perhaps the most contentious one. Essentially, if another individual uses your property in any way, and you are aware of it, and you do not do anything about it for a very long time (typically years), that individual can eventually make a legal claim to being able to use the property in that specific way. For example, if your neighbor cuts across your property to walk to the store for years, and you are aware of it, and never speak out of take action, an easement by prescription could feasibly occur.

There are other types of easements as well, but this is the general idea.

It’s important to know, while easements permit others to use your land for a designated reason, it doesn’t grant anyone using your land any rights to ownership; you are sole owner.

Can Easements Affect Property Values?

Easements of land may or may not impact your property’s value, depending on how the land is being used and whether you want to use (or sell) your property. Many times, an easement has no impact on your property’s value. However, there are potential issues that may crop up when looking to develop or sell your land which could impact its perceived value.

• Easements might limit the ability to build structures on affected portions of the land.
• Resale values might be impacted by structures, wires, pipes, etc. placed by utility companies, especially if they are unsightly or prevent owners from developing the land for personal purposes.
• Buyers might not like the idea of others “trespassing” on their land, even if being done legally.
• On the other hand, some easement holders pay a fee to the property owner, and collecting this money might be an attractive prospect to some buyers.

In many neighborhoods, everyone has the same easement attached to their property. In these cases, it doesn’t typically impact your property value because the easements affect everyone’s property equally.

Is There a Way to Remove an Easement?

A court of law often considers an easement to be used in perpetuity unless a stipulation exists in the original agreement of how long the easement will last. In some cases, easements can be removed.

• A written agreement is made with the easement holder to terminate the easement (easier if the original purpose of using the land is abandoned or no longer valid).
• If easements are no longer used or needed, inquire if a title action can be taken to reset property lines, eliminating the existing easement.
• Ask the current easement holder if they are willing to abandon use and let it naturally expire—there will need to be proof this has occurred for the easement to be removed.
• Consult with a real estate attorney who is well-versed in both general and state-specific easement laws—there may be lesser-known “outs” for easements according to local laws.

If you do successfully terminate an easement, be sure it’s recorded in public records.

While technically an easement doesn’t devalue your property, it can affect its marketability. This is always something to consider when determining to willfully grant an easement or buy a home that has an easement attached to its property deed. Again, in our history of doing real estate on the Island, these issues are not common, but the more knowledge we can share with our customers and friends, the better.