Does an Easement Affect the Value of Real Property
General real estate values differ from state to state and even from one county to the next. For example, the local economy, how a piece of land will be used, and other property features such as a beach or lake view all work to determine property value. Because different properties can have extremely different qualities, an easement could have a significant or nonexistent impact on the property. Typically, a large piece of rural property will be less affected by an easement compared to a small urban property. Additionally, the size of the easement compared to the overall size of the property will play a role.
Determining the value of a piece of property with an easement on it can be difficult. However, the type of easement on the property will greatly affect the price.
Types of Easements
There are many different types of easements that are each used under a different set of circumstances. Thus, if you need to utilize an easement or someone else places an easement on your property, you must understand the type of easement so you can understand your rights.
An easement appurtenant is tied to the property itself instead of the owner of the property. Thus, the easement will still be on the property even if the owners of the land change. In most cases, an easement appurtenant is a positive type of easement for a property. For example, an easement appurtenant could be used if two properties have access to a private beach. Thus, if the owner sells the home, the new owners would still have access to the beach property.
Easement in Gross
An easement in gross is bound to a specific person or entity instead of a piece of property. Utility companies most commonly use easement in gross. They use this easement to build or maintain a utility that is on or near a person’s land. However, a property owner could also allow an easement in gross so that a friend could use their property. For example, a property owner may give a friend an easement in gross so that they recreationally use the property.
If an easement in gross is put on a property by a private entity and then this property is sold, the new owner of the property can opt to renew or deny this easement. On the other hand, if the easement is put on a piece of land by a utility or other public company, the new property owner could be taken to court if they deny the easement.
A new property owner can take on an easement in gross after purchasing a property. However, the easement holder cannot give their property rights to another entity. Thus, in the example above, if you gave one of your friends an easement to hunt on your property, they could not transfer this easement to another person or business. Similarly, the utility company cannot transfer their easement to another public company without the property owner’s consent.
Easement by Prescription
An easement by prescription—also known as a prescriptive easement—will be utilized when a person has continuously used by a person for a long period of time as if this person already had an easement. To receive an easement by prescription, one must meet the following criteria.
- Continuous use for a specific period of time: Every state is different. However, to receive an easement by prescription, someone must have been using another person’s property for between 5 – 15 years.
- Open and notorious use: The use of the property must be obvious, observable, and not secretive.
- Hostile use: Hostile use does not mean someone used another person’s property maliciously, instead, it means that the use occurred without the real property owner’s consent.
- Exclusive use: Exclusive use is not required in every state and the definition of exclusive use changes based upon the state. One definition of exclusive use could be that the use of the property cannot have occurred while the true owner of the property used it. For example, say you own a dock, and your neighbor has been using this dock for their boat for five years. If you have not been at the property at all during this time, even if the neighbor has not gotten your permission, they could seek an easement by prescription to continue using your dock.
You should obtain as much information about the land and easement as possible. For example, you should see if the easement has already been legally granted. Additionally, check where on the property the easement is located—you can look this up at the local county clerk’s office. If no deed was recorded, you should look at the property blueprints. In either scenario, you may need to visit the property to measure and verify the easement specifications.
Whole Property Appraisal
When appraising a property that has an easement on it, you should initially value the property as if the easement was not present. By valuing the property as you normally would, you can find a fair purchase price and then lower or raise the price depending on the type of and how invasive the easement is on the property.
For example, if a neighbor’s garage takes up a significant portion of your property, the property value will decrease. However, if the easement is public, the property may have increased high-speed internet or cable television.
Contact Our DC Law Office for More Information
Finally, for more information regarding the basics of easements on real property, contact us at 202-803-5676. You can also directly schedule a consultation with one of our skilled attorneys. Additionally, for general information regarding real estate law, check out our blog.