STOP! Is Your Commercial Property Affected by an Easement or Encroachment?

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Land-Survey

EASEMENTS and encroachments remain one of the key considerations within property transactions — due to their consequential implications for purchasers and landowners.

Easements

An easement is an interest in land creating the right to make use of another owner’s land for a specific purpose. In many cases, there will be two properties subject to the easement — the property, which is burdened by the easement … and the property, which benefits from the easement.

Easements can be created expressly, impliedly or as a result of statute. This means not all easements are registered on title. Accordingly, it is critical for you (s a prospective purchaser) to make appropriate enquiries as to all easements affecting the property you’re about to purchase purchase.

Easements can have significant impact on the way you can use and enjoy your property as a landowner.

For example: Generally speaking, if a property is subject to a drainage easement, then the landowner is unable to construct any improvements over the easement area. This significantly diminishes the building envelope for the property and potentially, its value.

Similarly, if your property provides a right of carriageway to another property, then you will be significantly restricted, in the way you can use the easement area.

Encroachments

In general terms, an encroachment means the physical interference of improvements of one parcel of land onto another, or an easement area. And the impact of encroachments is quite significant.

For example:

  • If improvements on one property encroached onto an easement area or an adjoining parcel of land, the party benefiting from the easement, or the owner of the adjoining parcel of land (as the case may be) may request the encroachment be removed. This would result in the subject landowner incurring significant costs; and
    .
  • If improvements of an adjoining landowner encroached onto a property, and the encroachment had been existence for more then 15 years … the adjoining landowner may have rights to acquire the part of your land (which is subject to the encroachment) by way of adverse possession.

In many cases, an encroachment may diminish the value of the affected parcel of land.

Tips for prospective purchasers

1. Conduct a Register search on the property

Many easements are recorded on the certificate of title or survey plan. Accordingly, prospective purchasers should conduct an up-to-date title search of the property to ensure they are aware of all registered easements. Your solicitor can assist in procuring these searches.

2. Vendor Warranties

As not all easements are recorded on title, purchasers should ensure that the contract of sale includes warranties from the vendor that there are no undisclosed easements.

These warranties should not merge with completion of the sale contract. This will ensure that, if an undisclosed easement is identified after completion, the purchaser will have recourse to the vendor.

Again, your solicitor can assist drafting these provisions.

3. Procure a Survey

A formal survey will identify whether the property is affected by any encroachments — whether they be onto easement areas, on adjoining properties, or by adjoining properties. A qualified surveyor can assist with the preparation of a survey plan.

Bottom Line: If you think your property may be impacted by easements or encroachments, then you should contact us for detailed legal advice relating to the particular facts and circumstances of your property.

As you can appreciate, this article is not intended to provide detailed and specific advice; and you should not act on the basis of any matter contained in this article, without first obtaining more comprehensive professional advice.

Xenos

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