What it means
An easement is a right to use another person's land without owning it. Most easements are appurtenant, which means they benefit a neighbouring parcel, such as a shared driveway that gives one property access to the road.
An easement in gross has no such neighbouring parcel; it benefits an individual, a company or a public body directly. Utilities are the most common holders.
Electricity, gas, water, telephone and pipeline companies hold easements in gross to install and maintain their equipment on private land. Other examples include a right of way for a public footpath or a right for a person to fish or hunt on another's land.
The distinction matters in property transactions and valuation. The land that carries the burden of the easement is usually worth less, because the owner cannot freely build on or use the strip, and a buyer should check for these rights before purchase.
Lenders and title insurers also look for easements because they affect what the land can be used for. Whether an easement in gross can be transferred or inherited depends on the type and on local law.
Commercial easements held by companies are generally transferable, while personal ones may end when the holder dies. Rules differ considerably between countries and regions, so legal advice is important.
Easements are usually recorded on the property's title records, and they can last for many years or indefinitely. Terms may be negotiated, and the landowner is often paid compensation for granting one.
When a business is buying land, due diligence should include a search for any easements in gross, with questions about what access the holder needs and what restrictions apply. The financial effects can reach beyond the purchase price.
A property with a large easement may be harder to finance, as some lenders reduce the loan amount if part of the land cannot be built on. Insurance, property tax and development costs should all be reviewed in the light of the restricted area, because plans drawn without the easement in mind may need to be redone.
In practice
Real-world examples.
Example
A power company obtains an easement in gross across a farmer's land to install high-voltage lines. The farmer receives a one-off payment of $40,000 and can still graze animals but cannot build under the lines. The payment is recorded in the farm's accounts as income in the year it is received.
Example
A developer buying a $3,000,000 parcel discovers that a gas pipeline easement crosses the back third of the land. The developer lowers its offer to reflect the unusable area and redesigns the buildings to stay clear of the strip. The redesign removes eight planned units, so the developer also recalculates its expected profit.
Example
A local council holds an easement in gross allowing the public to walk along a lakeside path on private land. The landowner remains responsible for the property but must allow access. The owner may also need to take out extra liability insurance to cover walkers on the path.
Case study
Seen in the real world.
Cedar Bend Estates is a fictional property company that agreed to buy a 20-acre site for a housing development at $2,400,000. During due diligence, its lawyer found a recorded easement in gross held by a pipeline company, running across six acres of the site.
The easement prevented building on that strip and required access for maintenance. The valuer estimated that the restricted land was worth about 40% less than a similar unrestricted area. Using the price of $120,000 per acre, the lost value was 6 acres x $120,000 x 40% = $288,000.
This illustrative story shows why title searches matter. Cedar Bend negotiated the price down by $250,000 and planned a park along the pipeline strip, turning the restriction into an amenity for the new homes. The lawyer added a clause to the contract confirming that the seller had disclosed all known easements.
Watch out
Common mistakes.
- Assuming that an easement disappears when the land is sold, when it normally stays with the land and binds the new owner.
- Confusing an easement in gross with an appurtenant easement, which benefits a neighbouring property instead of a person or company.
- Skipping the title search, so that a pipeline or access right is discovered only after the purchase. By then the buyer has already paid for land that it cannot fully use.
Questions
People also ask.
What is the difference between an easement in gross and an appurtenant easement?
An easement in gross benefits a person or organisation, while an appurtenant easement benefits a neighbouring parcel of land.
Can the landowner use the land?
Usually yes, as long as the use does not interfere with the purpose of the easement, such as building on top of a pipeline.
Does an easement reduce property value?
It often does, because it limits how the land can be used, though the effect depends on the size and location of the easement. A valuer will usually estimate the loss from comparable sales.
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