EASEMENT and Road Issues
by Kenneth E. Davison
Easements in General: Easements discussed in this article are comprised of conservation easements (which provide a method of preserving the character of property while gaining certain tax advantages) as well as the more common access/road type easements. Both types of easements can have significant impacts on the purchase and sale of real estate. In situations where easements are located on the property being purchased, both title and the value of the property are affected. In situations where the property being purchased has access by way of an easement, or there are access problems which require an easement to cure the problem, then obtaining a proper easement can become a necessity to the transaction. In either instance, if easements are an issue, careful attention should be paid to insure that the nature, duration, scope and effect of the easement is understood before the closing. Problems involving unrecorded easements, easements by prescription or by necessity, can turn what would otherwise be an easy closing into a drawn out, arduous and expensive process which may require litigation to resolve.
Conservation Easements: Conservation easements are becoming more common place and provide a method for Texas landowners, developers and purchasers alike to preserve the pristine character of certain properties while maximizing tax benefits.
Section 59, Article XVI of the Texas Constitution acts as the basis for the creation and operation of conservation and reclamation districts in Texas. Chapter 183 of the Texas Natural Resources Code, entitled the "Uniform Conservation Easement Act" (the "Act") defines and provides the basis under which conservation easements can be created, conveyed, recorded, assigned, released, modified, terminated, altered or affected. The Act is relatively short and is comprised of five sections, sections 183.001 - 183.005.
Section 183.001 defines a "Conservation Easement" as follows:
Section 183.002 provides generally that a conservation easement is treated in the same manner as other easements unless there is a specific provision to the contrary in the Act. Section 183.002 also provides:
- "Conservation Easement" means a nonpossessory interest of a holder in real property that imposes limitations or affirmative obligations designed to:
- retain or protect natural, scenic, or open-space values of real property or assure its availability for agricultural, forest, recreational or open space use;
- protect natural resources;
- maintain or enhance air or water quality;
- preserve the historical, architectural, archeological, or cultural aspects of real property."
Section 183.003 sets out who has standing to bring actions related to conservation easements and includes the following:
- a conservation easement is unlimited in duration unless the instrument creating it makes some other provision;
- all interest owners of the property sought to be burdened with the easement must be a party to the conservation easement before their interests are affected;
- must be created in writing, acknowledged and recorded in the deed records of the county in which the property burdened with the easement is located and must include a legal description of the real property which is burdened with the easement; and
- (as a deterrent to those that terminate a conservation easement) provides for a "roll back" type of tax to apply to property which is no longer burdened with the conservation easement.
Section 183.004 addresses issues of validity as they relate to conflicts with the law affecting common law easements. Section 183.004 provides that a conservation easement is valid even though:
- an owner of an interest in the real property burdened by the easement (the "servient estate");
- a holder of the easement;
- a person having a third-party right of enforcement; or
- a person authorized by some other law.
Section 183.005 is more of a housekeeping provision and addresses issues related to interests created before and after the enactment of the Act as well as conflicts with other statutes that may exist or arise after enactment.
- it is not appurtenant to an interest in real property;
- it can be or has been assigned to another holder;
- it is not of a character that has been recognized traditionally at common law;
- it imposes a negative burden;
- it imposes affirmative obligations on the owner of an interest in the burdened property or on the holder;
- the benefit does not touch or concern real property; or
- there is no privity of estate or of contract.
Generally, a conservation easement can be thought of as a negative covenant - much like restrictive covenants in subdivision declarations. Again, generally speaking, a conservation easement is a restriction on land which prohibits the alteration of some specific condition of the land, such as its natural state, its open nature, ecology, or scenic attributes - the purpose being to maintain the property in its present condition. An example would be an easement created for the purpose of preserving a scenic tract of land with pristine watercourses.
The easement is created by a formal written agreement and is governed generally by the same rules that affect other conveyances of land. The statute of frauds as well as other provisions of the Texas Property Code, including those related to the recording of conveyance instruments, also apply to conservation easements. In most instances, when the conservation easement is created, the landowner divests himself of the right to use and control the property and conveys the property to a conservation agency. Many times this agency takes the form of a land trust formed with the express purpose of preserving, conserving and maintaining the conservation easement. Since the inception of conservation easements, a number of organizations have been formed which have as their purpose the acquisition, preservation and maintenance of properties through conservation easements. Examples of these kinds of organizations include the Natural Area Preservation Association (NAPA) and the Nature Conservancy. Specialty trusts can be created to handle individual properties if desired. One of the advantages of a conservation easement is that private property remains private property. Unless otherwise specifically provided for in the easement documents, the public is not granted access to the easement area. As previously indicated, another advantage of conservation easements is the tax benefits. Conservation easements provide tax benefits in at least three ways:
- Income tax deductions: The Internal Revenue Service may grant the donor of a conservation easement an income tax deduction equal to the value of the easement as determined through a certified general appraisal. This amount can be deducted from the landowner's income tax for up to six consecutive years, or until the full value of the easement has been credited, whichever occurs first.
- Estate tax deductions: Upon the death of a landowner, the probate court appraises the estate to impose an estate tax. When an estate is "land rich," and the land is open to any type of use, it will generally be valued at the highest rate of full residential and commercial development. The tax due is often high enough to force the sale of the longtime family land. Conservation easements can prevent high valuations on land by restricting land uses, resulting in lower probate appraisal and the subsequent tax burden. Any landowner considering passing land to members of their family should investigate this option thoroughly.
- Local property taxes: Easements may lower the annual tax value of land. A certified appraisal that demonstrates the reduction in value gives cause for revision in local tax bills.
Definition, General Background, Terms: An easement is the grant of a right to use the land of another for a specific, usually limited purpose, but it is not a conveyance of the land itself. The owner of the land retains the right to use the land for any and all purposes which are not inconsistent with the grant of the easement. Easements may be created by express grant, by implication, by necessity, by estoppel, and by prescription. Typical easements include those which grant another the right to use the land as an access roadway, for utilities, drainage, parking or other similar activities. The grant of the easement can be for a limited period of time or perpetual. Normally, if the grant is silent as to the time period, it will be deemed to be perpetual or until such time as the purpose for the easement is extinguished. Similarly, the grant of an easement is deemed to be non-exclusive unless the grant specifically provides otherwise.
In discussing private easements, one should become familiar with the two types of estates which are created - the "dominant estate" and the "servient estate." The "servient estate" is the parcel of land owned by the grantor of the easement while the parcel benefitted by the easement is referred to as the "dominant estate." The following is an example which demonstrates the servient and dominant estate:
The owner of Lot A grants an express access easement across Lot A to allow the owner of Lot B to construct a driveway across Lot A to allow access to Lot B. Lot B benefits from the easement across Lot A and would be the "dominant estate." Lot A (the lot on which the easement is located) would be the "servient estate."
Types of Easements: There are several types of easements which you should become familiar with:
Interpretation and Grant: Generally the grant of the easement is determined in the document which creates the easement; and in most cases, parol evidence (evidence outside the document creating the easement - such as verbal agreements, etc.) cannot be used to create or modify the easement. .
The easement description must be sufficiently definite on the face of the document (or in a referenced document) that the land which comprises the easement can be identified and located with reasonable certainty. "Reasonable certainty" has been interpreted to mean that the description must be sufficient to permit a surveyor to go on the land and locate the easement from the description. A map of the property can be attached or referred to in the document to aid in describing the easement.
In the event there are questions regarding the interpretation or construction of a document creating an easement, the general rules applicable to the construction of deeds will be used to construe the easement document. As such, in situations involving ambiguities in the easement document, the courts may look to collateral documents to construe the grant.
The granting of an easement also includes the right to do what is reasonably necessary for the full enjoyment of the rights granted in the easement. These additional rights have been interpreted to include the right to use the easement for any purpose connected to the use of the property as well as future uses which are consistent with the grant by the one entitled to use the easement, so that the easement owner can enjoy or carry out the purpose or object of the original grant. As an example, in one situation a court allowed adjacent property owners to use an access easement created by estoppel over an unpaved roadway to access their property for both residential and business purposes where the original agreement creating the easement contained no restrictions on its use, and there was a long period of time when the roadway was used for both residential and business purposes. In another case, a court permitted a power company to remove and relocate old power lines with new ones along with the structures necessary to support the new lines. The court found that the new lines and structures were not an additional burden even though technically the new lines and structures overlapped other easements granted to the same power company. On the other hand, the courts have interpreted the grants of an easement for "driveway purposes" to include only ingress and egress purposes, and specifically, to exclude parking purposes.
The grant of the easement should be carefully reviewed when determining the scope of the easement. As an example, generally the owner of the easement - the "dominant estate" - is charged with the obligation and responsibility to maintain and improve the easement to an extent reasonably necessary to promote the purpose for which it was created; however, these rights can be contracted for in a different manner, such as shared maintenance rights and obligations, etc. This is particularly true when the grant of an easement is not exclusive and is shared and used by a number of different parties, as in the case of an access easement used by numerous property owners to reach their respective properties.
Owners of "servient estates" are prohibited from unreasonably interfering with the dominant estate even though the dominant estate owner owns the fee simple title to the property. When an easement is created, a duty is also created on the owner of the servient estate to use the servient property in a manner that does not impair or destroy the paramount right of use created in favor of the dominant estate. Generally, dominant estate owners have a duty to use ordinary care regarding the use of the easement, as well as a duty to maintain the easement.
Terminating Easements: Easements can be terminated or extinguished by: (1) operation of law; (2) abandonment; (3) adverse possession; (4) completion of purpose; (5) merger; (6) cessation of necessity, or (7) non-compliance with conditions of the grant.
- "Express Easements" are easements created by express agreements.
- "Easements Appurtenant" are easements which benefit a specific parcel of land regardless of the owner's identity and which have a dominant and servient estate. Easements Appurtenant are easements which are generally referred to as easements which "run with the land."
- "Easements in Gross" are easements which are personal to the grantee only and are not generally assignable or transferrable. These are the kinds of easements which are granted to utility companies such as the Lower Colorado River Authority for public utility easements and can be either specific grants with detailed legal descriptions of the property involved, or they can be "blanket" easements which cover broad tracts of land even though only a small portion of the property may actually be used.
- "Easements by Necessity" are easements implied by law (they are not express easements) when a grantor conveys part of a tract of land while retaining the remaining acreage for itself, and no other access exists to the property conveyed other than on the grantor's remaining acreage.
- "Easements by Prescription" are easements implied by law (they are not express easements) in situations which involve long term adverse uses by the claimant under some color of right. To establish an easement by prescription, the claimant must prove the same elements as in a claim of acquisition of property by adverse possession. Generally the claimant must show that his use of the land was: (a) open and notorious; (2) adverse to the owner's claim of right; (3) exclusive; (4) uninterrupted; and (5) continuous for a period of at least 10 years. Prescriptive easements are in the nature of a forfeiture of property and are not favored by the law - consequently they are narrowly construed.
Dealing with Easements: In the event it becomes necessary to address a particular easement issue, the obvious course is to first attempt to negotiate and contract for whatever rights and/or releases you might need; whether it be to acquire access rights in the form of an easement or to extinguish or terminate an easement right by obtaining a release or termination agreement. In these instances, understanding the nature of the various parties' rights is important in determining the type of consideration which might be necessary to accomplish your purposes. Careful examination of any granting documents as well as the background of the parties and properties involved (including previous lawsuits, agreements, etc.) can be important. Get with the title company to obtain as much information as possible in these kinds of situations. When reviewing easements, you should at the very least, READ the documents which are recorded in the real property records (do not just glance at them). These should be provided along with the title commitment or abstract involved in the transaction. Many times these documents will indicate that there are "blanket" easements which affect the entire tract even though there has been only a very limited and confined area used for the easement (if it has been used at all). If possible, blanket easements should be limited or eliminated before the closing and should be objected to as an exception to title. In the event resolution cannot be reached by negotiation and agreement, then it may be necessary to resort to the courts for relief.
- Operation of Law: Easements can be abandoned or extinguished by operation of law based upon misuse or non-use, as well as other theories. However, if the use contemplated in the grant could be construed to include a lessor use (such as a roadway easement which does not specifically exclude pedestrian traffic), then the mere fact that the primary use ceases and a lesser use continues, does not work a termination or extinguishment of the easement. Moreover, mere misuse alone will normally not be sufficient to terminate the easement. The misuse must make it impossible to effectuate the purpose for which the easement was created.
- Abandonment: Easements can be extinguished or terminated by abandonment. As generally in real estate matters, the courts do not favor abandonments. Normally an abandonment occurs when the use for which the property is dedicated becomes impossible, so highly improbable as to be practically impossible, or where the object of the use for which the property is dedicated, wholly fails. The circumstances must conclusively establish a definite act evidencing an intent to abandon and terminate the rights held by the easement owner.
- Adverse Possession: As in other cases involving an interest in real property, rights in the servient estate of an easement can be lost by adverse possession. Easements created or obtained by prescription may also be lost by adverse possession.
- Completion of Purpose: If an easement is created for a specific purpose, then it terminates when the purposes ceases to exist or is completed or fulfilled.
- Merger: As previously discussed, two estates are created upon the granting of an easement - a dominant estate and a servient estate. If both the dominant and servient estate are owned by the same person, a merger results and the easement is extinguished.
- Cessation of Necessity: An easement for necessity is more in the nature of a temporary right which is created by operation of law (as opposed to an express easement); and as a result it only exists so long as it is both necessary and convenient. The easement by necessity terminates when the necessity no longer exists.
- Non-compliance with conditions: In cases involving express easements, such easements can be extinguished or terminated when the express conditions contained within the granting documents are not met. An easement held on a condition subsequent terminates when the condition is broken, and the grantor makes entry with an intent to forfeit the grant. The grantor must reenter or take other similar actions evidencing the intent to exercise the right to terminate for such termination to become effective.
Judicial Procedures: The courts should be utilized as a last resort. In most instances, filing suit to obtain, interpret, enforce, limit or terminate an easement is both expensive and time consuming. Generally speaking, judicial relief is not a viable solution to resolve easement issues pending an imminent closing. Judicial relief is more often a viable tool for issues arising after closing or when there are no closings pending. Judicial procedures are viable procedures in situations where negotiations have failed or in situations where negotiations are impractical. In other situations there are significant monetary concerns for both sides and recourse to the courts can be economically the best choice.
In the event it becomes necessary to resort to legal processes, careful attention should be paid to several factors: (1) the kind of relief to be sought (injunctive, declaratory, damages, etc.) and (2) the time and monetary restrictions involved in bringing such an action. The first of these factors requires a careful analysis of the issues involved and the objectives sought to be obtained and will dictate the type of pleadings to be prepared. The second factor (time and monetary restrictions) will impact decisions related to whether or not the action should be filed in the first place; and even more importantly, whether or not the expectations of the parties are realistic. Litigation is both expensive and time consuming. It can drag on for months and years. If appeals are involved, it can take many years to resolve.
Declaratory Actions: If the purpose of the litigation is to obtain a judgment which interprets, establishes, limits, or terminates an easement, declaratory relief under the provisions of the Declaratory Judgment Act is a proper form of action to bring. The provisions of the Declaratory Judgment Act are being used increasingly in these kinds of suits because the act provides for the granting and recovery of reasonable and necessary attorney fees and costs as part of the recovery. It should be noted that the court has the discretion of awarding these fees and costs as it deems just and fair, which sometimes is a very sharp double-edged sword. Suits for declaratory relief can also include requests for injunctive relief. The following are some examples where injunctive and declaratory relief has been requested:
Quiet Title Actions: Suits can also be brought to quiet title or remove clouds from title regarding easements. There are no provisions for recovery of attorney fees in this type of action unless it is brought under the auspices of the Declaratory Judgment Act or coupled with some other action which permits the awarding and recovery of attorney fees. Suits to quiet title are used to remove easements from a title or to establish and confirm that a landowner has use of a particular easement right.
- Landowners brought an action to enjoin purchasers of adjacent tract from using easement to reach the purchasers' land.
- Owners of adjacent parcel filed an action seeking an injunction and declaratory judgment to secure and confirm right to use road across adjacent tract.
- Easement grantees brought action to enjoin landowners from obstructing roadway easement by maintaining gate.
- Property owner filed a declaratory judgment action seeking declaration of existence of easement for the use of driveways, cutouts, and parking lots on adjacent tract.
- Declaratory judgment sought to construe individual claims regarding an easement appurtenant for ingress and egress to an airport hanger.
- Driveway easement holder filed suit seeking declaratory relief regarding right to park on driveway - with landowner counterclaims for declaration that driveway easement did not include right to park.
Injunctive Relief: Injunctive relief is available as well. The general rules regarding injunctions apply to easement cases where injunctive relief is sought. Generally, injunctive relief is based in equity, and as such, the person seeking injunctive relief must show that they have no adequate remedy at law (such as damages); and that the injury will be irreparable. By way of example, a landowner may seek injunctive relief to protect an easement against interference, encroachment, or obstruction. Courts may order an obstruction removed and the easement restored to its former condition and may grant a temporary injunction to restrain interference with an easement,
Damages: Owners of the dominant estate may seek and recover damages for interference with their rights by the servient estate owner. Damages available to the dominant estate owner for interference with the easement rights include the following: (1) cost of repair; (2) compensatory damages; (3) loss of use of property measured by rental value; (4) loss of value of property's products or crops, if applicable; and (5) exemplary damages.
This article is an excerpt from materials written by Kenneth E. Davison and presented at a continuing legal education seminar on easements.