Real estate with an easement is not unusual and can be an excellent investment. Still, the buyer should understand exactly how the easement affects the value before closing the sale.
An easement is a legally binding agreement that allows non-owners or non-occupants specific access to the property (or portion of the property) for one reason or another. It falls under the umbrella of property encumbrance, and the nature of the easement can impact the property value.
Five types of easements
Different easements serve different purposes. The types include:
Easement by necessity: This gives adjacent property owners or occupants access to their land, often because there is no access to the property using public roads. Examples include a home with a few acres situated on a rancher’s larger parcel or a business located on another business’s property, such as a gas station or restaurant in a mall parking lot.
Private easement: This can be an arrangement between neighbors. One may sell a parcel with the understanding that the easement comes with the property, with access increasing its value. Private easements may or may not get transferred to subsequent property owners.
Public easement: This gives the public access to something located on the property. Common examples include historical landmarks or other points of interest on the property. The easement may be implied through years of use or due to a specific decree.
Utility easement: Utilities frequently use private lands to supply customers and need access to service their equipment. The easement may have additional conditions that protect the utility’s interest.
Prescriptive easement: This involves gaining access to the property through an unauthorized but open occupation. A failure to expel the occupant or ask them to leave leads to a prescriptive easement that eventually gives them a legal right to be on the property. This type of easement is seldom desirable and harms the property’s value.
Real estate attorneys can provide insight
Different easements will have varied impacts (good and bad), depending on the circumstances. Those interested in buying real estate with an easement should discuss the pros and cons with an experienced real estate attorney who practices here in Texas. The attorney can also help negotiate a more desirable easement that better addresses their needs.