When you buy real estate for the first time, you sometimes come across a bunch of unfamiliar terms.
What's a pre-settlement inspection?
What's a trust account?
And another term that is probably relatively unusual to new developers or investors is "easement".
What are easements and why are they important for developers?
The legal definition of an easement is “the right to cross or otherwise use a portion of someone else’s land.”
But what does that mean exactly?
Well, it can mean that you can't build over that portion or easement of land because it's almost like sacred ground.
Now that doesn't mean that your new property is located on an old cemetery or burial ground.
It means that the easement is perhaps land that contains essential services.
That's why it's vitally important for small developers to thoroughly understand easements before they purchase a property because it can have an impact on whether the project is still financially viable.
Buyers can usually find the necessary information on the location of any easements on the property title.
What are the different types of easements?
An easement is the right over another person's land for a specific purpose, but what are those purposes?
One example is a carriageway.
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This easement is an old term for what is essentially a shared driveway.
Most commonly these easements prevent the lot without road access from being landlocked.
In most cases, an easement will burden one lot while benefiting another.
If we look at the example of a carriageway, the easement will burden the lot it is over, but benefit the lot that it allows access to.
Examples of different easements include:
- Right-of-way easement (easement of way) – is where people are allowed to pass through a defined strip of land on the property.
- An easement for services – is to convey essential services to a community of people. E.g. electrical, gas, water, or telephone lines.
- Easements of support (pertaining to excavations) – similar to an easement for services but will require excavation works e.g. establishment of drainage pipelines, natural gas lines power, telephone lines.
- Easements of “light and air” – this may restrict the construction of walls or buildings in favour of another party's access to light and air (or views in other words).
- Rights pertaining to artificial waterways and sewerage – this deals with rights and restrictions for waterways, canals or sewerage.
Can I dispute an easement on a property?
When it comes to an easement on property, just as there are many different types, there can be disputes that arise, especially when the easement favours one landowner over the other.
If there are easement disputes, it's recommended that independent legal advice is sought to ensure that each party's rights and obligations are clarified.
Legislation regarding easements can vary so it's important to source legal advice in the relevant state or territory that the property is located.
In Queensland, for example, to enable the rights of an easement to be enforced, it must be registered on the title of the land burdened and the land that benefits from the easement.
It's also recommended that when a property is being purchased that your conveyancer or lawyer determines whether any easements are registered on the title and, if so, whether there is any impact by the easement on your intended use of the land.
An easement can only be changed or removed when both parties agree to it.
If no agreement can be reached, the matter can be taken to court for a decision.
Developers must also apply to the relevant government department for permission to have an easement removed or changed.
The information provided in this article is general in nature and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information you should consider the appropriateness of the information with regard to your objectives, financial situation and needs.