So you’ve found a property that ticks all the boxes and fits within your budget, but there’s a catch – it has an easement.
Should you be concerned? To make an informed decision, it’s important to understand what an easement really is and how it could affect your plans for the property, as well as its future saleability.
In this guide, Debbie Nelson sheds some light on the ins and outs of easements. She explains what an easement is, the most common types and what you can do to protect your interests when buying a property with an easement.
What is an easement?
An easement gives a person or entity the legal right to use a property they don’t own for a specific purpose.
For example, a property might have an electricity easement in favour of Vector – this means that Vector has the right to enter the property to install or maintain the electricity network on, under or over the land.
The Land Transfer Regulations 2018 set out, in general terms, the rules and obligations relating to easements. However, it’s always a good idea to check the easement document itself, as this document has the ability to substitute the general regulations for more tailored terms.
What are the most common types of easements?
Generally, easements are granted in favour of neighbouring property owners, the council or utility companies, allowing them rights of way or granting access for the installation or maintenance of certain utilities.
Here are a few common types of easements:
- Right of way – where a property owner is granted the right to use a particular driveway, path or accessway
- Right to convey water, electricity, telecommunications or computer media – usually in favour of Vector, Chorus or a neighbouring property
- Right to drain water or sewage – typically in favour of neighbouring properties or occasionally the council
- Party wall – if there are adjoining townhouses that share a supporting wall, the easement would set out the arrangements between owners (such as maintenance obligations)
- Eaves encroachment – if the eaves of one house extend over an adjoining property (often the case with townhouses), the easement would give that property owner the right to enter the other property to maintain or clean the eaves
How can easements affect a property purchase?
When you’re buying a property, there are a few reasons why it’s important to know about any easements that apply.
Firstly, if there’s an easement on your property, you’ll need to know that you can’t prevent someone who has an easement right from, for example, entering the property and digging up the soil to access the drain.
Secondly, it’s important to understand how maintenance costs are to be shared, if applicable. A right-of-way easement for a driveway, for instance, will generally set out who’s responsible for maintaining the driveway. Costs are usually shared equally, but if one property owner has greater use of the driveway, that owner will sometimes be responsible for paying a larger share of maintenance costs. The easement may also set out what happens if one party damages the driveway.
Finally, you’ll need to know if there are any restrictions that affect how you can use the property. An easement will sometimes state that you can’t build a structure (such as a shed or fence) on certain areas of the property, as this would prevent access to something like a drain.
Do easements deter potential buyers?
Most of the time, easements aren’t problematic enough to sway someone’s buying decision on a particular property.
In saying this, we have occasionally been involved in transactions where a purchase didn’t go ahead due to concerns about an easement, as easements may feel burdensome to some owners.
Therefore, it’s important to consider the particular easement and think about whether it would likely have an impact on future saleability.
How we can help
Before bidding at auction or making an unconditional offer on a property, it’s crucial to seek legal advice to ensure you are aware of (and happy with) the terms of any easements that apply.
We can review the property’s record of title and help you understand any easements in place (as well as any covenants or caveats), allowing you to make an informed decision.
If you’d like our assistance with your next property purchase, get in touch on enquiries@armstrongmurray.co.nz or 09 489 9102.
This article is brief and general in nature. You should not treat it as legal advice and should seek professional advice before taking any action in relation to the matters dealt with in this post. Armstrong Murray accepts no liability for losses suffered by any person or organisation who may rely directly or indirectly on this post.
