Imagine this. You finally find a property that is perfect for your next commercial vision, so you hire a firm like Commercial Partners to research the property and investigate the title. During this investigation, it is revealed that the property has one or more easements on it.
Easements, if you need a refresher, are an agreement between two parties that dictates how a non-owning party can access the property. It may lay out how businesses can use a shared driveway or how a group of hunters can access your farm acreage, for example. However, these easements may interfere with your vision for your latest commercial property. You may assume that the easements would become void upon the sale to another party, but that’s typically not the case. A prospective buyer is made aware of any easements during the acquisition phase, so they are buying a property knowing that the agreement will withstand a change in property ownership.
But if you really want to alter or terminate a standing easement on a prospective commercial property, what are your legal options? Below, we share some tips for managing easements on a commercial property that you’re interested in purchasing.
Terminating An Easement On A Commercial Property You Plan To Buy
If you’re hoping to terminate an easement on a commercial property you hope to acquire, you have a couple of different options. There’s no guarantee that any of these options will be successful, because the fact of the matter is that if the easement was drafted by a professional and the beneficiary of the easement accesses the property as specified in the easement agreement, then it should withstand any challenges from someone hoping to alter or terminate an easement.
With that said, we’ve helped countless parties navigate unfortunate easements, and we want to share some tips for increasing the likelihood that you can get the agreement adjusted or ended.
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Talk With The Beneficiary - You’d be amazed at what a simple conversation with the other party can do. They may no longer need easement access and be willing to sign off on its termination, or they may be willing to adjust the terms of their easement access based on your vision for the property. If you can explain your interests and be reasonable, oftentimes you can find a middleground that works for both parties.
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Buy Them Out - Everyone has a price, and if asking to terminate or alter the easement doesn’t work, you can always try to buy out the easement. In other words, you would offer a set amount of money to the easement beneficiary in return for them agreeing to sign off on the termination or alteration of the easement. Depending on your commercial vision, it may be well worth it to simply buy out the easement.
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Review The Easement End Date - Most easements are only valid for a set amount of time. Ask your title clearing company to determine when the easement stands to expire. If the easement is only valid for a little while longer, you may be able to purchase the property and simply wait until the easement ends. Understanding when the easement is set to expire can also help with negotiations with the other party if you’re hoping to put an end to it sooner.
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Challenge In Court - A final and more confrontational way to terminate an easement agreement is by challenging its standing in court. Again, the court won’t just grant you your wish because you’re the new property owner because you knowingly took on a property with an existing easement, so you’ll have to prove why the easement should cease. The best way to do this is to showcase that the easement beneficiary is accessing the property in violation of the specifics laid out in the easement. If you can prove that the beneficiary isn’t following the rules laid out in the original contract, the court may rule in your favor. Again, this should only be considered when other methods have failed and if you have evidence that the easement beneficiary is violating the terms of the easement.
For help navigating existing easements or uncovering their existence during a potential property acquisition, reach out to the team at Commercial Partners today at (612) 339-2470.