A commercial easement is an agreement between two parties that dictates how one party can access another party’s property. For example, an easement may be created to allow a business to use a shared driveway in order to better serve their customers, or for a farmer to cut through a neighbor’s property in order to access some additional farmland they’ve purchased. Easements can be a great way to prevent disputes and to make expectations crystal clear as to how certain individuals are required to act when accessing someone else’s property.
Forming an easement with another party isn’t incredibly tough, but there are some things you’ll want to do to ensure it is created with everyone’s best interests at heart. Below, we talk a little more about drafting an easement and explain which parties need to consent for an easement to become official.
Drafting An Easement
At Commercial Partners, drafting easements is something we do with great frequency for our clients. We connect with both parties and really understand what they want for an easement, and we don’t stop until both sides are satisfied with the arrangement. We also make sure that certain easement stipulations are clearly defined in the agreement. For example, we may lay out that one party has the option to terminate the easement if the other party sells their property, or we may write that the easement is to last for 20 years barring mutual agreement to dismantle the easement. It’s not just about drafting an easement that is satisfactory at the moment - both parties also need to consider their future situations when coming to an easement agreement.
So once the dust has settled, a verified form of the easement needs to be signed for the record. But who needs to sign it? In many instances, the only person that actually needs to sign the easement is the named title holder of the burdened property. In other words, the person who is allowing others to access their property. Those who are benefitting from the easement typically sign the agreement as well, but they may not need to in order for the easement to be official so long as the burdened property owner has agreed to and signed the easement.
Interestingly, there is another party that may need to be considered when an easement is drafted, and that’s the mortgage holder of the burdened property. Because the burdened property could in theory lose some value as a result of the new easement, the lender or the holder of the mortgage will need to be informed of the intention to create a new easement on the property. The mortgage holder can agree to the easement or they can reject it, but a rejection will not stop the formation of the easement. However, if the mortgage holder decides not to agree to the new easement, they may be able to extinguish the easement in the event that the property is foreclosed on. Oftentimes easements remain intact when a commercial property is sold to a new owner, but if a lender does not agree to an easement and the property is subjected to foreclosure, the lender may have the ability to terminate the easement without consent from the owners of the burdened or benefitted parcel.
If you need help drafting a commercial easement for your property, let us make sure everything is done correctly to protect your current and future interests. For more information on how we can assist, or for help with a different aspect of commercial real estate, reach out to the team at Commercial Partners today at (612) 337-2470.