Commercial real estate transactions include negotiations based on various information about the land in question. One issue that may come up when you are buying or selling commercial real estate is whether there are any easements on the land, and if so, what they are. You need to understand exactly what an easement is and what effect it will have on your use and enjoyment of the land you are dealing with. Some easements are express, but others are implied.
What Are Easements?
In very basic terms, an easement is a right to use or cross the property of another. A classic example is where a parcel of land is not adjacent to any public roadways. The owner of this land may have an easement allowing them to drive across another person’s land in order to obtain access to their own land. Another common easement is the type often held by utility companies which allow them to come onto land in order to do certain tasks related to the upkeep of utility services. Usually easements are in writing so everyone involved can have a fair and clear understanding of what area is affected by the easement and what rights an easement holder has. These easements are called “express easements.” However, some easements are not express. Some easements are known as “implied easements.” These are easements that are inferred by courts based on principles of equity.
Richardson v. Franc
An important case regarding implied easements in California was decided in Richardson v. Franc. While this case deals with residential real estate, its lessons about easements are important for commercial landowners as well. In this case the Richardsons bought a home and had an easement to use a 150-foot road owned by their neighbors in order to access their land. Thier use of this road was pursuant to an “access and public utility” easement. When they purchased their home the road was already improved with lighting, irrigation, and landscaping, and the Richardsons continued to maintain these features. The express easement did not mention a right to any of these features. After they had owned their home for a few years, Franc purchased their neighbor’s land.
After Franc owned the neighboring land subject to the easement for six years he demanded that the Richardsons remove the landscaping and support systems from the easement area. He claimed that the recorded easement did not allow these improvements or uses. So the Richardsons sued, and they won. The trial court and the appellate court both agreed that the Richardsons met the requirements for an irrevocable license.
What are the Requirements for an Irrevocable License?
There were four things in the Richardson’s case that gave them the right to an irrevocable license. First, they and their predecessors had spent substantial funds on the improvements. Second, the landowner had full knowledge of the facts surround the implied license. Third, the landowner did not object to the land use for years. Finally, fourth, express easements can be layered with implied easements or licenses, a fact applicable to the case at hand.
The main moral of the story for landowners here is that one cannot acquiesce to an implied easement or license for an extended period of time and then only complain about it once the land users have invested financially in the land. It appears that if a landowner does not object to a use like the Richardsons’ within a year, then the landowner loses his or her right to object.