Do Owners Get Compensation for Easement?

When purchasing real estate, identify any possible real estate easements on the land before completing the purchase. What you assume might be a buildable section of the property might actually be some sort of easement, limiting your use of the land. Often, the property owner does not receive property easement compensation.

Real Estate Easement

A real estate easement is the right to use someone else’s land for a specific purpose. A common type of easement is a utility easement, which gives the utility company the right to access a certain portion of your land. Yet, there are other types of easements, such as the party wall easement, involving a wall located on the property line between two lots.

There is no compensation for the easement per se, yet the property owners may each be responsible for certain expenses involving the wall. Other types of easements include easement by prescription, easement by condemnation, and easement by necessity.

Creation of Easement

There are several ways to create a real estate easement. It might be a written agreement between the property owner and the party using the easement, in which case there may or may not be compensation involved. Sometimes a person selling the property will create an easement before conveying the property to a new owner. Therefore, he is in essence creating an easement on his own land and would not compensate himself for the easement.

Another way to create an easement is by continual use of the land, which does not involve compensation.

Easement by Prescription

Easement by prescription is an easement created by continual use of a section of the land by someone other than the property owner. The use must be continual, open, and hostile, meaning the owner of the property did not give the person permission to use the property. For example, a neighbor might be driving over a portion of his neighbor’s land on a regular basis.

Laws applying to an easement by prescription vary by state. However, typically this type of easement would not involve compensation to the property owner.

Easement by Condemnation

Condemnation in this instance refers to the government "appropriating private property against the will of the owner." Only certain government agencies have the legal power to appropriate private property. When they do, the property may only be appropriated for public use. Private property may not be appropriated to provide a benefit to any private person or company, or solely for economic development purposes.

An easement obtained through the right of eminent domain for the public purpose involves compensation to the property owner if there is a loss of property value. This type of easement is called an easement by condemnation.

Easement by Necessity

If a property owner sells part of his land, yet the portion of land he sells is landlocked by his remaining portion, an easement by necessity gives the new owner access to the land he is purchasing. Under common law, the new owner is presumed to have been granted an easement from the previous owner to pass over their property. The easement by necessity may lie dormant through several transfers of the land through various buyers and sellers.

Easements of necessity can create issues later on because they aren't necessarily recorded anywhere in writing. Many of them rely on an understanding between the property owner and the buyer. A future property buyer may not necessarily be aware they are buying a property that is subject to an easement.

It is always a good idea when buying property to ask your realtor and your attorney whether the properties you are most interested in are subject to any real estate easements. Then you will be entering the deal with your eyes wide open and having received advice about property easement laws.