By: Stacey Shea – Published in the BizWest Thought Leaders column in September 2020
It is increasingly common for property owners to divide their properties into two or more lots. While the resulting lots are owned by a single owner or related parties, there is not a lot of thought given to access and maintenance of the lots. However, as the lots begin to be sold to unrelated parties, issues can arise. To avoid issues later, the subdividing property owner should record an Access and Utility Easement Agreement (“Easement Agreement”) which will apply to the newly created lots at the time they are created.
The division of property into smaller lots requires the recording of a new plat (essentially a map) depicting the property lines of the new lots. Often these new plats create access and utility easements by marking an easement area and including a note on the plat. However, these newly created easements rarely make it clear what the rights and responsibilities are of each lot owner. In order to ensure each lot owner has a clear understanding of how cost sharing or performance of repairs, general maintenance, improvements, and even snow removal will be addressed, the sub-dividing owner should execute and record an Easement Agreement. If this wasn’t done, the new owners of the lots can enter into an agreement between themselves.
An Agreement between two lot owners may be simple and straightforward. The benefiting party generally bears the burden of costs and repairs. However, when an easement crosses or benefits multiple lots, cost sharing and maintenance responsibilities become more complicated. Do you want to share costs equally or establish a formula related to use? Should unimproved lots (construction of a residence or other building has not yet begun) be exempt from costs until a set time? Does the easement allow for expansion of the use of the property from that at the time the easement was created?
Establishing an easement can be simple, how one will manage and maintain it raises many questions. This can be done either by the sub-dividing owner or the purchasers of the lots. Avoid confusion later by establishing an Easement Agreement in the beginning.
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