As published in BizWest’s Thought Leader Column, January 2023
It is increasingly common for property owners to divide their properties into two or more lots, with the resulting lots being owned by either a single owner or several related parties.
Unfortunately, there is often not much thought given to the access and maintenance provisions of the divided lots, which can result in conflict between the property owners. To avoid these conflicts, the subdividing property owner should record an Easement Agreement that clearly establishes the rights and responsibilities of the owners of each lot.
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. At times, these new plats create access and utility easements by marking an easement area and including a note on the plat. However, without an Easement Agreement for these newly created easements it is rarely clear as to the rights and responsibilities of each lot owner. An Easement Agreement helps 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. Recording the Easement Agreement also puts future owners on notice of the rights and responsibilities set forth therein.
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 may become more complicated, with questions arising such as: 1) Should costs be shared equally or calculated by a formula related to use?; 2) Should unimproved lots (construction of a residence or other building has not yet begun) be exempt from costs until a set time?; or 3) Does the easement allow for expansion of the use of the property from that at the time the easement was created?
Although establishing an easement can be simple, how one will manage and maintain it can raise many questions. The best course of action is for either the sub-dividing owner or the purchaser(s) of the lots to establish an Easement Agreement as soon as the lot is divided or lots resold, and to seek the services of an experienced attorney to draft and review the agreement.
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