What is a Reciprocal Easement Agreement?
A reciprocal easement agreement is a contractual arrangement whereby two or more property owners agree to share certain rights of ingress and egress, or the right to enter and exit an area, in the event that one of the properties is subdivided. In the vast majority of cases a reciprocal easement agreement must be in writing in order to be enforceable under the statute of frauds. A well-written and legally sound reciprocal easement agreement is an effective tool that helps the parties avoid boundary litigation as well as expenses related to subdividing their property in the future.
Reciprocal easement agreements also present the parties with the opportunity to allocate expenses associated with the easement or other easement issues. It is not uncommon for property owner A to construct a road to the property owned by property owner B for the express purpose of allowing property owner B to access his or her property in the event the property is subdivided. Thereafter , if owner A wishes to subdivide his or her property, owner A and owner B can agree that they will split the expenses associated with paving and maintaining the road that has already been constructed.
We help clients negotiate and draft reciprocal easement agreements between many entities, including but not limited to, neighbors between whom a road or walkway must be maintained and landowners who seek to avoid impact fees by constructing and sharing in the expense of a road on the property.
Elements of Reciprocal Easement Agreements
A reciprocal easement agreement (REA) refers to the recorded document that establishes and defines the rights and obligations of two or more parties with respect to the use, operation and maintenance of an easement. The REA will identify the parties, describe the easement and other issues including: the character and purpose of the easement; the applicable costs, obligations and responsibilities of the parties; the establishment of a management committee of all parties to govern the easement and enforce its terms; and/or remedies and limitations on liability. REAs may be used in a number of different contexts and for several different purposes.
In the context of fee developers, certain essential components are typically included in REAs, including:
An REA is frequently used for easements with physically adjoining properties, for example, by retail stores within a shopping center complex or between parcel owners in a commercial or industrial park. An REA can provide for the use of one party’s property by another party and address issues such as pedestrian and vehicular access, parking spaces, signs, lighting, stormwater facilities and utilities. As is the case with ERAs in residential communities, thoughtful planning and consideration to the terms of an REA can help ensure that the rights of the parties are properly reflected in the document and, ideally, reduce or eliminate future disputes.
Advantages of Reciprocal Easement Agreements
A reciprocal easement agreement offers a range of benefits to the parties involved. One of the most significant advantages is that it provides improved access to resources. For example, in a commercial setting, two businesses may benefit from having a reciprocal easement that allows customers and deliveries to access both locations without the other’s property. Similarly, in a residential area, neighbors may agree to a reciprocal easement to create a driveway or pathway that provides access to a shared feature, such as a park or recreational area.
Another key benefit is that a reciprocal easement can result in shared maintenance costs. Through a clearly defined agreement, the parties can agree to a fair and equitable distribution of costs associated with the maintenance and repair of shared resources, such as roads, parking lots, or recreation facilities. This not only removes the burden of sole responsibility but also ensures that each party’s invested financial interests are protected.
In addition to improving access and reducing costs, reciprocal easement agreements also enhance surrounding property value. When properties share improvements, the value of each parcel often increases. For commercial enterprises, this is particularly advantageous as it provides increased visibility, traffic, and convenience for customers. For residential properties, a well-maintained and easily accessible shared amenity can not only enhance the quality of life for residents but can also increase the desirability and sell-ability of properties in the area.
Finally, reciprocal easement agreements can be a tool for conflict resolution between parties in which clear, mutual agreement and understanding is essential to the utilization of shared property or facilities. By eliminating grey areas, vague terms, and imprecise delineation of responsibilities and expectations, a clearly defined reciprocal easement agreement can improve relationships among those who rely on, or value, a given resource.
When effectively implemented, a reciprocal easement agreement is an effective measure in reducing costs, improving accessibility, increasing property value, and resolving conflicts.
Common Types of Real Estate Easements
Several types of easements can be involved in a reciprocal easement agreement. One common type of easement is an access easement. This type of easement allows a neighbor to cross your property to gain access to their own. For example, you might allow a neighbor to cross a corner of your 1,000-acre ranch to allow them access to their ranch, whether they have a landlocked property or not. Access easements can be very specific to a particular piece of your property, or they can be broad.
Another option is a utility easement. These easements allow a utility company to cross your property to provide your neighbor with power. For this reason, these types of easements tend to be very specific. A utility easement might stipulate the exact place where phone or power lines can cross your property very closely.
Finally, you might include a shared use agreement. In a shared use agreement, two or more properties will share a common facility or utility that crosses one or more properties.
Legal Issues to Consider and Tips for Drafting
A reciprocal easement agreement should be reviewed by an attorney knowledgeable in real estate law. An agreement with a neighboring property owner can have the same consequences as a deed to the property if it is improperly drafted and could severely limit your property rights. Obtaining counsel to review prior to entering one of these agreements is vital. An attorney should be sought if a reciprocal easement agreement was entered into by a prior owner of the property and/or the property was subdivided after the agreement was entered into. The restrictions may be on a larger or small parcel of land than owned by the current owner or the rights may have been assigned to the landlocked property.
Importance of Legally Enforceable Recorded Easements
One of the primary ways to protect yourself if you are a property owner with an easement whose neighbor has done something to block your access to the easement is to record the easement. Properly recording the easement puts a public record into the county file system that puts others on notice of your rights. A third party reviewing the property records will know that the owner is limited in their rights because of the recorded easement without having to first conduct a search to see if one was recorded. If the easement is not legally recorded it may be ineffective against a subsequent purchaser of a property that falls within the scope of the easement or other third parties. Although the general rule in most states can be that a purchaser is on notice of all recorded information in the county registry, the recorded easement must be legally enforceable to be afforded this protection.
Title Insurance
When purchasing property, the purchaser will seek a title report from a title company . The title report sets forth any known defects in the title of the property being purchased. The purchaser can request the title company insure that the property is free of any known claims against the property. One way to do this is to have the title company insure that any easements do not grant easement rights over the purchased property (the benefit of an easement will only run with the property). Purchasers can also purchase title insurance that will protect them against problems with the property being purchased after the sale such as monster trees that were cut down by the neighbor before the purchaser had possession of the property.
The Future of Reciprocal Easement Agreements
Both developers and builders interested in creating a subdivision for a number of homes or a homeowner who has a home with a shared driveway should consider the possible long term impact of a reciprocal easement agreement. If the agreement restricts further development of an area, such as no outward construction or height restrictions, or designates areas where landscaping (such as tree planting) is prohibited, the agreement may help avoid future disputes and help ensure that the owners of the property will be able to continue to utilize the property as they had intended at some time in the future. For example, if you have a reciprocal easement that gives you access to a common parking area, without the proper wording, an adjoining property owner could negotiate with neighbors to change the configuration of the parking area to ensure that your property does not have access. These agreements should be signed by an attorney and put into writing when the property is sold to ensure that future owners of the property are bound.
Disputes in Reciprocal Easement Agreements
Disputes occasionally arise between parties subject to reciprocal easement agreements. One of the most common conflicts are disputes regarding failure to comply with obligations set out in the easement agreement, such as maintenance obligations. Another common conflict is the difficulty in coordinating the agreed upon use of an easement when one party wishes to alter the configuration of the property. Any noncompliance or inability to comply with the agreed use of the property can lead to disputes, as can claims of property damage as a result of expansions or alterations.
One manner of resolving disputes surrounding compliance and use conflicts is to informally mediate the dispute through the context of the business relationship between the parties. Often, there’s an incentive to retain the amicable relationship that an easement agreement provides: the landowners are often neighbors from whom the easement has been granted, and thus maintaining good relations is often vital to protecting the value of the property.
If those tactics fail or when the easement parties have had a falling out that eliminates the amicable resolution process, other dispute resolution processes may be necessary. The right of equitable access to easements remain paramount to these pieces of property, and therefore litigation over easements almost always involves injunctive relief, which requires the party seeking injunctive relief to establish that the other party has failed to comply with the agreement and to demonstrate how harm will result if the requested relief is not granted.
Reciprocal Easement Agreement Case Examples
To provide a greater understanding of when a reciprocal easement agreement may be appropriate, below are a few case studies of successful reciprocal easement agreements.
Windsor File Drive, LLC v. Mass Properties, Inc., 2012 WL 2923284 (D. Conn.) (Ruling on Motion for Summary Judgment) In this case a cross-complaint was filed against owner of property that adjoined an airport. The Defendants operated a parking facility on an adjoining lot used to accommodate travelers at the airport. Defendants sought summary judgment of the complaint, and the cross-defendants sought a ruling that the defendants’ right to park on the property pursuant to a reciprocal easement had expired. The court ruled that although the reciprocal easement was recorded, the easement expressly provided that the easement ran with the land. The right to park on the property was granted in exchange for a reciprocal easement in a lease that became part of the chain of title. The court held that this easement ran with the land and the Defendants had the right to continue to utilize the property after the expiration of the lease because it had been relieved of its obligation under the lease.
6385 S. Morgan Dr. LLC v. S Fyvie, Generational Inv. Corp. and Sarah B. Gibbons, 2020 U.S. Dist. LEXIS 196942 (U.S. District Court for the Northern District of Illinois) (Opinion and Order Granting Plaintiff’s Motion for Summary Judgment) The plaintiff was engaged in the business of developing and managing real estate. The plaintiff entered into a reciprocal easement agreement with a neighboring owner in 2007 that allowed the neighboring owner to use a portion of the property as a driveway and to block an alleyway . In exchange for this right to use the property additionally, the plaintiff obtained a nonexclusive easement over additional property owned by the neighboring owner. The neighboring owners then conveyed an easement running with the land that included the right for the plaintiff to use the driveway and an easement over the adjoining alley. The court held that the plaintiff had a 30-year easement running with the land, terminating on January 26, 2037, because the easement was expressly given in exchange for an easement.
Sullivan v. Rockwood, 978 N.E.2d 655 (Mass. 2012) (Summary Judgment and Appeal) The defendants owned a portion of land subject to an express easement for the benefit of an adjoining parcel that was merged into the defendants’ land. Upon acquiring the property, the defendants filled a private road which accessed the easement, in order to preclude access to the property with the easement. The court held that the plaintiff’s easement could not be extinguished as a matter of law and the plaintiff had a right to legal redress in order to have his easement restored. Further, the court found that it was a violation of city ordinances for the defendants to fill the road or to interfere with the easement.
Katz v. BTX Sources, Inc., 94 A.D.3d. 556 (N.Y. App. Div. 2012) (Appeal) The plaintiff brought an action to enforce an easement over the defendants’ land for a parking covenant. The plaintiff purchased a portion of land that came with an easement over another parcel of land. The court ruled that the easement was enforceable, despite the fact that it would limit the defendants’ ability to use the land because the easement perpetuated the general scheme for development of the area by reserving a right that was a necessary and proper incident of development of the patented portion of land.