Many people only encounter easements when they buy their first home. Even then, easements often fly by in one of the dozens of vaguely understood documents buyers sign to close the deal. And for some, that much information is enough.
But watch out. Easements often involve some of the most emotional legal disputes, costly settlements and complex legal questions out there.
What are they?
Put simply, easements are legal rights over someone else’s land. They allow a person, government or other entity to use for a certain purpose all or more often some portion of a property they do not own. For example, most homeowners take it for granted that water, sewer, gas or other lines may run to, from or through their property, but they belong to government entities or utilities.
Because easements are rights that non-owners have and can exercise, they “come with” the land when you buy or inherit it. Although homebuyers may sign papers acknowledging that they know about certain easements, other easements may never leave a paper trail. Like any right, some easements are granted in a contract while others come from unwritten, self-evident truths.
Controversy #1: Town asserts easement on billionaire’s land
A Silicon Valley billionaire bought a spectacular stretch of beachfront property about 30 miles south of San Francisco. He then tried to exclude the public from his private beach, he found much of the surrounding community believed it had a “prescriptive easement” to the beach.
This means some claimed the public had gradually established a right to use the beach as if it was publicly owned, and they had established this right just by regularly exercising it over many decades. Prescriptive easements are comparable to “squatter’s rights” (adverse possession). Such rights do not come with documents that a Silicon Valley billionaire can find even by searching the internet.
Controversy #2: Conservation tax breaks draw investors
Conservation easements have a long and honorable history. Landowners can give conservation groups or government agencies easements over parts of their land, granting them permanent rights to, for example, manage the land for bird migration, scenic beauty, forest conservation, water quality and more.
To encourage such landowners to sacrifice for the public good, they may get tax breaks based on the appraised value of the land, which can involve its potential future value.
Over the past few years, journalists, the Internal Revenue Service and others have focused attention on controversial “syndicated conservation easements.”
Syndicates create partnerships and then sell shares in these partnerships. They then buy land and, accusers say, appraise its value at wildly inflated potential future values. Each investor, critics claim, then enjoys tax breaks several times larger than their initial investment in the land.