An often overlooked but very important consideration in commercial real estate transactions is whether a property for sale either benefits from an easement or is burdened by an easement. In West Virginia (WV), an easement may give permission for utilities to run underground, give rights for mineral extraction, or more. Understanding the implications of WV easements and rights of way is essential to a successful commercial real estate transaction.
How WV Easements May impact WV Commercial Real Estate
As the saying goes, a buyer of commercial real property must consider “location, location, location.” Parties to the transaction should also consider “easements, easements, easements.” While the location of a remote, wooded parcel might seem ideal for the tranquil spa business a new owner plans to build, future customers might not feel so relaxed upon hearing the constant rumble of logging trucks as they cross over a corner of the property each day pursuant to an easement. Understanding the implications of WV easements and rights of way is essential to a successful commercial real estate transaction.
Private easements affect a property in a variety of ways—including granting a right of way over or through adjacent lots or allowing neighboring properties to place overhead lines or build underground pipes to tie into the local utility infrastructure.
Public easements benefit the community as a whole and are often negotiated with utility companies. These include granting companies the right to place overhead electric and telecommunication lines or underground pipes for water, sewer, and electric and cable wires.
Understanding Easements and Rights of Way: Basic Terms
To understand easements, you first need to have a handle on the terminology. Following are some basic terms to be aware of with respect to easements in commercial real estate:
- Easement—A nonpossessory right that a person has to use another person’s property for a specific purpose
- Right of way—A type of easement that grants the holder the right to pass over another person’s property
- Dominant estate—The land benefitting from an easement
- Servient estate—The land burdened by an easement
- Appurtenant—An easement that runs with the land, regardless of who owns either the dominant or servient estate
In gross—An easement that is not attached to the land but is rather attached to a person and usually ends with that person’s death
Types of WV Easements
Generally, an easement can be express or implied. An express easement is one that was established in writing—either by granting or reserving rights.
An implied easement does not have to be in writing but rather is formed by use of the servient property. In WV, there are two forms of implied easements: one implied by necessity (also known as a “way of necessity”), and a second implied by a prior use of the land (also called a “quasi-easement”).
Another type of easement that does not have to be in writing is an easement by estoppel. The doctrine of equitable estoppel aims to prevent injustice and fraud.
Proof of an Easement in WV Commercial Real Estate
Conflicts over commercial real estate easements can result in litigation, and the burden of proving that an easement exists rests on the party claiming the benefit of the easement.
An express easement requires proof of a form of writing— for example, a deed—with the easement described in specific terms. Other requirements to prove an easement via deed include signatures, a certificate of acknowledgement, and a record of the deed in the county where the property is located.
Implied easements are not evidenced by a writing. An implied easement by necessity (also called a way of necessity) requires proof of both prior common ownership of the dominant and servient estates and later severance of those estates, at which time the easement was necessary. In addition, proof of a way of necessity also requires that the necessity continues to exist. However, a prior use easement requires proof that the right of way had been so long continued and so obvious as to show that the parties intended for it to be permanent.
An easement by estoppel exists when a party believes that to be the case. For example, a landowner may allow another to build on the landowner’s property believing an easement to do so already exists. In another example, a landowner tells a purchaser that an easement exists when it does not. In either case, there must be a concealment of material facts that known to the person who benefitted from the concealment and who concealed facts with the expectation that the other party would act upon the concealment. It also requires that the concealment was unknown to the injured party, who then relied upon the concealment to his or her detriment.
How a WV Commercial Real Estate Attorney Helps Navigate Easement and Right of Way Issues
The consequences of purchasing or selling commercial real estate with easements depends on the type of easement and whether the easement has been clearly established. Property burdened by an easement can affect your intended use of the real estate, as in the spa example mentioned earlier. On the other hand, property with an easement over another parcel likely benefits from that easement—but only if the easement is not subject to dispute by the servient estate. Knowing the existence of easements and how easements affect commercial real estate is critical to determining the value of a transaction.
Anyone entering into commercial real estate transactions benefits from the assistance of an experienced WV commercial real estate attorney. Pre-existing easements affect a property’s value and utility. They can also affect whether a mortgage lender wants to finance a particular commercial property. A commercial real estate attorney can help you determine if the property you want to purchase includes an easement and how that easement affects your intended use, financing, and other factors.
Allison J. Farrell is a WV commercial real estate attorney at Jenkins Fenstermaker, PLLC. From the firm’s Clarksburg office, she helps clients across the state identify and evaluate the benefit—or burden—of WV easements and rights of way. For a consultation to learn more about she can help you, call (304) 521-6120 or complete the firm’s online contact form.