What Is an Easement?

An easement, or easement agreement, is a real estate concept that defines a scenario in which one party uses the property of another party, where a fee is paid to the owner of the property in return for the right of easement. Easements are often purchased by public utility companies for the right to erect telephone poles or run pipes either above or beneath private property. However, while fees are paid to the property owner, easements can negatively affect property values in that unsightly power lines, for example, can lower the visual appeal of a piece of land.

Key Takeaways

  • An easement is an agreement between two parties, where one is granted land access in exchange for a fee.
  • The most common types of easements are utility easements. An example would be a telephone or power company running lines through a property for which they've been granted an easement.
  • Another easement seen often is an easement of necessity. This usually occurs when a person needs to use another person's property in order to gain access to their own.

How an Easement Works

Used to describe a high-level agreement between the owner of a property and another party—either a person or an organization—a typical easement agreement outlines a form of payment by the petitioner to the owner for the right to utilize the subject of easement for a specific purpose.

Since an easement is unique to the agreement between the two parties involved, easement agreements are structured in such a way that the specific use of the property is explicitly outlined and that there is a termination of easement given to the property owner. Such agreements are sometimes transferred in a property sale, so it's important for potential buyers to know if there are any easements on the property being evaluated.

Real-World Examples of an Easement

There are three common types of easement agreements. Which type of easement is granted will depend on the goals of the individual parties.

The first is a utility easement. This type of easement is an agreement between a property owner and a utility company that allows the utility company to run power lines, water piping or other types of utilities through a property. Utility easement agreements are often included in a property's deed or held by a city or municipality.

The second type of common easement is a private easement agreement between two private parties. This easement is fairly standard in that it gives one party the right to use a piece of property for personal needs. A farmer may need access to a pond or additional agricultural land, for example, and a private easement agreement between his neighbor and himself gives him access to these needs. Further, if piping or a similar utility is required to be run through a neighboring property for a person's well system, the agreement is handled through a private easement.

Finally, there is a third common easement agreement referred to as an easement by necessity. This type of easement is more liberal in that it does not require a written agreement and is enforceable by local laws. An easement by necessity arises when one party is required to use another person's property. For example, when a person is required to use a neighbor's driveway to access his home, it's considered an easement by necessity.