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Easements, Covenants & Encroachment – Property Law Q&A

Easements

An easement is a right of one party to use property owned by someone else. For instance, an easement may allow another party to enter onto adjoining land or run services such as water and sewage mains, power and telephone lines, natural gas lines, drainage pipelines or cables and substations over the property.

Restrictive covenants

Restrictive covenants limit the way a property is used or developed. An example is when a building must be of a certain size, height or made of certain materials. The restrictive covenant may also determine where the property is located on the site. Normally, these restrictions are in place to protect and preserve the amenity and character of neighbourhoods.

Case study: Beware of hidden easements

In a case in Queensland, a purchaser was allowed to end a contract of sale and was entitled to a return of the deposit, and the cost of titles thrown away, because an easement was not made known at the time of the contract. The easement was included in the title deed but not disclosed in the contract.

In the section of the contract covering title encumbrances it had been marked ‘none known’ when the property actually included an easement for drainage purposes.

However, the easement had been covered by new landscaping done by the owners, including paving, gardens and a pergola attached to the house from a dividing wall. The owners were required to get Council approval for any structures built over the easement, and if the Council needed to carry out works on the easement, these improvements would have to be removed at the owner’s expense.

The findings from the court case showed that the vendor wasn’t fully disclosing all information on the contract and that the purchaser wasn’t getting what they were entitled to. This meant that contracts that claim there are no encumbrances, when easements do actually exist, are misleading representations made by vendors and real estate agents who have an obligation to ensure all registered easements are made known to the purchaser on contracts for sale.

Case study: Easement or encroachment?

Question: I have an easement on my waterfront property and the public is repeatedly cutting across the easement boundaries and walking over my garden bed to access the beach. What is the line between easements and encroachments?

Easements and encroachments often affect the ownership of land. People may have been crossing your property for years to gain access to the beach – long before you were the homeowner. Benefits and burdens run with the land – what you obtained when you acquired the property from the previous owner passes on to you. The easements and encroachments, whether they be benefits or burdens upon your property, which existed at the time that you acquired the land, continue while you own the land.

A right of way is a form of easement granted by the property owner, which gives the right to travel over your land and to have the reasonable use and enjoyment of your property to others, as long as it’s not inconsistent with your use and enjoyment of the land. In your case, ownership rights of the property are lessened by the easement, but the public at large benefits due to the additional freedom of movement.

An encroachment, however, is an unauthorised entry upon the property of another. Trespassing creating injury to a property by an unauthorised and direct breach of the boundaries enables a property owner to bring a lawsuit to recover damages for the intrusion. In your case, the damage incurred to the garden bed. The reverse is also true, when you trespass or encroach upon the land of another, you can be held responsible for damages. Look into this carefully and seek advice from a solicitor.

Whether you’re thinking of constructing a swimming pool in the backyard or contemplating the demolition of a fibro house on a large lot for a small unit development, the issues of easements and restrictive covenants are two areas to consider before putting the plan into actionIn fact, the existence of such easements and restrictive covenants may be the reason why the property has not yet been developed – so carefully considering their impact on the current use and potential development of a property will allow you to ascertain the property’s underlying value.Easements and restrictive covenants are created between property owners or public authorities. When registered on the title of the property, these agreements become binding on the property owner and any future owners.

There’ll be property that benefits from the easement or restrictive covenant, known as ‘lot benefited’ or ‘dominant tenement’, and property which is burdened, known as the ‘lot burdened’ or ‘servient tenement’. Some easements and restrictive covenants in favour of public authorities don’t have a ‘lot benefited’ but are simply in favour of the authority.

Adverse impact or added value?

The important thing to remember is not to be discouraged if your vision for a property is burdened by an easement or restrictive covenant. In some cases, there’s legislation enabling applications for removal of easements on the basis that it has been abandoned. In NSW for instance, the Register General may remove an easement on application if it has not been used for 20 years or was in favour of an authority and is of a class that can be removed from title. In Queensland there are rights to modify or extinguish easements in limited circumstances.

Buyers should bear in mind that these rights of removal and modification are limited. The application of other legislation may also make the easement or restrictive covenant ineffective.

Covenants and easements have caught many people by surprise and should be one of the major items looked at when selecting land.
The information in ‘Property Law’ should not be used as legal advice. In any property transaction, a careful review of the terms of easements and restrictive covenants should always be carried out, and legal advice sought.

This article has been republished with permission from Your Investment Property magazine. Try our Loan Repayment Calculator and find the best repayment strategy for you.

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