Law of Easements CLE

  1. Basics of Easement Law
  2. Characteristics

An easement is a real property right entitling the owner of the easement (the dominant estate holder) to use real property that is owned by another (the servient estate holder) on a non-exclusive basis.

  1. Distinguishing easements from other rights

Although easements share commonalities with certain other real property rights such as leases, licenses, management agreements and fee ownership, easements are nonetheless distinguished from each of those rights.

  1. leases

The fundamental difference between a lease and an easement is exclusivity of possession. Subject to the terms of the lease, a tenant under a lease is entitled to exclusive possession of the property being leased to it. Easements are often overlooked as viable alternatives to either leases or licenses. However, virtually all of the attributes desired in a lease may also be achieved in an easement agreement, and an easement agreement may be a preferred choice where the “tenant” desires a real property interest (which will enjoy additional protection in the event of a “landlord” bankruptcy) and the “landlord” wishes to preserve access to the “premises” on a non-exclusive basis with the “tenant” or another occupant of the “landlord’s”. Such a situation may arise if an occupant contemplates making a substantial financial investment in improving the space that is to be occupied but the property owner still needs to retain significant access to the occupied space. For example, an easement may be the appropriate document in the following cases, provided the applicable occupant is required to make a substantial capital investment of its own funds in non-removable improvements within the applicable space: a cell phone tower operator for a tower that constructed upon a structure that is owned by the property owner, for a substantial kiosk occupant in a shopping center, for a substantial concession stand in a store or shopping center, or for the portions of a nightclub or lounge area that spill over onto the property owner’s property.

  1. licenses

The fundamental difference between a license and an easement is that a license is not a real property right at all. A license merely permits an occupant to be present upon the property of another within the licensed area without being deemed a trespasser. A licensee, however, is not entitled to be put into possession of the property being licensed as a remedy if the licensor elects to exclude the licensee from possession. At common law, a licensee’s only remedy for such a breach by the licensor is a claim for damages.

However, there is a modern trend among courts of allowing specific performance as a remedy for such a breach, thus vitiating the primary difference between a lease and a license. Nevada law is not settled on this point. However, the distinction between licenses and leases is less important in Nevada than in some other jurisdictions, as the scant case law that exists in this area indicates a strong preference for classifying purported licenses as leases. See, e.g., Sportsco Enterprises v. Morris, 112 Nev. 625 (1996). As a result, a license must be carefully drafted in order to qualify as a license, and, even with careful drafting, will be subject to re-characterization by a Nevada court. The best practice when a license is desired is to expressly address the remedy issue and provide for a waiver by the tenant/licensee of the right to injunctive or other relief that would have the effect of putting the tenant/licensee back into possession of the premises following an exclusion from the premises by the landlord/licensor.

Because a license is not a real property interest, there is a greater likelihood that the license may be discharged in bankruptcy. Accordingly, a licensee who contemplates a substantial investment in the licensed space may find the risk of losing the right to occupy that space to be unacceptable and may, therefore, insist on a lease or easement agreement in lieu of a license.

  1. management agreements

Management agreements are essentially very complicated licenses. They convey no real property interest and no right to possession, exclusive or otherwise. However, they do typically entitle the manager (which is the analog of a tenant under a lease) to operate certain services or operations within a defined area and, in consideration for such operation, provide for a share of the resulting revenues. As with a license, a manager’s remedy for a breach of the management agreement is a claim against the owner for damages and not a right to recover possession of the managed area. Where terms beyond those that would typically be set forth in an easement are desired, a management agreement may be paired with an easement to complete a deal in which the complexities of a management agreement or lease are desired, while preserving both a more-bankruptcy-protected real property right for the manager and the owner’s right to joint possession of the subject property. Under such a structure, it is important to consider whether the easement is onerousenough to convince a bankruptcy court that no other person could operate the affected property in place of the manager (such as by inclusion of a covenant in the easement that prohibits any other operator within the easement area), otherwise the preservation of the easement rights in a bankruptcy may be of little value.

  1. fee ownership

Fee ownership entitles the land owner to possess, use and enjoy his or her land as he or she sees fit, subject to matters affecting title and applicable laws. There is no general real property limitation on the scope of the uses to which an owner may put his or her property.

  1. Types of easements.

Some attributes of an easement may vary depending on the categorization of an easement. Easements may either be appurtenant or in gross, they may be positive or negative in character, they may be public or private or they may fall into certain other special categories, such as profits a prendre, conservation easements and solar energy easements.

  1. easements appurtenant or in gross

Easements may either be appurtenant to other land or may be in gross. An easement is appurtenant to other land if it benefits such other land or the use of such land. An easement is in gross if it benefits a particular individual or group of individuals generally and not any particular land owned by such individuals.

Most practitioners are familiar with appurtenant easements. An example of an appurtenant easement would be an easement under which an adjacent owner is given the right to use a road for access to the adjacent owner’s property that happens to cross the landowner’s property. An example of an easement in gross would be an easement granted to a favorite nephew to hunt on the landowner’s property.

Easements appurtenant and in gross differ principally in how they are transferred. An appurtenant easement may be transferred only pursuant to a transfer of the land that benefits from the easement (the “dominant estate”). A transfer of the dominant estate will automatically transfer all easements appurtenant to such estate, even if no specific mention of the easement is made in the deed. An appurtenant easement may not be severed from the dominant estate and, thus, may not be transferred apart from a conveyance of the dominant estate. By contrast, easements in gross were, under common law principles, non-transferable rights that were personal to the holder of such rights. Thus, in the example cited above, under common law principles, the nephew would not be permitted to convey his easement to hunt on his uncle’s property to anyone else, unless the nephew were, say, a furrier or otherwise hunted for commercial purposes.

It is unclear whether a Nevada court would consider an easement in gross to be transferable. Other jurisdictions that have considered the issue have reached differing conclusions. However, under the Restatement, which likely represents the majority rule, a non-commercial easement in gross’s alienability should be “determined by the manner or the terms of their creation”. Rest. Property, §§ 491-492. Thus, the critical inquiry is as to the intention of the parties at the time of the grant. Powell takes this a step further and urges that all non-commercial easements in gross be deemed to be transferable, “except those demonstrably intended to benefit only the individual who is the first recipient”. 4 Powell on Real Property, § 34.16.

  1. negative easements

Positive easements permit one person to enter onto or do things on the property of another. By contrast, negative easements entitle the holder of the easement to prevent another person from doing something on that person’s own property, but do not permit the holder to enter onto or use such property. Common types of negative easements include easements for light, air and view. Negative easements may be created only by an express grant in Nevada. SeeProbasco v. City of Reno, 85 Nev. 563, 565 (1969) (“Nevada has expressly repudiated the doctrine of implied negativeeasement of light, air and view . . .”). According to the Restatement (Third) Servitudes, § 1.2, cmt. (b), negative easements are “indistinguishable from [] restrictive covenants” and are, thus, subject to the same rules that govern restrictive covenants.

  1. public vs private easements

Most of the easements discussed above are private easements that benefit a particular person or land owner. However, through a dedication, an easement may also be granted to the public generally. The creation of such public easements generally requires both an offer of dedication and an acceptance of that offer. An offer of dedication may be in the recording of a plat, by opening the applicable area to the public, by following formal, statutory dedication requirements, or by other conduct that indicates an intention to dedicate. An offer of dedication may be accepted either under statutory procedures, expressly by a public authority, under common law estoppel principlesor by use of the dedicated easement by the public for a period that is long enough to indicate an intent to accept. 14 Powell on Real Property, § 84.01[6][b].

The Nevada Supreme Court has further elaborated on the dedication process: “A dedication is a gift of land by the owner for an appropriatepublic use, such as a street. Dedications may beclassified as either statutory or common law. Astatutory dedication operates by way of grant, vesting in themunicipality the fee for public use. Under a common-lawdedication, however, the fee of land dedicated for a streetremains in the owner, subject to a public easement in the land,which is vested in the municipality. A common-lawdedication rests upon the doctrine of estoppel in pais, whichextends an owner-permitted use of private property to protect thepublic's expectation of continued use. The recording ofa plat may qualify as a statutory dedication, or at leastevidence of an intent to make a common-law dedication. Finally, the party asserting a dedication bears the burden of proof.” Carson City v. CapitalCity Entertainment, 118 Nev. 415 (2002) (citations and note omitted).

Formal acceptance of a dedication is not required when, among other circumstances, the dedication would impose no burden on the applicable jurisdiction. Thus, the accepting jurisdiction will be presumed to accept the dedication of a plaza or other open space. McKernon v. City of Reno, 76 Nev. 452, 460 (1960). By contrast, the dedication of a way involves substantial cost in improvements, repairs, and maintenance, and, as such, would not be presumed accepted.

  1. conservation and solar energy easements

NRS 111.370-380and 111.390-440 provide for easements for solar energyand conservation, respectively. The texts of those statutes are included in Exhibit A to this paper.

  1. profits a prendre

A profit a prendre is a right to go upon the land of another and extract products of the soil, including minerals, timber and gravel. No significant distinctions exist between the rules governing profits and those governing easements. Rest. Property § 450, “Special Note”. However, there is one practical distinction—although courts will generally imply easements to get to the “profit” that is to be extracted under a profit a pendre, it is better practice to describe the actual route in the grant or reservation itself.

  1. How easements are created

Easements may be created expressly (by grant or reservation), by implication, by prescription or by estoppel.

  1. implication

Easements may be granted or reserved by implication. An easement may be implied by existing use, plat, necessity, or grant of another real property interest.

  1. existing use

“[T]he three essential characteristics of an easement by implication [from existing use are]:

(1) unity of title and subsequent separation by grant of the

dominant tenement;

(2) apparent and continuous use; and

(3) the easement must be necessary to the proper or reasonable enjoymentof the dominant tenement.”

Jackson v. Nash, 109 Nev. 1202, 1213-14, 866 P.2d 262 (1993) (internal citations and quotation marks omitted). Further elaborating on the second requirement listed above, the court stated “at the time that the common owner severed the two parcels, the owner must have been using one parcel so as to benefit the other in an apparent and continuous manner . . . [such that] a purchaser could reasonably have expected, without further inquiry, that these benefits were included in the sale.” Id.

The scope of an easement by implication is defined by the “reasonable expectations” of the purchaser (and not necessarily by the actual expectations or intentions of either party). SeeBoyd v. McDonald, 81 Nev. 642, 652n.12 (1965). Specifically “to be considered [in ascertaining the reasonable expectations of the purchaser] are the purchase price, relations betweenbuyer and the seller now severing his heretofore uniformparcel, conduct of persons in similar positions, andoccurrences which would put a reasonable man purchasing propertyon notice at least to inquire further as to the extent of hispurchase”. Id. at 649 (citations omitted).

As with a prescriptive easement, an interruption in the continuous use of the path (sometimes called a “quasi-easement” while all property is still owned by the common owner) will defeat a claim of easement by implication. Thus, “[t]heconstruction of afence or otherwise blocking the roads may be considered asevidence of the interruption of apparent and continuous use." Alrich v. Bailey, 97 Nev. 342, 344 (1981).

  1. necessity

The principal difference between the elements of easementsby implication by use and by necessity is that no prior use of the easement is required in an easement implied by necessity. Thus, “questionsaddressing prior apparent and continuous use, which are quitesignificant in connection with easements by implication, are notapplicable to easements by way of necessity. A way of necessityarises from the application of the presumption that whenever aparty conveys property, he conveys whatever is necessary for thebeneficial use of that property and retains whatever is necessaryfor the beneficial use of land he still possesses.” Jackson v. Nash, 109 Nev. 1202, 1209 (1993). Therefore, an implied easement by necessity will generally be found to exist if two requirements are met: “(1) prior common ownership, and (2) reasonable necessity.” Jackson v. Nash, 109 Nev. 1202, 1211, 866 P.2d 262 (1993). “The necessity must pertain to the use and enjoyment of land adjacent to the servient estate. . . . While a showing of reasonable necessity does not require that the passageway be the only one available, something significantly greater than inconvenience to the party claiming the easement must be shown. Although substantial inconvenience is a factor, it must be weighed against the burden and possible damage that could result from imposing an easement across another's property. . . . Present necessity, as well as necessity at the time of severance, must also be shown.” Id. In addition, even a showing of necessity may be overcome by “uncontradicted evidence that indicates a contraryintent. An easement by necessity will not be imposed contrary tothe actual intent of the original grantor and original grantee.” Jackson, 109 Nev. at 1212.

In Breliant v. Preferred Equities Corp., 112 Nev. 663 (1996), the court strongly implied that the requisite necessity might arise by virtue of local zoning (or, presumably, other) laws. Thus, in that case, the necessity would apparently have been shown because the parking spaces within the claimed easement area were needed for the dominant estate to comply with local zoning ordinances for the (non-conforming) use of the building. Id. at 673. (This conclusion was not ultimately necessary to the court’s decision as the court found that an express easement provided the dominant property owner with sufficient parking to meet zoning requirements for the existing use of the dominant property.)

  1. plat

When property is conveyed by reference to a plat, easements are implied in the streets, parks and other common areas shown on the plat. 4 Powell on Real Property, § 34.06.

  1. grant of profit a prendre or other real property interest

Easements may benefit any real property interest, not just fee interests. Thus, easements may be implied to provide access to the minerals granted under a profit or may be implied to provide access over shopping center common areas to shopping center premises, even if not specifically mentioned in the profit or lease. Whether such an easement is to be implied will be by virtue of one of the methods of implication previously discussed.

  1. grant or reservation

An easement may be created expressly, either by a grant from the servient property owner or by a reservation in a deed from the dominant property owner. The formalities required and practical considerations that should be taken into account in drafting an express easement are discussed more fully below.

  1. prescription

“In Nevada, adverse, continuous, open and peaceable use for a five-year period are the requisite elements for claiming an easement by prescription. Stix v. La Rue, 78 Nev. 9, 11, 368 P.2d 167, 168 (1962). Exclusivity is not a requisite element. Id. at 14, 368 P.2d at 169. Adverse use is established by asserting a right to use the land. Michelsen v. Harvey, 107 Nev. 859, 863,822 P.2d 660, 663 (1991). The standard of proof in establishing an easement by prescription is clear and convincing evidence. Wilfon v. Hampel 1985 Trust, 105 Nev. 607, 608, 781 P.2d 769, 770 (1989).” Jordan v. Bailey, 113 Nev. 1038, 944 P.2d 828 (1997). Prescriptive rights may be acquired by one or more individuals or the public as a whole. SeeGroso v. LyonCounty, 100 Nev. 522, 523-4 (1984).

Adverse Use. Different presumptions as to adverse use arise in cases in which improvements are constructed within the easement area, depending on who constructs the improvements. Thus, an adverse use may be inferred “wherea prescriptive easement claimantcreates or establishes a roadway on another's property”. Wilfon, 105 Nev. at 609. By contrast, “[w]here a road is established by the [record owner] landowner, there arises a presumption that its use by others is with the permission of the landowner.” Id. at 610. That presumption cannot be rebutted by mere “[m]aintenance and improvementof a portion of the way” by the easement claimant. Jackson v. Hicks, 95 Nev. 826, 829 (1979). However, “no presumption of permissiveness will arisewhere the road was for many years the only means of ingress toand egress from the dominant estate and was not established bythe owner of the servient estate for his own use.” Richardson v. Brennan, 92 Nev. 236, 240 (1976)(driveway was apparently constructed by lessees of the federal government prior to conveyance by the government to the servient owner’s predecessor in interest).