Real Estate 101: Termination of Easements by the Doctrine of Merger

When a property owner holds an easement on neighboring property and later acquires title to that neighboring property, the easement automatically terminates by operation of law due to the merger of title. After all, a property owner cannot hold an easement on its own property.

Confusion can arise when the joined property is later separated again between two different owners. Does the easement that previously existed revive? Typically, the answer is ‘no.’

Once extinguished, the easement no longer exists and therefore there is nothing to revive.  At the time the property is re-divided, a new easement would need to be created. The ways that can happen are by express grant, reservation or implication.  While deeds typically containing general language in the transfer that recognizes all existing easements such “boilerplate” language in not sufficient to revive the old easement. The language of “…subject to all easements….” applies only to valid easements.

A new easement can mirror the location and other details of the old easement but merely referencing the prior easement is not sufficient to revive it. The reference must be accompanied by language that makes it clear that a new easement is being created.

It is possible that a court will determine that the creation of a new easement is implied or necessary due to the circumstances of the severance. However, an acquirer taking title to one half of the newly re-divided property should not rely on the possibility or probability that a court will agree with its desired interpretation.

On the flip side, under limited fact-specific situations, a court may not enforce the doctrine of merger if it finds evidence that the party in interest did not intend the merger to take place or it to enforce the merger would prejudice the rights of an innocent third party.

Parties should also understand that stating their intent to create a new easement in a purchase agreement is not sufficient to revive the prior easement. The appropriate granting language must be in the transfer deed.

Bottom line, if previously combined property is about to be separated between two parties and their intent is to revive the prior easement, the transfer deed separating the property back out must clearly state what the parties intend with respect to the old easement or risk losing in court later.

No comments :