We hire a title company to help better ensure that we purchase property free of encumbrances or burdens. This includes potential issues like a restricted covenant or easement. But what happens if the sale is done, and the buyer later finds out that there is an easement on the property that was not discovered by the title search before closing?
Can this really happen?
There are cases when an easement can become apparent after the buyer purchases the property. This can happen when a new property owner gets notice that a utility company is moving forward with construction of a wind turbine on their property per prior agreement with the previous landowner or when a developer uses an easement to drive through the property to build a new neighborhood and exponentially increase the use of that otherwise private road.
What can I do about it?
Regardless of the reason for the discovery of an unknown easement, the more important question is likely how a property owner can resolve the issue. There are a couple of options, including:
- Review the contract. An easement is basically a contract. Like any other contract there are terms. These could include an end date. Check to see if the easement is temporary and set to expire in the near future.
- Negotiate. It may be helpful to negotiate a resolution with the other party if the easement is not set to expire or otherwise results in significant decrease in property value.
- Consider a claim. If a resolution to the issue is not available there is potential for a legal claim against the title company for failing to find or disclose the issue.
A title company is supposed to find and address these issues prior to the closing. As such, it is feasible to hold the title company responsible through legal action if the unknown easement results in significant economic damages.
