What Is an Easement? What New Jersey Property Owners Need to Know Before Closing

For New Jersey homeowners – both experienced ones and those who are just signing their names at the closing table for the first or second time – the real estate transaction process can be a dizzying one. Adding to the complexity of the process? The fact that a property can carry rights and restrictions that do not show up on an average walkthrough – adding more headaches and questions to the purchase.

This situation is called an easement, and easements can throw a wrench into your carefully crafted real estate purchase process. In fact, here in New Jersey, we have recent, real-life proof of the issues that an easement on a property can raise (more on that later).

Here, we’ll take you through what you need to know about easements in New Jersey, and how the right title insurance policy can provide the safety and security your purchase demands.

What is an Easement?

Here’s a simple definition of an easement for New Jersey real estate purposes: it’s the legal right for someone else to use a specific part of your property for a specific purpose without owning it. That “someone else” may be a person (a neighbor, for example), a company (one housed in a neighboring building, for example), or even a government agency.

Easements are relatively common within New Jersey, a state with a particularly dense housing environment, homes and properties running right up against trails, parks, and other natural elements, and a wide variety of other factors.

In the next section, we’ll detail the common types of easements you may find in New Jersey properties; there’s a good chance you’ll encounter one during your real estate transaction.

Common Types of Easements on New Jersey Properties

Here are some of the most common types of easements within New Jersey real estate properties:

• A Utility Easement is one of the most common types of easements. These easements often keep the water flowing or the lights on (quite literally). It allows utility companies to construct or maintain pipes, wires, sewer lines, and other infrastructure on your property. More often than not, you won’t have the permission to block, build upon, or interfere with their work on your property as part of the easement.
• Right-of-way or access easements are also quite popular and straightforward: they simply mean that a person, company, or other party has the right to cross your property to reach another location. Beachfront or mountainside property is a good example of this; there may be a right-of-way easement allowing someone else to use a path to reach a beach or another destination.
• Shared driveway or party wall easements describe property that neighbors may share for use by both parties. They’re fairly self-explanatory: driveways that may be used by both neighbors, or walls and fences on property lines, fall into these categories.
• Prescriptive easements fall into the “unwritten, use-based” category. These sorts of easements must be proved in court and must last for a significant period (ranging from years to decades). The use must have been open and continuous over that period; after that time, any attempt by the owner to stop use of the property may be deemed a violation of a prescriptive easement by the courts. For example, if one person spent a decade or more openly using a path through a property to reach a beach, and then the property owner erected a fence or wall to block that path, a court could rule that the prescriptive easement was violated.

Note that there are differences between recorded and informal easements. Recorded easements are detailed in an official document; informal easements are “handshake” agreements for easements between parties.

Real Case Example – When a Recorded Easement Didn’t Hold Up

There’s a recent case from right here in New Jersey that highlights some of the complexities of easements. In PC Clark Property LLC v. Halstead Realty, LLC (summarized in this Appellate Lawyers article), a New Jersey court ruled that an easement was abandoned by one party’s actions on the property over a span of three decades. As a result, the newer property owners in the lawsuit ended up losing out on any easement rights they had – even though the easement had been duly recorded. The main takeaway here? Recorded easements are not always guaranteed, especially over a long period of time. Owners need to have a complete understanding of their property’s history before finalizing any transaction.

How Easements Are Uncovered During a Title Search

A trusted, local title agency is the team to turn to for easement questions during the real estate transaction process. A title agency like Cortes & Hay will seek out any easements during the extensive title search process; it will perform an in-depth examination of records and other data, flagging where property use may not match what is detailed on paper. The title company will detail their findings in a document for your review.

What Title Insurance Does (and Doesn’t) Cover on Easements

It’s important to know this about standard title insurance policies: when it comes to easements, these policies typically exclude any easements that are visible, recorded, or detailed in the Schedule B section of your title insurance policy. For easements, title insurance is mainly helpful for those undisclosed or unrecorded easements that might arise.

If you’re looking for protection that goes above and beyond standard title insurance coverage – and protection that provides additional coverage against issues that may come up with easements on your property – enhanced title insurance might be right for your property. Talk with your title insurance agent about the coverage enhanced title insurance may provide.

What NJ Buyers Should Do Before Closing

Concerned about easements and other title issues? Here’s what you should do before the final close on your property:

• Request the full title commitment. After you get this, read the full “Schedule B” section of the title commitment. This will show you all the details that will be completed before the mortgage is issued, along with everything title insurance does not cover; any easements not covered will be detailed in this list.
• Get a current survey. A full survey will identify any further boundary or easement issues that may require your attention in the future.
• Ask questions. Have something on your property you’re unsure about – like shared fences, driveways, or utility lines? Ask the sellers, neighbors, and other people involved in the transaction for answers sooner rather than later to avoid any problems down the line.

Protect Your Property Rights With Cortes & Hay

Easements – and other title issues – may throw up unwanted roadblocks and add more headaches to your real estate transaction. An experienced and local title insurance agency – like Cortes & Hay – can serve as a valuable guide through this process, providing you with the knowledge and security you need to ensure a successful close on your property.

Ready to get started with title insurance for your New Jersey property? The veteran professionals at Cortes & Hay are available to guide you through every step of the title insurance process, including how easements might impact your transaction.

Contact us now at (908) 782-8850 to get started.

Frequently Asked Questions