Easements can have a major impact on a commercial property purchase because they may give another party the right to use part of the property. For buyers, investors, developers, attorneys, title companies, engineering firms, lenders, and business owners, easement review is an important part of commercial title search due diligence before closing, financing, or development planning.
How do easements affect the purchase of a commercial property?
Easements affect the purchase of a commercial property by limiting, shaping, or protecting how land can be used. Cornell Law School defines an easement as a nonpossessory property interest that gives the easement holder permission to use another person’s land. (Legal Information Institute)
In a commercial transaction, that can matter because the buyer may own the property but still be subject to another party’s recorded rights. For example, a utility company may have rights to maintain lines across the site. A neighboring parcel may have access rights over a driveway. A recorded agreement may affect parking, drainage, signage, or ingress and egress.
Easements do not always make a property unusable. Many are routine and expected. The issue is whether the recorded easement conflicts with the buyer’s intended commercial use, financing requirements, development plans, or closing timeline.
This is why easement review should be part of commercial property title search due diligence and commercial property easement and encumbrance search.
What types of easements should commercial buyers look for?
Commercial buyers should look for any easement that affects access, utilities, development, operations, parking, site layout, or future resale. Cornell explains that an affirmative easement gives the holder the right to do something on another person’s land, such as travel on a road through that land. (Legal Information Institute)
Common commercial property easements may include:
- Access easements for driveways, roads, or shared entrances
- Utility easements for electric, gas, water, sewer, telecom, or drainage lines
- Right-of-way easements for passage or infrastructure
- Parking or shared-use easements
- Drainage and stormwater easements
- Pipeline, cell tower, or telecommunications easements
- Easements affecting signage, visibility, or site improvements
Some easements benefit the property being purchased. Others burden it. The key is understanding the exact recorded language, the location of the easement, and whether it affects the buyer’s intended use.
Recorded property documents are commonly maintained through public recording offices. For example, a Register of Deeds office may record land titles, liens, and other documents related to property transactions and make recorded documents available for public review. (Spartanburg County)
Can easements limit development, parking, access, or property use?
Yes. Easements can limit development, parking, access, or property use when the recorded rights interfere with how the buyer plans to use the site. Investopedia notes that encumbrances can lessen the value, use, or enjoyment of property, and examples include liens, easements, and restrictive covenants. (Investopedia)
For commercial buyers and developers, easements affecting commercial property use may create questions such as:
- Can a building be placed where planned?
- Is there legal access to a public road?
- Can the buyer expand parking or loading areas?
- Are utility corridors protected from construction?
- Does another party have the right to cross the property?
- Will the easement affect lender, title company, or site-plan review?
Access is especially important. A commercial property may be difficult to lease, finance, develop, or operate if access rights are unclear. A site visit may show a driveway, but the title record may need to confirm whether the driveway rights are recorded, transferable, and adequate for the intended use.
For a related topic, see access issues in commercial real estate transactions.
Who reviews easements before a commercial real estate closing?
Easements before a commercial real estate closing may be reviewed by the buyer, attorney, title company, lender, surveyor, engineer, developer, or other transaction professional. A commercial easement review often requires both record research and practical file organization so the right professionals can understand what the easement says and why it matters.
Tri-State Paralegal Service provides title search services for law firms, title companies, engineering firms, commercial clients, and selected buyer-side matters involving public records research tied to real property. Its work includes chain of title research, title due diligence, ownership review, and specialized title search matters across Pennsylvania and West Virginia. (Tri-State Paralegal Service)
Tri-State’s commercial title search services may include review of ownership history, deed records, liens, judgments, easements, access issues, encumbrances, and other recorded matters tied to commercial property. (Tri-State Paralegal Service)
A title search can organize the record, but legal advice should come from a licensed attorney. Tri-State’s commercial title search page also notes that it provides document and public records support and that legal advice should come from a licensed attorney. (Tri-State Paralegal Service)
Request Easement Search Support
Do not wait until closing to find out that an easement affects access, parking, utilities, development, or the intended use of a commercial property. Tri-State Paralegal Service helps commercial buyers, investors, developers, attorneys, title companies, engineering firms, lenders, and business owners organize easement and title research before the next step.
To request support, visit title search services or commercial title search services and share the property location, county, state, deadline, and the type of easement or access concern you need reviewed.
