When you are new to buying commercial property, you need to stay on top of how you will make the right choice for your business or development. One aspect of commercial properties that you will need to review are a potential property’s easements. An easement is a legal agreement between two property owners for one to use the other’s property in a specific way.
A purchase agreement typically outlines easements for commercial properties. If any property you plan on buying has an easement, you need to understand the following:
- what type of easement it is
- how that easement benefits or hurts your potential commercial property or your business
- how the easement affects the value of the property
Types of easements
Generally, easements in commercial property purchases fall under one of these three types:
- an easement by necessity
- a utility easement
- a private easement
Easements by necessity include situations where one business property owner has a parking lot or driveway that a neighboring business accesses to reach a public road. A utility easement allows utility companies the ability to install sewers, electrical lines, telecommunication lines and more in certain areas of a property, for the good of the community.
A private easement is an easement area that one property owner sells to another. Again, the easement usually to gives one party access to a sewer line, driveway or road. In a commercial property situation, a commercial real estate attorney can help you understand if your property purchase includes a private easement.
Other considerations when it comes to easements
When considering buying a property with an easement, you also need to know how the agreement addresses the following:
- Who is responsible for the upkeep or costs related to the easement (is it you or the owner of a neighboring property?)
- What the conditions are to access or use the easement
- When the easement will agreement ends or if there’s any way to end the easement agreement
Your real estate agent and real estate attorney can advise you best on any property easement agreements. That way, you’ll better understand if a potential commercial property is the right choice for your commercial development or business.