Utility Easements, Explained
Sarah Sharkey3-minute read
April 20, 2023
As a potential homeowner, you may assume that you have unencumbered access to the property you intend to buy. However, the property deed may come with a utility easement.
In that case, another party would have access to your property without your permission to make changes that you may or may not agree with. Utility easements are a fairly common issue that homeowners can face with their property lines.
Let’s take a closer look at what a utility easement is and how it can affect your property.
What Is A Utility Easement?
A utility easement is a designated parcel of land that gives utility companies the right to access private property for the good of the community. For example, a utility company may have the right to trim a tree in your backyard if it’s interfering with telephone lines.
A utility easement can be an inconvenience for a homeowner, but it does bring the benefits of modern civilization. Without these types of easements it could be difficult for utility companies to provide services to our modern lifestyles such as water, electricity and sewage.
Utility Easement Example
Say you own a decent amount of land, and a utility company needs to run utility poles or power lines on your property. The utility company will set up a utility easement with you instead of going through the process of buying the necessary land that’s needed.
Both parties will have to agree to the utility easement before the utility company starts their work. Usually, these types of easements last for a long period of time.
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Utility Easement Rights On Your Property
When you have a utility easement on your property, the utility company may have a range of legal rights. A few restrictions you might face include:
- Utility company access without your approval: You may want to know who will be working on your property and when, but the utility company may not have to provide that information.
- Restrictions on physical alterations: You may want to make an improvement to a certain section of your property, but the utility easement may prevent certain upgrades due to the utility lines, such as installing an in-ground swimming pool or erecting a fence.
- Vegetation restrictions: The utility company may require regular access to a particular area and constantly tear up your garden. Additionally, many utility easements limit the planting of major trees in a specified area.
If you’re considering purchasing a property with a utility easement, it’s a good idea to set aside some time to research your local laws and regulations. The exact requirements will vary based on your unique utility easement.
Unfortunately, the rules of utility easements can be somewhat hazy. Call your local utility company directly if you run into any questions.
Can I Receive Compensation For A Utility Easement?
When a utility easement is originally purchased, the current owner will often receive some form of compensation. However, future owners of the property will usually not receive compensation or payment of any kind.
If you’re approached about a utility easement on your property, consider contacting a lawyer for guidance. Depending on the situation, you may be able to negotiate the original agreement to secure a reasonable amount of compensation.
ABI-K Pty Limited v. Frank Shi, a Supreme Court case in 2016, set a precedent to allow judges to determine whether an individual property owner’s request is reasonable. If a judge deems that the proposed easement is appropriate to the area and economically rational, the easement can move forward against your protests. Of course, utility companies will often prefer to settle outside of court than drain their resources in a lengthy court battle. With that, you may be able to reach a settlement if you’re reasonable with your requests.
A legal expert can help you determine what the best course of action is for your unique situation.
The Bottom Line: Understand Utility Easements Before You Buy
If you’re considering a real estate purchase, make sure to ask about any utility easements before closing on the property. Although an easement will not mean that the property belongs to the utility company, it can place some restrictions on how you can use the property.
With any easement, consider the restrictions you may face before signing the deed. All utility easements are designed to allow the company to serve the community’s needs. As long as you have no intentions to interfere with a company’s ability to meet that goal, a utility easement shouldn’t stand between you and homeownership.
Consider the limitations an easement may place on your property before moving forward. Otherwise, you could find yourself in an uncomfortable situation in the future. For more information on different easements, learn about right of way easements and how they work.
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