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Utility Easements, Explained

Sarah Sharkey3-minute read

December 07, 2020

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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.

Let’s take a closer look at what a utility easement is and how it can affect your property.

What Is A Utility Easement?

Utility easements are designated parcels of land that give 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.

There are other types of easements, such as private easements, easements by necessity, and prescriptive easements. But utility easements are fairly common.

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.

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What Does It Mean To Have A Utility Easement 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, 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, take 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. I calling the 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 are 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 vs. Frank Shi, a Supreme Court case in 2016, set a precedent to allow judges to determine whether or not 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

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 easements, consider any 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.

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Sarah Sharkey

Sarah Sharkey is a personal finance writer that enjoys helping readers learn more about their finances. She has an MS in Business Management from the University of Florida. You can connect with her on LinkedIn or Instagram @adventurousadulting.