22 November 2013

A Hypothetical Scenario

A builder has just purchased a parcel of land in Sunny Street Glendale with the intention of building multi-dwellings on the land. The land in question slopes down from Sunny street preventing any proposed development from being able to discharge stormwater to Sunny Street without a pump out system. The land is located within Glendale Local Council who will not permit a pump out system for multi dwellings, and advise the builder to obtain an easement to drain the stormwater. He lodges his DA with Council and obtains conditional consent, subject to obtaining an easement over a neighbouring property in order to drain stormwater.

The builder looks at the neighbouring properties and determines that the most convenient easement would pass through a property that shares a rear boundary. That property is located on Gloomy Street (the burdened land) and is owned by Morgan. The builder approaches Morgan who upon hearing about the easement, becomes angry and chases them off his land. Without the easement to drain stormwater to Gloomy Street, the builder does not have consent to develop the land. The builder is now involved in an easement dispute. What can he do? Does he have any easement rights?

Negotiation & Price
The builders are obligated to negotiate with Morgan. In this instance its best if the builder engages a solicitor to assist with the negotiation with Morgan and to ensure they are not overpaying. It is not uncommon for owners of burdened land such as Morgan to eventually agree to grant an easement only to become unreasonable about price. Often such owners will look at the price of land in the area or the rateable value as shown on the Council rates to come up with a value of the easement. Values based on those criteria are by definition incorrect as it assumes the land upon which the easement will reside will be sold to the other party which is not correct. An easement is a right of way granted to the benefited land and not a sale of land to the benefited land. This is often a difficult concept to get across to owners of burdened land.

The Experts
When there exists an easement dispute there are a few steps that need to be taken before a genuine offer can be made to the owner of the burdened land.

1. The first issue is to determine the best position of the proposed easement so that it provides the least interference, both today and moving forward, to the burdened land. This may require the expert services of a hydraulic engineer who will provide advice as to the location, size, and length of the easement.
2. Neither owners of land nor solicitors are qualified to determine the value of land so the next step is to obtain the services of a land valuer. The valuer will amongst other things look at the location of the proposed easement and the level of its intrusiveness, inspect the property, look at surrounding properties, local land values and recent sales in the area. At that point the valuer will determine the value of the easement using the diminution method. Once these steps take place, the party seeking the easement is better placed to make a reasonable and genuine offer to the owner of the burdened land.

The Other Party Still Refuses
With the guidance of a solicitor serious and genuine negotiating between the parties should take place. However if Morgan continues to be unreasonable the only option remaining for the builder is to seek an easement by court order.¹ However before the easement will be granted the builder must establish that a few conditions have been fulfilled including:

1. that the use of the benefited land is consistent with the public interest,
2. the owner of the burdened land is able to be adequately compensated, and
3. all reasonable efforts to obtain the easement have been made and are unsuccessful.

Mersal & Associates specialise in easement disputes. If you are being asked to grant or require an easement and are involved in a dispute, we can assist in ensuring you achieve the best outcome. Call us today to arrange an appointment.

¹ Conveyancing Act 1919 (NSW) s 88K.