Utility Easements, Explained

As a potential homeowner, you may assume that you will have absolute control over the use of 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 support our modern way of life such as water, electricity and sewage treatment.

Next, let’s take a look at an example of a utility easement.

Utility Easement Example

Say you own a decent amount of land, and a utility company needs to run utility poles or electrical lines on your property. The utility company will set up a utility easement with you instead of going through the process of buying the 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.

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.

The rules of utility easements can get confusing and vary depending on your unique situation. So if you’re considering purchasing a property with a utility easement, it’s a good idea to research your local laws and regulations. You can also call your local utility company if you run into any questions.

Can You Receive Compensation For A Utility Easement?

When a utility easement is originally purchased, the current owner will often receive some form of compensation. A homeowner might also receive compensation for a utility easement if their property is seized or condemned through eminent domain. However, future owners of the property will usually not receive compensation or payment of any kind.

If you’re approached about the possibility of adding 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.

Protesting A Utility Easement

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.

You can always enlist the help of a legal expert to 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.

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.

Although utility easements are some of the most common, several other types of easements exist. Read more about easements to learn about private easements, easements by necessity, prescriptive easements and more.