In simple terms easements are formal legal documents registered
on the title to a property setting out the rights you have over
neighbouring properties as landowners, or rights neighbouring
property owners have over your property. Utility providers and
Councils frequently register easements over property in order to
provide services. For example, an easement in favour of Chorus New
Zealand Limited to allow them to convey telecommunications and
computer media over an area on the title. Other examples of
easements in favour of Councils or neighbours are rights of way and
rights to drain water and sewage.
When buying a commercial property it is important to thoroughly
investigate any easements on the title so that the likely impact on
your future use and/or value of the property can be fully
This is an identified area on the title plan of the property
over which neighbouring property owners or utility
providers/Council have rights. You cannot restrict or prevent
access to these areas by constructing a building or landscaping.
This will impact not just on any planned development but on the use
you can make of this area of the property. The neighbouring
property owner or utility provider will have a right of entry
(after reasonable notice) onto your property to access the easement
area and carry out required work (e.g. new drain pipe).
The parties who benefit from an easement have maintenance
obligations and the starting point is the easement document itself
in terms of each parties obligations. If the document does not set
out the rules adequately, then there are a number of obligations
implied by statute. The relevant statute will be determined by when
the easement was granted and registered. The two main provisions
that can apply are :
Clause 11 Schedule 4 of The Land Transfer Regulations 2002
default position is that each party benefiting from the easement
contributes equally to repair and maintenance costs; and
With regard to driveways Clause 2 (d) of Schedule 5 of the
Property Law Act 2007 provides that each party makes a reasonable
contribution towards the costs of establishment, maintenance upkeep
and repair of a driveway to a reasonable standard.
Often these obligations are varied on title so that each party
pays in proportion to their use. So if there is a shared driveway
and front property owner will only pay towards the maintenance of
the small area they use to access their property while the back
property owner will pay the majority. However if repair is required
because damage is caused by one party then that party is
responsible for the full cost of repair. So for example if the
right of way is damaged by your heavy trucks you alone would be
responsible for the cost of repair.
Often easements (such as right of way easements) contain rules
and restrictions. For example, it is really important to check
whether the easements could have an impact on your planned use of
the property. Continuing with the above example, is your planned
use by heavy trucks 24 hours a day permitted by the terms of the
easement? Are there time limits on hours of use?
Are the services sufficient for your planned use of the
property? One particularly important issue in this digital world is
access to telecommunications/computer media. How is data conveyed
onto the property and how many neighbours need to be liaised with
to upgrade to the ultra-fast broadband?
Easements in favour of utility companies (e.g. drainage and
power companies) usually have wide ranging rights of entry once
they give notice to you, including the ability to come on to your
property for an unspecified time to upgrade facilities. Will this
potentially disrupt your business?
Due Diligence in purchasing a commercial property is the best
insurance against making decisions you later regret. Investigating
every easement fully will inform you as to what easements are
currently in place and their likely impact on you, as well as
confirm that all the necessary easements are in existence to
operate your business from the property.
We at Cavell Leitch have considerable experience in this area
and would be very keen to assist you with your next commercial
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Please briefly describe the main laws that govern real estate in your jurisdiction.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).