Modernising archaic easement laws

Easements take many different shapes and can be difficult to identify but their importance for landowners and developers cannot be underestimated.

A private right of way through an owner's property to be used by a few neighbouring owners to gain access to a road is an example of an easement that we may encounter quite commonly, while rights to light and support, though abstract, are important ones too. Historically, easements were probably established as a simple right of way to traverse through an estate for reaching other properties. These days they include, for instance, the underground services of water, drainage, gas, electricity and telephone and TV cables. Other similar but less common easements may also exist depending on the location of the property; for example, whether the land is urban or rural, or located close to a railway line or near farmland.

Rights of way have inevitable consequences for the viability of any proposed development. Many recent cases have highlighted the importance of a proper consideration and interpretation of rights to light for successful commercial transactions. Recent Land Registry figures have showed that at least 65 per cent of freehold titles are subject to one or more easements. Peculiarly, however, most landowners are oblivious of their presence until there is a disposition of the land or a legal issue arises with neighbouring properties.

Outdated rules

Existing laws relating to easements, with their complex interpretations, are largely outdated and need radical reforms to cater for the needs of modern society. Government targets for delivery of new homes emphasise the importance of updating the law to ensure that land development is not stymied. The need to strike a balance between protection of private rights and achievement of public policy objectives is the pivot on which the reforms revolve. The Human Rights Act 1998 provides further justification to amend the law to fulfil the requirements of article 1 of the first protocol of the European Convention on Human Rights on the right to property.

The Land Registration Act 2002 (LRA) has been in effect since October 2003 and has reformed a number of archaic aspects of the land registration system including those of easements. A significant reduction in the number of overriding easements has been initiated by stipulating that:

• Expressly granted easements over registered land cannot be overriding.
• Easements can only be created if there is convincing proof that they were validly granted or acquired.
• Easements cannot override a registered disposition unless it is obvious to the purchaser on a reasonable inspection of the land or has been exercised in the year before the disposition.
• Short leases will override but easements in them will not.

While the LRA has dealt with registration related issues, the Law Commission has recognised the need for drastic reforms in the law of easements and covenants.

Under current laws there are no provisions for discharging easements that have long been abandoned. This is a formidable hurdle for home owners and developers who are forced to abide by its presence despite it not having any effect. Courts are also reluctant to assume the abandonment. The Law Commission proposes to extend the jurisdiction of the Lands Chamber of the Upper Tribunal, giving it the authority to discharge an easement that has been unexercised for 20 continuous years. This would make more sense and help developers and conveyancers, saving them the job of rummaging through old title deeds to establish the significance of a dormant easement.

A number of meaningful easements will be created to help the landowner make better use of his land for valid purposes.

New statutory schemes

Implied and prescriptive easements have proved largely problematic when dealing in dispositions of land.

Implied easements are those created in the absence of a valid legal deed and normally arise on part sale of a land '“ whatever was previously used by the vendor becomes an automatic right for the purchaser of the part. Examples include rights of way, light, support, right to use a common road or take water from a lake. This appears rather unfair to the vendor preventing him from enjoying what was solely his. Implied easements are created quite easily and inadvertently. The Law Commission said there should be clearer rules for their creation, with fairness to the servient owner. It has suggested a statutory test scheme allowing the creation of implied easements where it is required for the reasonable use of the dominant tenement. The parties concerned are at liberty to expressly exclude them if required.

There are three methods of creating prescriptive easements: a) at common law, based on enjoyment since 1189; b) the fiction of a lost grant, a concept developed by the courts which is based on 20 years' continuous use under a fictional presumption that there was once a deed granting the right; and c) the Prescription Act 1832, which was enacted to combat the problems created by the other two but which has proved cumbersome for developers particularly in built-up urban areas.

These days all three methods are considered unnecessary and impractical. This has led the Law Commission to recommend their replacement with one statutory scheme based on 20 years continuous qualifying use '“ without force, without stealth and without permission and no use contrary to criminal law. The user need not be the same person.

The Law Commission has recommended the abolition of section 62 of the LRA 1925 with a view to prevent precarious benefits converting into legal easements and acting as a trap to the unwary.

No changes have been proposed for the exclusive right to park a car or vehicle as long as the servient owner can access the land, even if it is very restrictive.

The Law Commission proposes the abolition of the unity of seisin rule, which prohibits the existence of an easement if the burdened and benefited lands are in the same ownership and possession. This creates a multitude of obstacles for developers in plot sales where it has to be ensured that the easements granted for the benefit of each plot are valid and enforceable. They are open to challenge if plot sales are not completed in the correct order '“ for example, one plot is registered that purports to be subject to rights that do not yet exist at law pending completion of sale of the neighbouring plot.

Mortgages of part create further hurdles if the mortgagee was to exercise its power of sale with a mortgage covering only part of the borrower's land. Under the circumstances the mortgagee will be forced to sell the land without being able to grant any necessary easements over the borrower's retained land. It is possible to overcome this difficulty if the mortgagee is able to contractually compel the borrower to grant the necessary rights.

Common ownership would ease these conundrums. The Law Commission proposes abolishing the automatic extinguishment of easements if two registered titles come under single ownership, unless the registered owner made a specific application to the Land Registry. It will be also possible to register the ownership under one title. This recommendation may be applied both retrospectively and currently. However, this may run the risk of reviving already extinguished easements.

The primary aim of the reform would be to protect unwary purchasers who, under the present law, risk being subject to vague easements that they will not be aware of at the time of purchase of the property. If the reforms become law property buyers will not be bound by an easement that is not obvious and known to them at the time of purchase and is generally infrequently used. The complexities of the present law were clearly highlighted in London Tara Hotel Ltd v Kensington Close Hotel Ltd [2010] EWHC 2749 (Ch) '“ repeated transfers of the dominant title led to the use of the expired licence to use a service road on the servient land as an easement '“ it became a prescriptive easement due to 20 years' continuous use after the expiry of the licence.

Demand for new homes

The proposals have now been submitted to the government and the Law Commission is awaiting further instructions. Much depends on how much priority the government gives it to make it law. Having to deal with a cash-strapped economy it may put it on the back burner for some time. Equally, the pressure of demand for homes may stork a sense of urgency on the issue and the draft rules could end up becoming law in a few months. The proposals look good in theory and must go some way in mitigating the complexities encountered with the existing rules.

The Law Commission is scheduled to make rights to light a separate subject for consultation.

The existence of prescriptive easements and implied easements run contrary to the primary aim of the LRA '“ for rights and interests to be fair, transparent and open. All easements should be granted by legal deed to be effective like transfers or mortgages and registered at the registry '“ perhaps a further incentive for voluntary registration.