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Buying a new house where owner did not disclose easement

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deepgrey

Junior Member
What is the name of your state (only U.S. law)? California

Hi, I am a first time home buyer in the process of buying a new house for which I have paid the earnest deposit. I had added an inspection contingency initially to the house but after getting a foundation inspection and going through all the documents that the seller provided, I decided to waive the contingency. I got the title company report today for the house and turns out there is a public utility easement on the property. The seller had not disclosed this (explicitly stated that they were not aware of any easement).

I wanted to know what are my options now. If I back out of the house, do I lose my deposit ? (I have waived all my contingencies. signed the waiver yesterday and only reviewed the title document today)
Would it still be possible for me to renegotiate with the seller to bring the price down.
How do I calculate the lost value of having a utility easement on the property
Should I even be concerned about this ? The easement is to the side of the property between it and the neighboring house. (There is an additional easement to the front of the house but I am not too concerned about it since it is pretty much present for all houses in the neighborhood.)

Please help with any advice/comments. To be honest I am completely new to the home buying process and a bit overwhelmed with the whole process.
 


HRZ

Senior Member
IN my lay view a lot depends on just how broad the easement is ....what. You think might be a nominal nuisance might in fact give utility right to put in major lines and run a service roadway to maintain same and it might severely limit what you can do with that area of your property.

I think it is a material compromise on the value of your property and it is most unlikely that the seller was unaware of easement on his lands . IT is highly unlikely that the seller can cure an easement by removal of same and you have about the same zippo odds if you buy it .

THe lost value may be in eye of beholder and the expert one picks to advance his or her view . And a better view of high cost might be the cost to seller to relocate the easement someplace else . Which I'll bet is sky high.

Personally I would walk away from the deal or insist upon a major reduction in the price or simply invite the seller to remove the side easement and deliver a deed wo same ( which is ultra unlikely to happen)

EVeryone who stands to make a profit or commission if you close is not there to protect your point of view ....

I'm not sure what you waived ..I hope you did not waive any title/ deed issues . IF you unwisely sign stuff wo knowing it's impact you are unlikely to be your own best advocate ....I think failure to disclose an easement is a super big deal...but who knows what you waived ..and now you know about the easement !

You need a seasoned real estate lawyer like pronto .
 

LdiJ

Senior Member
What is the name of your state (only U.S. law)? California

Hi, I am a first time home buyer in the process of buying a new house for which I have paid the earnest deposit. I had added an inspection contingency initially to the house but after getting a foundation inspection and going through all the documents that the seller provided, I decided to waive the contingency. I got the title company report today for the house and turns out there is a public utility easement on the property. The seller had not disclosed this (explicitly stated that they were not aware of any easement).

I wanted to know what are my options now. If I back out of the house, do I lose my deposit ? (I have waived all my contingencies. signed the waiver yesterday and only reviewed the title document today)
Would it still be possible for me to renegotiate with the seller to bring the price down.
How do I calculate the lost value of having a utility easement on the property
Should I even be concerned about this ? The easement is to the side of the property between it and the neighboring house. (There is an additional easement to the front of the house but I am not too concerned about it since it is pretty much present for all houses in the neighborhood.)

Please help with any advice/comments. To be honest I am completely new to the home buying process and a bit overwhelmed with the whole process.
As far as I know virtually every property, in every city, in every state has a utility easement on it. That would not be cause for concern in my book. Yes, I know that you mentioned the front, but most have one down the side or across the back as well.
 

HRZ

Senior Member
THere may well be an easement from say the roadway into the home for utilities ...that is common and sort of required ...but an easement tru my side yard to service other places is a different matter and the OP needs some skilled legal eyes on just what all is involved .
 

justalayman

Senior Member
As far as I know virtually every property, in every city, in every state has a utility easement on it. That would not be cause for concern in my book. Yes, I know that you mentioned the front, but most have one down the side or across the back as well.
Well, not actually true. I own 3 properties that have no utility easements on them. On two of them the roadway that has utility easements ends where it abuts my property (the two are end to end and were split from a larger parcel so there was never any need for utility easements to be granted) and with the third the utility easement is actually entirely on the neighboring property.



Regardless, unless the seller specifically lied when asked if there were any easements then it’s likely the op is simply out of luck. Easements are a matter of public record (recorded easements anyway which is what we are speaking of here) and and as such, such an issue is not required to be disclosed by a seller. It is easily obtainable through research of the public records. In fact, most deeds are written to include transferred rights are subject to all easements liens and encroachments of public record without including any individual situation.
 

HRZ

Senior Member
That said, the OP as a newbie at RE matters would be wise to have his contract and those easements reviewed by his choice of legal counsel sooner rather than later and before he signs any more things he is not quite sure about.

ONe of my relatives is a rather skilled RE lawyer with a flair for technical details ...and his opening comments about any residential matters involving easements is to run away from any such deal ( absent the ones for utilities to enter your own dwelling )! And n his personal life he follow his own advice and walked away from " great deals " encumbered with easements ...even ones that to my eyes looked like low risk /no risk situations .....

IF there is a recorded easement and you close..you inherit all what the easement says ..good or bad....IF the seller made a material misrepresentation on the sellers disclosure it may provide you a walk away window ...but you want legal counsel you retain to advise as to your options .
 

FarmerJ

Senior Member
BY chance did you ever find out exactly what is in the easement area now ? if say its cable tv wire, telephone , elect those things are so normal BUT if it was something really big such as the water tower down the block has a big pipe that is under the yard then that might be enough to make some people not want to live there if it seriously limited what could be built or done to the property.
 

deepgrey

Junior Member
First of all thank you for all the comments. All this helps. To provide more information the easement mentioned in the title is a 10ft easement between this house and the neighboring house, over which currently there is a fence. This house is in a neighborhood where four houses on each block have the same easement.

I do not know what is currently present on the easement. How would I be able to get this information?
 

HRZ

Senior Member
WHat is currently there may not be as important as the language in the grant / easement which addresses what they can put there ! ...I doubt they can put the RT 66 bypass thru on 10' but they might be able to run a service road and require the fences be removed....sort out the details NOW
..I've seen a fenced in distribution substation in less than 10' ...then again the one pole in my backyard has not bothered me in 50 years ...do your homework up front.
 

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