Checklist of items to be considered when insuring an appurtenant easement:
Note: Some items might need special consideration or additional treatment.
Easement Must Be Appurtenant
The instrument to be insured must be an appurtenant easement.
Licenses, profits a prendre, and easements in gross are generally uninsurable.
The easement must have been created for a specific purpose (driveway, ingress and egress, party wall, etc.). A plain or nonspecific purpose easement is an impossibility.
The purpose of the easement, as stated in the easement grant, must be made a part of the easement description.
In the event that the exact language stated in the easement grant cannot be used, the purpose of the easement must be described as follows:
For the purposes described in said (instrument) (easement).
Exclusive or Nonexclusive
Exclusivity, if claimed, must have been specifically stated in the instrument that created the easement.
In any other case, the easement must be referred to as a nonexclusive easement.
Easement Must Have Been Created By A Written Instrument
Appurtenant easements cannot be created by parol. While it is possible to create an easement appurtenant by prescription, it is not insurable without a court decree.
The Instrument Creating The Easement Must Have Been Properly Executed
The grantors must have possessed full legal capacity at the time of the execution of the easement.
The Instrument Creating The Easement Must Have Been Executed By All The Owners Of The Servient Estate At The Time Of The Execution
A grantor cannot create an easement with respect to land which the grantor does not own. Consequently, one who has an undivided interest as tenant in common or is a concurrent owner cannot create an easement effective as to the shares of any other tenant in common or concurrent owner.
Joinder Of The Spouses
Proper joinder or consents from spouses are required and must be filed for record.
Joinder Of The Lienholders
If all those parties holding interests of record against the servient parcel have not joined in the execution of the instrument that created the easement, proper joinder or consents from the parties must be filed for record.
The instrument creating the easement must be properly acknowledged.
The instrument creating the easement must be properly recorded.
Chains Of Title To Be Examined
Generally, two different chains of title need to be examined: one pertaining to the dominant estate; another pertaining to the servient estate.
In some cases, it may be necessary to show two sets of exceptions: one in relation to the dominant estate; another in relation to the servient estate.
Ownership Of The Dominant Estate And The Servient Estate At The Time Of The Creation Of The Easement
Ownership in different parties, at time of the creation of the easement is acceptable.
Ownership in the same party, but severed at the time of the creation of the easement, is acceptable.
Ownership in the same party when the easement is created by a mortgage is acceptable.
However, if ownership is in the same party and not severed at the time of the creation, an easement appurtenant is not created for insuring purposes.
The Easement Grant Must Have Run To The Owners Of the Dominant Estate In The Same Manner In Which They Hold Title To the Estate.
Condition Of The Servient Estate At The Time Of The Creation Of the Easement
All the defects, liens, and encumbrances of record affecting the servient estate at the time of the creation of the easement must be shown (if still in existence) as exceptions affecting the servient estate.
Condition Of The Servient Estate Subsequent To The Creation Of The Easement
In order to determine that the easement has not been terminated either by voluntary release or by merger and also to determine whether it is subject to the payment of any taxes and assessments, the examination of the easement premises must be continued to the date of the policy which will insure the ownership of the easement. Any unpaid taxes or assessments affecting the easement premises, as of the date of the policy, must constitute a Schedule B exception unless the tax assessment of the easement premises specifically excludes the easement and the easement is assessed as a part of the benefited land or state law provides that the enforcement of taxes and assessments on the easement premises will not destroy the easement.
Under Michigan law, where a servient tract was sold for taxes prior to December 14, 1990, said sale will serve to extinguish an easement between private parties. MCL 211.67b. However, this rule should not be relied upon in waiving easements that encumber the insured land.
Subsequent to December 14, 1990 any land sold for taxes shall remain subject to any visible or recorded easement. MCL 211.67b. Of course, it is difficult to determine that an easement was visible as of the date of tax sale. As such even for tax sales after December 14, 1990 prudent underwriting requires that an easement be recorded in order for it to survive.
If the easement is reciprocal, that is, if the dominant estate is also a servient estate, a proper exception must be made in Schedule B of the policy.
Necessity For Exception In Connection With The Easement To Be Set Forth In Schedule B
Any unusual burden, qualifications, or restriction contained in the easement grant should be specifically set forth in Schedule B of the policy.
Form Of Creation Of The Easement
Deed of conveyance
Depending upon the form of creation of the easement, it might be necessary
to ascertain compliance with some other additional requirements. For example,
easements by necessity or implication must have been established through valid
and final legal proceedings. We do not insure easements by prescription, implication,
or necessity unless recognized by a final court decree of competent jurisdiction.
Easement Created By A Mortgage
An easement may be insured in a loan policy when the only grant of the easement is by the mortgage itself. This can only occur when the owner of the benefited land, which is the one to be mortgaged, is also the owner of the easement premises. Then, by the terms of the mortgage, the owner establishes an easement over the easement premises for the benefit of the mortgaged premises. This easement will inure to the benefit of any purchaser of the benefited land at any foreclosure sale of the mortgage.
Easement Created By Reservation Of Grant In Favor Of A Third Person
This situation occurs when the owner conveys the premises and attempts to reserve an easement over the premises for the benefit of a third person (an owner of adjoining land). Any interest created in this manner is uninsurable.
Has The Easement Been Created For The Benefit Of A Smaller Parcel Of Land?
An appurtenant easement will not benefit any contiguous land acquired by the owner of the dominant estate subsequent to the creation of the easement.
The Easement Is Unobstructed And In Use
There is no information, recorded or unrecorded, to the contrary.
Factors Or Events That Might Have Resulted In The Termination Of The Easement
Expiration of its duration (depending upon the terms of its creation)
Satisfaction of condition or happening of contingency
Foreclosure of a senior lien on the servient tract
Termination by operation of law
Possible termination by an adverse possession
Cessation of its necessity
Sale for taxes (opinions are divided)
Has The Easement Been Properly Described In The Commitment?
Has The Easement Been Properly Described In The Policy?