After acquiring industrial land—especially through auction, tax deed, foreclosure, or distressed sale—the buyer often inherits access, easement, and utility encumbrances that are attached to the property title, not to the previous owner. These encumbrances can affect legal use, development potential, and long-term value, and may persist even after title transfer unless legally extinguished.
Here’s a breakdown of the most common types of inherited encumbrances.
1. Access and Ingress/Egress Easements
- Recorded Easements:
If a neighboring property has a legal right to use your land for driveway or road access, this right remains enforceable after acquisition. - Landlocked Properties:
If your property lacks direct road access and depends on an easement over another parcel, you inherit the obligation to respect that right-of-way. - Private Road Maintenance Agreements:
You may be obligated to contribute to the maintenance of shared access roads under recorded agreements. - Impact:
These easements can limit construction zones, restrict fencing, and require ongoing cost-sharing or right-of-use enforcement.
2. Utility Easements and Encroachments
- Utility Company Rights:
Electric, gas, water, sewer, and telecom providers may hold permanent easements for placing or servicing lines or equipment. - Overhead or Underground Lines:
You cannot build structures within these easements, and access must remain clear for inspection or repair, even if inconvenient. - Encroachments:
If the property contains utilities installed beyond their recorded easement limits, you may inherit liability for trespass or removal costs. - Impact:
Development plans may need redesign or setback adjustments to accommodate existing easements.
3. Drainage, Stormwater, and Conservation Easements
- Drainage Channels:
Properties often include natural or engineered drainage systems with restrictions on modification or obstruction. - Stormwater Flow Rights:
Local governments may require easements for stormwater detention basins, culverts, or runoff routes. - Conservation and Environmental Easements:
If any portion of the land is protected for wetlands, wildlife, or native vegetation, these encumbrances may prohibit development or require permits for disturbance. - Impact:
Limits usable land area, triggers compliance requirements, and can reduce development yield.
4. Cross-Easements and Shared Facilities
- Shared Utilities or Structures:
Industrial properties may share transformers, loading docks, fire lanes, or retention ponds with neighboring lots. - Cross-Access Agreements:
These agreements allow mutual access and may require cost-sharing or insurance obligations between parcel owners. - Survivability:
These encumbrances typically “run with the land” and remain binding on future owners unless terminated in writing. - Impact:
They can add complexity to ownership, maintenance planning, and future subdivision or sale.
5. Unrecorded or Implied Easements
- Prescriptive Easements:
If someone has used part of the property openly and continuously for access or utility purposes over many years, they may have gained an implied legal right, even without documentation. - Unrecorded Agreements:
Past informal agreements with neighbors may resurface after acquisition and require legal challenge or negotiation. - Impact:
These can lead to disputes, title claims, or requirements to grant formal access rights after closing.
