In the latest episode of Digging Into Land Use Law, Karla MacCary and Elinor Eizdi explore the law of implied easements, which is a murky area of the law that was made more clear by a recent California Supreme Court case that gave a property owner exclusive use of a portion of the neighboring property. Implied easements are a creature of equity which can save the value and utility of property where a property owner thought it had an easement, or even thought it owned land it did not. This is the first in a short series of podcasts on easements created without a written grant or reservation.
0:00:00.4 Karla MacCary: Implied easements are a creature of equity which can save the value and utility of property where a property owner thought it had an easement or even though it owned land that it did not. A recent California Supreme Court case brought some clarity to this murky area of real estate law.
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0:00:27.9 Speaker 2: Welcome to Digging Into Land Use Law, Nossaman's podcast, covering the development of all things in on or above the ground.
0:00:43.0 KM: Thank you for joining us for this episode of Digging Into Land Use Law. In this episode, we'll be exploring implied easements, their creation, the associated burdens and benefits, and some examples from recent case law. My name is Karla MacCary and I'm a transactional real estate partner at the Los Angeles office of Nossaman LLP. As part of my practice, I have performed title and survey review for buyers, sellers, and lenders, and helped address situations where what is present on the ground does not match what's shown on the title report or survey. With me today, I have Elinor Eizdi, a partner at our Los Angeles office, and Elinor has spent many years addressing easements in title matters, particularly with public agencies. This is part two of our series regarding easements. In the first installment, Simon Adams and I provided an overview of the law of easements in general. Now, before we start with our discussion of implied easements, we wanted to do a quick recap of easements in general and their nature. Elinor, would you like to start us off with some background regarding easements?
0:02:06.9 Elinor Eizdi: Thank you, Karla. An easement is an interest in a land of another that gives the owner of the easement a limited right to use another person's property. And two, to prevent the owner from using their own property. For example, there can be an easement for a private road. An easement can be temporary or it can be permanent. A temporary easement can be set to terminate on a specific date or once something happens. For example, a construction easement is one that we have all seen. It can set to terminate on a specific date or can terminate once the construction is finished. On the other hand, an easement for a private road would likely be a permanent easement. Easements can be created in several ways. An easement can be granted or can be reserved as part of a transaction. This can be done expressly in a written document. One example is a grant deed. An easement can be granted or reserved impliedly based on clear evidence of the party's end. An easement can be created by prescription, or a court can also impose an equitable easement.
0:03:17.8 KM: So today we'll focus on implied easements. There was a California Supreme Court case on implied easements in 2024 that brought more clarity to a subject that can be murky. However, before we get started, I do want to go over equitable easements as it will come up in the case that we are going to discuss, and it has some similarities with implied easements. In recent years, courts have used equitable easements when a user is not entitled to an easement on a more traditional basis. However, even then courts are very cautious when ordering one. So when the following conditions have been met, courts have exercised their equitable powers to issue a permanent injunction against future interference. One, a party has used and improved an area of land for a long period of time with an innocent belief that he or she had a right to use the land.
0:04:22.5 KM: Two, there would be irreparable harm if the party could not continue to use the land. And three, the property owner would suffer little harm from the further use of the land as an easement. The second and third elements show that for an equitable easement to be granted, courts must find disproportionate hardship and the requirement of disproportionate hardship serves three purposes. One prevents a property owner that is only slightly inconvenienced from exercising legal extortion against an innocent trespasser. Two, because the trespasser is effectively granted the power to take the property of another, the courts approach the creation of an equitable easement with an abundance of caution. And three, requiring the trespasser to show disproportionate hardship narrows the scope of the inquiry and prevents an inquiry as to which party would just make better use of the property. Now that we have some background regarding equitable easements, let's move on to implied easements.
0:05:44.4 KM: California has codified the doctrine of implied easements in civil code section 1104. The code essentially says that when one conveys a portion of an estate to another party but fails to expressly grant an easement in the written document, the law will infer that the parties intended the conveyed portion of the property to enjoy the preexisting uses of the grantor's remaining estate that were obvious and permanent. And the doctrine of implied easements is also a product of the common law, and the cases made clear that the law of implied easements is broader than Section 1104 read in isolation might suggest. It's important to keep in mind that generally implied easements are not favored in the law. And the evidentiary standard applied by the courts for recognizing an implied easement is a high one. Since implied easements deprived the owner of the property from exclusive use of its property, courts do not lightly infer that the parties intended to create one. The courts require clear evidence of the party's intent, taking into account the circumstances surrounding the transaction, the particular situation of the parties and the state of the property. The California Supreme Court case recently reviewed the law of implied easements and issued an opinion in the case of Romero versus Shih. Elinor, can you tell us about the case and what it means for property owners moving forward?
0:07:42.7 EE: Yeah, so Karla, as you mentioned the California Supreme Court has only issued its decision in the case of Tana Kova Romero versus Shih one. She earlier this year. Just to simplify, I'll refer to the cases Romero versus Shih. To give you some background, the case involves a dispute over a residential driveway in Sierra Madre consisting of an eight foot wide strip of land. In the early 1940s, Edwin and Ann Cutler or the Cutlers purchased two adjacent properties in Sierra Madre. They then built a home on the landline to the east. We'll refer to that property as the 643 properties. Sometimes later, the Cutlers built a brick garden planter in the front corner of the yard, and next to it a driveway running along the western edge of the property for its entire length. The planter and driveway encroached by about eight feet onto the Cutlers other property, which laid directly to the west. We will refer to that property as the 651 property. In total, they took almost 1300 square feet or about 13% of the 651 property.
0:08:48.7 KM: There is no doubt that that is a significant portion, 1300 square feet, that's the size of my first house.
0:08:57.4 EE: That is definitely something more fighting for Karla. Eventually the Cutlers built a house on the 651 property. In connection with the project, they applied to the city to adjust the boundary between the two properties to the line marked by the chain link fence that had been installed by the driveway and planter. Essentially, what they wanted to do was adjust the boundary line so the the encroached area would be considered part of the 643 property and not part of the 651 property. However, they never completed the process and the boundary line remained as it was. Interestingly, later transfers of each of the properties included the encroached area in the legal description. Since the landline adjustment was never completed, the owners of the 643 property did not own the land with the encroaching improvements and the grand deeds for the 643 property were wild deeds with respect to that land. Karla, do you want to tell our listeners what wild deeds are?
0:09:53.8 KM: Yes. I love the term wild deeds. A wild deed is a deed outside of the chain of title. So even though the deed is recorded, because it's not in the chain of title, it does not effectively convey title. Here for example, the owners of the 643 property did not own the land with the encroachment. Any recorded deed was not connected to the chain of title for that piece of land.
0:10:20.6 EE: Exactly. So for the next three decades, the encroached area, which was technically part of the 651 property, was used for the benefit of the 643 property. When acquiring their respective properties the Romeros and the Shihs were not aware of any easements, encroachments, or boundary disputes. A year after the Romeros acquired their property, the 651 property, they took some measurements of the front yard for a landscaping project and realized that their parcel was not as wide as they'd expected. They had done a survey of the property, which revealed that the 643 properties garden planter and driveway were encroaching on their property, the 651 property. The Romeros then sued the Shihs. In a bench trial focusing on the easement issue the court found that the Shihs had an implied easement over the strip of land. The court noted that the focus of the implied easement analysis is what the parties intended at the time of dividing or conveying the property. Whether their intended use was exclusive or not does not matter. In the alternative, the trial court created an equitable easement over the disputed area. Karla, that is the exact issue that you covered earlier in our podcast.
0:11:37.8 KM: Yes, it is.
0:11:40.6 EE: As applied in this case even if the Shihs did not meet the burden to justify an applied easement in order to promote justice, the trial court created an equitable easement in favor of the Shihs over the strip of land. The appellate court reversed on the implied easement issue. The appellate court found the critical issue to be whether the easement was exclusive, meaning if it divests the owners of nearly all of the rights that the owners customarily have in residential property, including accents and practical usage. While the court acknowledged that easements can be exclusive, it held that it does not apply to implied easements. Since the right to use the land as a driveway would effectively prevent the property owners from using the land the appellate court concluded that the easement should have been in writing.
0:12:31.1 KM: But the case did not end there. Did it? It actually went to the Supreme Court. Right?
0:12:35.5 EE: Yeah, that's right. The drama did not end there. The Supreme Court reversed and remanded with directions. In its decision the Supreme Court looked at the elements of an implied easement. One, the owner of the property conveys or transfers a portion of that property to another. Two, the owner's prior existing use of the property was of a nature that the parties must have intended or believed that the use would continue, meaning that the use was known to the parties or was so obviously and apparently permanent, that the parties should have known of the use. And three, that easement is reasonably necessary to the use and benefit of the parcel that is benefited by the use of the easement. The California Supreme Court also looked at the issue of exclusive implied easement, which the appellate court paid particular attention to.
0:13:20.6 KM: Before we continue, Elinor, can you tell our listeners what exclusive easements are?
0:13:28.5 EE: Yes. So in general the holder of an exclusive easement has the right to exclude others from using the easement area. Here, the Supreme Court identified a range of exclusivity, but noted that an easement by its nature is limited and is considered a non-possessory interest in land because it permits the holder of the easement a limited use of the property for a particular purpose, leaving the property owner the right to use the property for all other purposes that do not unreasonably interfere with the easement. While the Supreme Court agreed with the appellate court that effectively exclusive easements are not prohibited. However, it disagreed with the appellate court as to whether the law prohibits courts from recognizing effectively exclusive implied easements. The easement recognized by the trial court was broadly exclusive and that the Shihs had the right to use the property in a manner that effectively excluded the property owners from the most practical use of the easement area.
0:14:24.5 EE: However, the Romeros, the property owners could use the property in a manner that was not inconsistent with the Shihs use, including the right to terminate the easement if the Shihs stopped using the easement for the specified limited purposes. The California Supreme Court also discussed in detail the line of cases relating to easements by prescription, which the appellate court relied upon. Those are easements that can be created by a party's unilateral conduct, specifically by continuously using the property for five years in a manner that is open, notorious, and clearly visible to the owner of the land and hostile and adverse to the owner. The Supreme Court ultimately distinguished these cases and noted that permitting express or implied easements do not create any of the statutory nullification concerns that prescriptive exclusive easements do.
0:15:16.1 KM: We'll cover prescriptive easements in our next podcast, so please stay tuned for that.
0:15:22.9 EE: So going back to our case, ultimately the Supreme Court's holding did not end the proceedings. The court remanded for the Court of appeals to consider whether the evidence supports the trial court's conclusion that an implied easement exists in this case. So just to sum it up, Romero versus Shih clarifies the law on the subject of implied easements, but more needs to be done before one can rely on an implied easement.
0:15:48.1 KM: Can you give our listeners some suggestions as to how to protect themselves?
0:15:53.6 EE: So if you have a project that is relying on the benefit of an implied easement, you will need to go to court and ask for the court to find that there is an easement before you or your investors or other finance sources can have comfort you have the easement rights you think you have. After all, the owner of the property could challenge any rights you might think you have. Any associated litigation will be timely, costly, and there's no guaranteeing the outcome.
0:16:19.3 S2: There are also a few lessons from Romero versus Shih that we should keep in mind. As we can see from the case, the buyers of the 651 property did everything that was customary in buying a house, but did not discover the encroachment and the trial court held against them, but the buyer did not get a survey. While it's not very common when buying residential property to get a survey, a thorough title review and a survey or boundary line survey are necessary to avoid the nightmare situation shown in this case, and even more so when you're acquiring high value property and with the cost of real estate in California now, you need to ask yourself whether it makes sense to get a boundary survey as part of your due diligence in buying a house. A chain of title report would also have revealed the problem here, but a survey is much more useful because it would be necessary in any event for landscaping and in construction projects. Well, thank you Elinor for talking with us today about implied easements, and thank you to our listeners for joining us for this episode of Digging Into Land Use Law. For additional information on this topic or other environmental land use in real estate matters, please visit our website at Nossaman.com and don't forget to subscribe to Digging Into Land Use Law wherever you listen to podcasts so that you don't miss an episode. Until next time.
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