Jason Bryk 

Phone: 204.956.3510

Fax: 204.957.0227

Email Me

THE BROWN PAPERS

Beware of Broadly Worded Utility Easements

November 2018


Updated November, 2018

  1. THE PROBLEM

Persons and businesses acquiring and disposing of interests in real property (including mortgagees) and their counsel are used to seeing - and frequently glossing over - the existence of utility and similar easements recorded either directly (or by way of caveat) against the titles to the lands with which they are concerned.  The rights and interests ("Utility Easements") given to holders of such interests ("Utilities") - who are usually, but not always, government, or government owned, created or regulated, entities authorized and tasked with the power and entitlement to provide services such as electricity, natural gas, water and sewage removal ("Utility Services") - require that landowners ("Landowners") grant them rights to enter on a Landowner's property and to install, operate, utilize and maintain the facilities and equipment required in order to create, transport and distribute the Utility Services.  Because a Utility will need to maintain its Utility Easements notwithstanding changes in ownership of the underlying lands, Utility Easements are constituted as interests in land so as to enable the Utility to continuously provide its Utility Services without interference from any Landowner succeeding the original granting Landowner in title.


In the past, original Utility Easement granting Landowners and others acquiring interests in the owner's property (including mortgagees and subsequent owners) did not usually consider the existence of an Utility Easement (and the Utility's right to maintain its Utility Easement rights in priority to all other land interests and rights in the property), as a substantial or material burden on the property's ownership.  This was because earlier versions of Utility Easement grants or agreements specifically limited the Utility's Utility Easement rights to a particular or defined area (or areas) over, along, above and/or below the Landowner's soil.  The area covered by a Utility Easement might be typically described as a strip of land 20 feet wide and running parallel to the northern boundary of the Landowner's property.  In more recent iterations of this scenario, the Utility Easement rights would be specified and limited to be those referable to a parcel of land shown outlined in a particular colour on a particular plan (an easement or right-of-way plan) registered (with its own unique registration number) in a particular Land Titles Office.  Thus, if I wanted to buy your land, and upon searching your title, I noted that a Utility had recorded a Utility Easement against it, I would know - before committing to close, or perhaps even before entering into a purchase and sale agreement - what were the limitations that I would "inherit" under the Utility Easement, and in particular, exactly where those rights applied. Thus, at the outset, I would know whether or not the Utility's Utility Easement rights would interfere with - or perhaps render impossible - my intended use, or future anticipated use, of the Landowner's property.  If my intended use of your property was completely incompatible with the Utilities Easement, I would simply "pass" on buying or completing the purchase of your property.  On the other hand - and this is usually what happened - I would conclude that the Utilities Utility Easement rights would not materially affect my intended use of the property, and thus I would be quite willing to buy (and my financier would be quite willing to lend against) the property subject to the Utility's prior easement rights.


More recently, Utilities have commenced taking Utility Easements which entitle them to enter and install, operate and maintain the Utility's facilities and equipment anywhere on the Landowner's property, in some place or places to be determined by the Utility in the future.  Thus, at the time of the creation of the Utility Easement, the Landowner does not then know, and may not know for some time, exactly where in her, his or its land the Utility Easement (and the rights and restrictions referable thereto) will be applicable within the boundaries of the Landowner's property.  It is this writer's understanding that the practice amongst at least some Utilities is to eventually "narrow" the application of the Utility Easement rights to a specified area or areas - no doubt delineated by a new plan recorded in the Land Titles Office.  But this will only happen at some initially unknown time in the future.  Presumably, the Utility's rationale for wanting this extreme flexibility is because that while, at the outset, it knows in principle that it will want and need Utility Easement rights somewhere over the owner's property, until future growth and development plans for the property - and in particular, the surrounding area - are actually known and substantially finalized, the Utility itself doesn't really know where its facilities and equipment will need to be located.  In the meantime, the result for the Landowner is that it can't really make any effective use of and can't practically make any concrete plans for the future use and development of the property.


Utility Easements of this nature ("Indefinite Area Utility Easements") have become popular (amongst Utilities) since the recent amendments to The Real Property Act (Manitoba) (the "MRPA") which sanction the creation of "statutory easements".  The primary differences between the "traditional" form of easement and a statutory easement are:


(a)          the holder of a statutory easement can enjoy it without itself owning an adjacent or nearby particular parcel of real estate to be benefitted by the easement (ie, no "dominant tenement" is required);


(b)          a statutory easement is not effective to create an interest in land, ie, binding the current and all successive owners, unless and until it is registered at the Land Titles Office*;


(c)          with a few exceptions, only government owned or government regulated and controlled Utility Services providers can hold a statutory easement; and


(d)          the holder of a statutory easement may, if it so desires, obtain a title to its easement, which then enables it to more easily and efficiently deal with its easement, whether by way of transfer, mortgage or other disposition.

The following are examples of the breadth of the wording in Indefinite Area Utility Easements which the writer has reviewed in two recently created (within the last 5 years) statutory easements:


(i)            First, the easement agreement recites the fact that the Landowner owns two parcels of land (Lots 1 and 2 in a specified registered plan), and then, in the "body" of the agreement, specifies that the Landowner grants to the Utility the right and easement "to enter into the right-of-way, and to use, excavate, construct, maintain, repair, etc. its overhead and/or underground equipment and facilities in, over and upon the "right-of-way", then, the agreement further provides that the Utility has the right and easement to "enter onto the land" for the purpose of cutting trees and bush which, in the Utility's opinion, may "interfere" with (its equipment).  The agreement further provides that without the Utility's prior consent in writing, the Landowner is not entitled to "excavate, drill, place, install, erect or permit to be executed, drilled, placed, installed or erected, any pit, well, foundation, pavement, material, fence, structure or other thing on or over the Land which will extend more than 12 feet above ground level or within 2 feet of underground cable".  What is particularly noteworthy concerning this easement granting language is the fact that the "right-of-way" is NOT, unlike aforementioned previously crafted easement agreements, in any way defined, other than with reference to the TOTALITY OF THE LANDOWNER'S LAND.  Thus the whole of the Landowner's property appears to be subject to the Utility's right to place and maintain its equipment anywhere of the Utility's choosing at some indefinite point in the future.


(ii)           A similar easement agreement but with a different Utility, (again) recites the fact that the Landowner owns particular parcels of land, and then goes on to provide for a grant to the Utility of a right and easement, being "…those portions of the said lands                  meters in width…", and the word "blanket" has been filled in (presumably by the Utility) in the indicated blank space.  Again, the Landowner is prohibited from effecting any improvements to the property without the Utility's prior written consent, thus effectively "sterilizing" (for an indefinite period of time into the future) the Landowner's property.

Lest there be any doubt about it, this writer does not find fault with easement agreements which, in addition to providing for a defined right-of-way, additionally grant the Utility certain "subsidiary or supporting rights and easements", in particular:


(a)          the right to enter other portions of the Landowner's property for the purpose of gaining access to and bringing equipment to the defined right-of-way area or areas; and


(b)          the right of the Utility to enter upon the Landowner's property for the purpose of cutting down trees, brush, etc. which interferes with the proper installation, operation and maintenance of the Utility's equipment;


provided that such "subsidiary" or "supporting" rights are exercised reasonably and don't interfere with or damage the property and other improvements on the property.


The "problem" is the virtual total emasculation of the Landowner's property rights when the property becomes subject to an Indefinitely Area Utility Easement.

  1. THE NATURE OF STATUTORY EASEMENTS UNDER THE MANITOBA REAL PROPERTY ACT

As noted above, there are significant differences between the "traditional" or common law concept of an easement and a statutory easement.  Statutory easements have been contemplated and sanctioned under the MRPA for quite some time, but the provisions in the legislation dealing with them were expanded and strengthened in 2011, in part to make it clear that a statutory easement was, except as otherwise provided in the MRPA, an easement of the same nature and character as the "traditional" or common law easement.  This is reflected in Section 111.1(1) of the MRPA which provides, in effect, that once registered, a statutory easement "is an easement for all purposes", and, "is an interest in land", and, "runs with the land notwithstanding that the benefit of the right is not appurtenant or annexed to any land of the (grantee) in whose favour the right was granted".  Additionally, Section 111.1(1) provides that "…and the conditions and convenants expressed in the instrument (creating the easement) apply to and bind the respective successors, personal representatives and assigns of the grantor and grantee, except to the extent that a contrary intention appears in the instrument". (The underling here is for emphasis purposes).

Could a Utility successfully argue that an Indefinite Area Utility Easement created as a statutory easement is binding on the original grantor and all successors in title to the original Landowner's property, on the basis of the above-quoted provisions in Section 111.1(1), notwithstanding that there is no clear demarcation of the boundaries and/or location of the easement rights?  In this writer's opinion, while there may be a possibility of success for such an argument, it is unlikely that a Court would so interpret the statute in that manner.  This is because Section 111.1(1) appears to strengthen and emphasize the nature and effect of statutory easements by emphasizing that they are akin to "traditional" or common law easements.  The statute's language does not purport to do away with or exclude all of the previous law pertaining to easements generally.  Just the opposite.  The Courts have - and continue to be - wary of interpreting a statute on the basis that all common law related to the subject matter of the enactment is extinguished or excluded unless the statutory language specifically says so.

  1. THE TRADITIONAL OR COMMON LAW APPLICABLE TO EASEMENTS

So what does the traditional/common law say about easements where the location of an easement is unknown, indefinite, unclear or is to be determined by the holder of the easement at some future time or times?  In reviewing the applicable law, the writer had hoped to find an unambiguous statement by Court to the effect that an easement of this nature is, in short, void for uncertainty.  In fact, the writer has not been able to find such a clear statement.  However, the case law and academic commentary does reveal certain general principles.  A sample of these are the following:


(a)          From Gale on Easements, Nineteenth Edition ("Gale"):


(1)        "It is necessary for an easement that there should be a servient tenement that can be defined and pointed out."


"Difficulty in identifying the servient tenement, though not any doubt as to its existence, may arise where, for instance, a house is granted with the right to receive water, or discharge drainage, through a pipe in an adjoining property retained by the grantor.  In such a case the servient tenement may be thought to consist of the adjoining property or some part of it, or of the pipe itself, if this is not part and parcel of the dominant land, or of the adjoining property and the pipe." 


"For most practical purposes the question is of little importance, where it is clear that the right is an easement, and that, whatever the servient tenement may be, the pipe is entitled to protection from interference, including presumably, interference by withdrawal of support.  Furthermore, in cases of doubt the deed will be construed against the Grantor.  In other similar cases the identity of the servient tenement may bear on the question of whether the so-called easement is not repugnant to the proprietary rights of the servient owner."


(2)        "It is obvious that the identity of the servient tenement is, at least in theory, a relevant consideration.  "If Blackacre had a right to receive water through a pipe laid under A's field, the right is clearly not repugnant to A's proprietary rights in the field, and if the servient tenement is considered to be the field, there is no difficulty on principle in establishing an easement.  A, however, could sell the greater part of the field to entirely free from the easement; the servient tenement must, it is thought, consist at most of the space occupied by the pipe and so much of the soil on each or one side as is necessary for access for repair.  Of the servient tenement so constituted A is very nearly (and certainly of the space occupied by the pipe) deprived of possession; yet the validity of an easement of this kind is undoubted."


(3)        "The question of whether the right granted or claimed by prescription is too extensive to be an easement has been considered in a large number of decided cases.  Unfortunately, the law is not clear and precise as to the boundary between a right which can be an easement and a right which is too invasive of the rights of the owner of the land to be an easement."


(4)        Quoting from the recent (2007) UK House of Lords Judgment in Moncrieff v. Jamieson, "Every servitude prevents any use of the servient land, whether ordinary or otherwise, that would interfere with the reasonable exercise of the servitude.  There will always be some such use that is prevented.  The servient land in relation to a servitude or easement is surely the land over which the servitude or easement is enjoyed, not the totality of the surrounding land of which the servient owner happens to be the owner." 


(5)        "…it would be fairly meaningless in relation to either easement to speak of the whole estate as the servient land."


(6)        "I do not see why a landowner should not grant rights of a servitudal character over his land to any extent that he wishes." 


(7)        "I would, for my part, reject the test that asks whether the servient owner is left with any reasonable use of his land, and substitutes for it a test which asks whether the servient owner retains possession and, subject to the reasonable exercise of the right in the question, control of the servient land."


(8)        "In the case of an express grant of a right of way, the extent of the right granted depends on the express (wording) of the grant.  Those terms must be construed in accordance with the general rules as to the interpretation of legal documents."


(9)        "A right of way should, generally speaking, … be bounded and circumscribed to a place certain, but (in a 1905 English Court of Appeal judgment) the Court was of the opinion that the fact that the occupiers of a tenement to which a way by user was claimed had used, not a definite road marked out between (specified or clearly delineated geographical lines) but a number of tracks indifferently, did not prevent the right from being acquired."


(10)      "If the right in question did amount to a right to use the whole of the area to the complete exclusion of the owner, it could not be an easement"  A right to park a car on a forecourt capable of taking two or more other cars is, however, certainly capable of being an easement and falls on the easement side of what has been called the "ill-defined lined" between rights in the nature of an easement and rights in the nature of an exclusive right to possess or use."


(11)      "An easement that stops short of exclusive possession, even if it deprives the owner of much of the use of his land, or indeed of all reasonable use of it, should be valid."


(b)          From Chapter 17 of Anger and Honsberger, Law of Real Property, 3rd edition

"(One of the requirements for the constitution of a valid easement is (that) the right must be reasonably definite." "It seems, however, that the standard of certainty is not a stringent one. In one application to have a right-of-way struck down as too vague, the court stated: "A document will not be set aside for vagueness unless, after the application of legal reasoning and legal analysis, it is impossible to decide the meaning that should be given to the document.".


(c)          From Chapter 17 INCORPOREAL HEREDITAMENTS in the Canadian Encyclopedia Digest 4th (online) Easements:


(1)          "An easement may grant a right to construct and use a swimming pool on the servient land, but the extent of the right will be limited by the proprietary rights of the servient owner.".


(2)          "…a reciprocal parking agreement granting rights to park on "first come/first serve" basis (is) not inconsistent with proprietorship or possession of the servient tenement…".


(3)          "…(the) right to conduct well water may be subject of (an) easement but there can be no easement to exclusive use of (the) water…".


(4)          "…a sewer easement under the rear five feet of a property in favour of a municipality may be of no restrictive effect to the normal use and enjoyment of the property, and therefore not sufficient to entitle a purchaser to repudiate an agreement of purchase and sale…".


(5)          "Where no way is specified in the instrument of grant, the grantor may assign a way, but that way must be a reasonable one, a way that will enable the grantee to enjoy, in a reasonable manner, the thing granted.  If the grantor does not assign a way, or assigns a way that is unreasonable, the grantee may select a way, that is "most direct and convenient" for himself or herself, but one the use of which will not unreasonably interfere with the grantor in the enjoyment of the rights upon the servient tenement.  Questions of this character are not questions of law, but of fact to be determined upon the evidence.  The grantor is not entitled to relocate a right-of-way.".


(6)          "A grant of easement will not be set aside for vagueness unless, after the application of legal reasoning and legal analysis, it is impossible to decide the meaning that should be given to the document".


(7)          "…a grant of easement cannot usurp the proprietorship or possession of the servient owners".


 

  1. LEGAL CONCLUSION

It is the writer's conclusion that, given the varying and variable judicial "glosses" on the matter of the extent of easements, it is almost impossible to determine in advance with respect to any particular fact situation, just what a Court would hold where the validity of an Indefinite Area Utility Easement was challenged. Arguments can be made both ways, but this is unsatisfactory to both property owners whose lands are burdened by Indefinite Area Utility Easements and to the Utilities themselves. If Indefinite Area Utility Easements are struck down on the basis of vagueness or on the basis that the effect of same is to essentially make unusable all of the easement owner's lands thereby affected, the Utilities will be faced with the dilemma that they can’t get a "workable" easement unless they determine in advance of development of the property, exactly where the easement is to run.  Making such determination at a time when there are "future unknowns" puts a Utility in an almost impossible position. On the other hand, if a Court held that Indefinite Area Utility Easements were valid and enforceable, then until development is actually known for the whole of a property owner's lands, and appropriate "narrowed" arrangements can be put in place between owner and a Utility, as suggested above, the owner's lands will be essentially frozen or emasculated.

  1. SUGGESTED SOLUTION

One solution (there may be others) would probably require legislative intervention designed specifically for Utility Easements.  Perhaps there could be a statutory provision (or provisions) to the effect that firstly, prohibited Utilities from taking Indefinite Area Utility Easements, but then secondly, provided that when - but only when - a property owner has decided to develop (including in particular, subdivide) its property and the main elements of the development (including subdivision) are known, the Utilities would then be entitled to require the owner to grant specifically and narrowly defined easements as a condition of permitting development and/or subdivision and/or being able to be serviced by the Utility(s) then requiring Utility Easement(s).  When so acquired, such easements would be given retroactive priority over all other interests upon registration, much like statutory easements. This could be supplemented with a clear warning to owners of undeveloped property that if they wished to improve the property (in particular, subdivide their property) without consulting with the Utilities, the services provided by the Utilities might not be available on completion of the improvements (and subdivision).

Comments:
No comments

Post Your Comment:

* indicates required fields.
Your Name: *
Please note, your email will not be shown publicly
Your Email (will not be published): *
Comment: *
Please type the text as it appears above:
  Real Estate Law

Information and insight into the Winnipeg and Manitoba real estate sector, and real estate law in Canada

  The Brown Papers

The late Edward (Ned) Brown practiced law in Manitoba for over 50 Years, this section is in honour of his contributions to Manitoba real estate law.

  Lenders & Borrowers

Current developments in finance in Manitoba