Easements deed creation….

[NotCranky]

Here is a topic I believe SDR has not seen for at least a week.

I am creating three Grant deeds for private easement access to to a lot. Everything is fine and all parties are ready to go to the notary.
One servient tenement of the three has a pending construction loan and apparently it is difficult to get a subordination agreement from the lender until the house is finished.

This is intended to create the “legal access” to the property which also has “prescriptive” easements from another direction.

My Questions are:
What effect will the lack of a subordination agreement have on appraisal, borrowing against the property, selling it,or developing it? Any other important issue I have not mentioned?

My title company says I will have a perfect easement if the servient tenement ever sells or refinances as there will be no longer a need for a subordination agreement.

Anyone with knowlege of any ramification of having the easement without the “subordination agreemment” please add your comments.

Any responses greatly appreciated.

[NYer]

DISCLAIMER: Although I am a lawyer, I am not yet licensed to practice law in California. The following is not legal advice and is not intended to create any attorney-client relationship. For actual legal advice, please see a real-estate lawyer licensed to practice in California.

Under general principles, your title company is correct. Once there is a sale or a refinance, the mortgage that precedes (and therefore has priority over) the easement will be extinguished and all future takers by grant or mortgage will take subject to the easement.

Thus, I would see no issues w/r/t the servient tenement. However, I would not be too happy if I had the dominant tenement because if the mortgage at issue ever forecloses then arguably the easement would be extinguished. I say “arguably” because it depends on multiple factors, not all of which I can be sure I remember off the top of my head.

[NYer]

DISCLAIMER: Although I am a lawyer, I am not yet licensed to practice law in California. The following is not legal advice and is not intended to create any attorney-client relationship. For actual legal advice, please see a real-estate lawyer licensed to practice in California.

Under general principles, your title company is correct. Once there is a sale or a refinance, the mortgage that precedes (and therefore has priority over) the easement will be extinguished and all future takers by grant or mortgage will take subject to the easement.

Thus, I would see no issues w/r/t the servient tenement. However, I would not be too happy if I had the dominant tenement because if the mortgage at issue ever forecloses then arguably the easement would be extinguished. I say “arguably” because it depends on multiple factors, not all of which I can be sure I remember off the top of my head.

[NotCranky]

Thank you for responding NYer. Sorry you have to make a disclaimer like that to do a good deed.

You did bring up another question that I hadn’t thought of and that is what would happen to the easement in the case of foreclosure? Now I can investigate that.

The easement is a insignificant portion of a 9 acre parcel which was deeded in favor of several other parcels prior to the deed of trust for the construction loan. The area is to be zoned 10 acres minimums if the 2020 plan ever gets fully put in effect. I am told that it will be in a few years. I tell you that because it is the reason I think that no person or institution is going to see fit to go to much trouble to extinguish the easement. If for some reason the easement were extinguished, I believe a new owner would accept compensation to grant the easement again.(Not that It would be fun to have to go that route)

The financial risk on my part(dominent tenement) is not large. We have access from another point. So I am going to do it even with the risk you have explained. The benefit of the easement is that it meets developement requirements. It is more important to me than perfecting the other prescriptive easement which is too narrow for developement and includes much more distance and many more owners.

I am still curious as how buyers,lenders, appraisers, the planning dept., would be affected by the exclusion on my title policy if I sold, borrowed or wanted to develope the property via a tentative parcel map(lot split). I guess this reponse will give it one more chance for other poster to reply. If no one can answer I can ring some contacts. I know this is a pretty complex situation even for this high level blog.

Thanks again

[NotCranky]

Thank you for responding NYer. Sorry you have to make a disclaimer like that to do a good deed.

You did bring up another question that I hadn’t thought of and that is what would happen to the easement in the case of foreclosure? Now I can investigate that.

The easement is a insignificant portion of a 9 acre parcel which was deeded in favor of several other parcels prior to the deed of trust for the construction loan. The area is to be zoned 10 acres minimums if the 2020 plan ever gets fully put in effect. I am told that it will be in a few years. I tell you that because it is the reason I think that no person or institution is going to see fit to go to much trouble to extinguish the easement. If for some reason the easement were extinguished, I believe a new owner would accept compensation to grant the easement again.(Not that It would be fun to have to go that route)

The financial risk on my part(dominent tenement) is not large. We have access from another point. So I am going to do it even with the risk you have explained. The benefit of the easement is that it meets developement requirements. It is more important to me than perfecting the other prescriptive easement which is too narrow for developement and includes much more distance and many more owners.

I am still curious as how buyers,lenders, appraisers, the planning dept., would be affected by the exclusion on my title policy if I sold, borrowed or wanted to develope the property via a tentative parcel map(lot split). I guess this reponse will give it one more chance for other poster to reply. If no one can answer I can ring some contacts. I know this is a pretty complex situation even for this high level blog.

Thanks again

[Author]

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