What is an easement?
According to the Civil Code, an easement is a limited property right that allows a third party (or another property, in the case of a land easement) to use the property in a specific manner. This may include access through the plot, the use of utilities, or the installation of technical installations (e.g., power lines, fiber optic cables).
There are several types of easement:
- land easement – granted to the owner of another property (e.g. the right to pass through the plot in order to access one's own property).
- personal easement – granted to a specific person (e.g. the right to live in or use part of a building for life).
- transmission easement – the right for a company to use land in connection with technical infrastructure (e.g. power lines, optical fibre).
You can read more about limited property rights here: Real estate – limited property rights and the area of limited use
Does an easement reduce the value of the property?
An easement typically reduces the value of a property because it can restrict the freedom of use of the plot or premises , reducing its market attractiveness. For investors, this means, for example, the inability to develop part of the plot, the risk of conflict with neighbors, or the need to provide access to technical infrastructure.
In the case of a utility or right-of-way easement, restrictions on use may include the requirement to maintain a service lane, the impossibility of developing a specific portion of the plot, or an increased risk of neighbor disputes. All of these factors can influence the decision of a potential buyer or investor.
What determines how much the value of real estate decreases?
The decrease in property value may be determined by:
- the type of easement: e.g. personal (lifetime) may make the sale much more difficult;
- scope of the easement: the larger the area covered by the easement, the greater the decrease in value;
- property location: in the case of investment plots, easements may have a greater impact on value than in the case of recreational properties;
- the intended use of the property: if the property is to be used for development purposes and the easement hinders the implementation of the planned investment, its impact on the value will be greater;
- Possibility of terminating an easement: Sometimes it is possible to terminate an easement, for example, for a fee. The prospect of termination may reduce the negative impact of the easement on value.
Valuing a property encumbered by an easement requires the specialized knowledge of a real estate appraiser. They consider all of the above factors, analyze the market, and then determine the actual value.
How much does an easement reduce the value of a property?
The degree of reduction in the value of the property due to the easement may range from several to even several dozen percent , depending on the location, the planned purpose of the plot and the nature of the easement.
For example, if an easement prevents development or commercial use of part of the plot, the reduction can be significant. In the case of a personal easement (e.g., a lifelong residence), the investor must expect limited access to the premises, even for many years.
Example of an offer: plot with easement in Szczecin
A good example of a property with legal restrictions is the plot of land on Szybowcowa Street in Szczecin. It is encumbered with a utility easement, which does not affect its attractiveness from a technical or investment perspective. Details are available at: Offer: Szczecin, Szybowcowa Street
Properties encumbered with easements can be a good solution for investors who don't plan extensive development or are looking for land for, for example, photovoltaic infrastructure. Such plots can be found, among others, in Orange's real estate portfolio.
Summary:
Easements are a significant factor in assessing the investment potential of land. While they can influence its value, in some cases they merely constitute a formal restriction and do not hinder the implementation of economic plans. It is always worthwhile to analyze the conditions and possible development scenarios.
Answers to the most important questions regarding the sale of real estate offered by Orange can be found in the FAQ | Orange Nieruchomości tab.
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