Easement Extinguishment by Merger and Lender Comments

The ALTA Survey I completed last week is owned by a company who purchased it in 1986 from a group of partnerships formed to individually own and finance different sections as they were constructed. As each section was constructed, cross easements were exchanged, providing for access to parking spaces, drives, and most importantly, the single swimming pool and clubhouse.

The property was sold to a common owner in 1986, the cross easements were excluded in the title policy and I did not mention them on the survey. Again, 1n 1999, the property was refinanced, and again the easements were excluded in the title policy and not mentioned by me on the survey.

Then comes 2006 and the newest refinance by the same owner. This time, I had become more knowledgeable of the extinguishment of easement by merger of dominant and servient estates. These properties were a true merger in that they were identical in every aspect of existence, having the same owner and financial arrangements.

I mentioned the fact of extinguishment to the attorney at Lawyers Title Insurance Company. Shortly thereafter, the lenders attorney notified both the title company and me that they wanted the beneficial interests of the easements included as appurtenances and included within the legal description.

Instead of solving a problem, it had become worse. I called the attorney, and while he agreed that the easements were extinguished, that it did no harm to include them within the legal description, especially since he was only providing it in the lenders policy. I pointed out that the inclusion did cause a problem, perhaps a huge legal liability to simply go along with a legal description which was describing worthless appurtenances. So, I called the lender’s counsel, and they indicated they wanted the cross easement documents included within the legal because they thought they ran with the land.

I explained that the easements had been extinguished and that they should check with senior counsel. I told them that I would place a notation on the plat that the cross easements and other agreements between the original managing partners had been extinguished and no longer existed. I also mentioned that a future split of the property would require the re-establishment of the easements to restore the former rights, but elected not to specifically mention it on the survey. After all, this was a survey, not a legal dissertation.

In essence, rights which didn’t exist were conveyed in the description, then eliminated by exceptions contained in the certification. All were happy and the loan closed.