Purchasing commercial property involves far more than agreeing on a price and signing a purchase agreement. One issue that catches many buyers and investors off guard is the presence of an easement on the property. Whether you’re acquiring a retail building in Fargo, an office complex in the Minnesota Lakes Area, or an industrial site in Wisconsin, understanding how easements work — and how they can affect your ownership rights — is essential before you close the deal.
What Is an Easement in Commercial Real Estate?
An easement is a legal right that allows someone other than the property owner to use a portion of the land for a specific purpose. This could include a utility company running power lines across a lot, a neighboring business sharing a driveway, or a municipality maintaining a drainage system underground. Easements don’t transfer ownership, but they do limit how a property can be used, which makes them a critical part of any commercial property closing.
For a deeper breakdown of how easements interact with property titles in general, see our guide on what an easement is and how it affects your property title.
Common Types of Easements Affecting Commercial Properties
Not all easements carry the same weight or risk. Some are minor and won’t interfere with your plans, while others can significantly restrict development or expansion. Common categories include:
- Utility easements – granted to power, gas, water, or telecom companies to install and maintain infrastructure
- Access easements – allow a neighboring property or the public to cross a portion of the land for ingress and egress
- Drainage easements – permit stormwater or municipal drainage systems to run through the property
- Conservation easements – restrict development to preserve natural or agricultural land
- Prescriptive easements – created through long-term, continuous use of land without the owner’s formal permission
- Easements in gross – benefit a specific individual or company rather than a neighboring parcel
Why Easements Matter for Buyers and Investors
Buying land or a building with an unresolved or poorly documented easement can create real headaches down the line. An easement might block a planned addition, restrict signage, or require you to grant continued access to a party you never agreed to work with. This is especially important for investors purchasing property across state lines, since easement laws and recording requirements can vary. Our clients working across North Dakota, Minnesota, and Wisconsin often find that regional differences in title practices make local expertise essential — something we cover in more detail in our comparison of title differences between Minnesota and North Dakota.
Investors evaluating multiple properties should also understand how commercial title review differs from residential transactions, since easement issues tend to be more complex on larger, multi-use commercial parcels.
How Easements Are Discovered During Due Diligence
Easements are typically identified through a title search, a review of recorded documents, and a current property survey. This is one of the many reasons due diligence in commercial closings is so important — an easement that isn’t caught before closing can become a costly surprise afterward. A qualified title company will cross-reference the legal description, plat maps, and public records to confirm exactly what rights exist on the property and who holds them.
| Discovery Method | What It Reveals |
|---|---|
| Title Search | Recorded easements, liens, and encumbrances tied to the property |
| Property Survey | Physical location and boundaries of the easement on the land |
| Municipal Records | Utility, drainage, or right-of-way agreements with local government |
| Prior Deeds | Historical grants of access or use rights to third parties |
Easement Disputes and How They Can Delay Closing
Disagreements over easement boundaries, scope of use, or maintenance responsibility are more common than many buyers expect. A neighboring business might claim broader access rights than what’s recorded, or a utility company’s easement may not match the current survey. These conflicts can stall a transaction if they aren’t addressed early.
Protecting Your Investment With Title Insurance
Title insurance is one of the strongest tools available to protect against easement-related surprises. A commercial title insurance policy can cover losses tied to undisclosed easements, boundary disputes, or errors in the public record that weren’t caught during the initial search. Because commercial real estate easements can carry significant financial consequences — from reduced usable square footage to blocked expansion plans — securing the right coverage before closing is not optional for serious investors. Learn more about how title insurance protects your property investment.
Steps to Take Before Closing on a Property With an Easement
Before finalizing any commercial purchase, buyers and investors should take a few proactive steps:
- Order a full title search and an updated ALTA/NSPS survey
- Review every recorded easement and confirm its exact location and purpose
- Ask the seller for any correspondence related to easement disputes or maintenance obligations
- Consult with a title company familiar with local recording practices in your state
- Confirm that your intended use of the property won’t conflict with existing easement rights
- Secure a commercial title insurance policy that specifically addresses easement risk
Serving Buyers and Investors Across North Dakota, Minnesota, and Wisconsin
Secure Title Company assists commercial buyers and investors throughout the region, including North Dakota communities like Horace, Cass County, and North Fargo, as well as Minnesota’s Lakes Area, Detroit Lakes, and Clay County. Wherever your commercial property is located, our team can help identify and resolve commercial real estate easements before they become a problem at the closing table.
Frequently Asked Questions
1. Can an easement be removed from a commercial property?
In some cases, yes. Easements can be released, abandoned through non-use, or terminated by agreement between the parties, but this typically requires legal documentation and recording with the county.
2. Does an easement transfer to a new owner when a property is sold?
Most easements “run with the land,” meaning they remain in effect regardless of who owns the property, unless the easement was specifically granted to a person rather than the land itself.
3. Who is responsible for maintaining an easement area?
Responsibility depends on the terms of the easement agreement. Utility easements are usually maintained by the utility company, while shared access easements may require cost-sharing between property owners.
4. Can title insurance cover losses from an undisclosed easement?
Yes, in many cases a commercial title insurance policy will cover financial losses resulting from an easement that wasn’t disclosed during the title search, subject to the policy’s terms.
5. How can I find out if a commercial property has an easement before making an offer?
A preliminary title search or a review of county property records can often reveal recorded easements before you’re under contract, though a full search during due diligence is still recommended.
6. Do easements affect property value?
They can. An easement that restricts development, access, or usable space may lower a property’s market value or limit its future resale potential.
Contact Us
If you’re buying or investing in commercial property and want to make sure easements and other title issues are properly addressed before closing, Secure Title Company is here to help.
Phone: (701) 660-5887
Email: info@securetitlecompany.com