How to create an easement on a NZ property

What is an "easement"?

An easement is a right that a New Zealand property owner has to some use of the (usually adjoining) property of another. Examples of easements include:

• a right of way (this is a right to pass over another person's land, such as a driveway)
• a right to lay pipes for water or sewage
• a right of access to light and air

This area has its own special terminology:

• The person who enjoys the easement over the other person's property is called the "dominant owner", and that person's land is called the "dominant tenement".
• The land subject to the easement is called the "servient tenement", and the owner of that land is referred to as the "servient owner".

On the granting of an easement the parties have the rights and obligations as set out in the Seventh Schedule of the LAND TRANSFER ACT 2017 For enforcement of easements, see How to enforce your rights under an easement.

"Legal" versus "equitable" easements

An easement may be binding either as a "legal" or "equitable" easement. A legal easement, which is the most common, is one that is registered on the legal title to the property over which the easement has effect. If an easement is not registered in this way, it is an equitable easement.

"Equity" is a system of law created by the courts that supplements strict legal rights with principles of fairness and justice. An equitable right is generally inferior to a legal right. In the area of easements, the distinction means that while a legal easement binds all subsequent owners, an equitable easement binds a subsequent owner only if he or she was aware of the easement at the time of the sale.

How are legal easements created?

A legal easement can be created by the owner of the property that is to be subject to the easement completing and registering a Memorandum of Transfer under the LAND TRANSFER ACT 2017. This is done through the local office of the Land Titles Service, which you can contact through the regional offices of Land Information New Zealand.

Alternatively, a legal easement to be created as part of a subdivision can be created by an Easement Certificate, which must be executed by both the servient owner and the dominant owner. These easements are registered on the title of the servient land and the dominant land. Creating the easements in this way avoids repetition of transactions. This method of creating easements does not apply to easements of access of light or air, nor to "easements in gross". An easement in gross is an easement that, unlike a normal easement, does not attach to any dominant tenement; examples are the right of public utilities, such as power, gas, phone, water and sewerage, to use part of the land.

A legal easement may also be created by a court order. This may be granted in situations of land-locked land or encroachment: see How to deal with landlocked land and How to deal with encroachment.

How are equitable easements created?

If you have an agreement with a neighbour for an easement to be granted, but the easement is not registered, you may have an equitable easement. For there to be an equitable easement the agreement must be an enforceable contract, which means that there must be:

• some valuable consideration in exchange for the granting of the easement, and
• some written memorandum of the contract or some sufficient act of part performance of the contract

An equitable easement may also be created in some cases where, although there is no contract:

• one party mistakenly believes that he or she has a legal right to an easement, and
• the other party is aware that the first party has this mistaken belief and encourages the first party (either directly or by omission) to expend money or do some other act on the basis of this mistaken belief

In this situation the easement is created on the basis of "proprietory estoppel", which means that the servient owner, who has knowingly allowed the other party to act as if an easement exists, is "estopped" (or barred) by the courts from arguing that no easement exists.

Essential elements for the creation of an easement

For the creation of an easement four essential elements must exist:

• There must be a servient tenement that is clearly defined.
• The easement must "accommodate" the dominant tenement, which means that the easement must confer some real and practical benefit on the dominant tenement in some way that is reasonably necessary for the better enjoyment of the dominant tenement.
• The dominant and servient land must be separately owned – in other words, you cannot have an easement over your own land.
• The subject-matter of an easement must be capable of being granted to the dominant owner; that is, the grantor and grantee of the right must be legally capable of granting it and receiving it, respectively, and the right granted must be sufficiently defined and certain.

Positive and negative easements

A right of way and a right to lay pipes are examples of "positive" easements, as they involve the right to use the other person's land in a particular manner.

By contrast, a right of access to light and air is an example of a "negative" easement, because it restricts the other person's freedom in using the land (in this case restricting the owner from building in a way that would interfere with light or air). The law is generally reluctant to grant negative easements, and the only types that have been recognised are access to light and air, a right of support of buildings, and certain water rights.

Variation of easements

The parties can agree between them to vary the easement by both of them executing and registering a Memorandum of Variation of Easement under the LAND TRANSFER ACT 2017. This is then noted on the Register in the same way as the original Memorandum of Transfer that created the easement. This is done through  Land Information New Zealand.

An easement can also be modified or extinguished by court order: see How to extinguish an easement.

Cautionary notes

• It is important that you take care to adequately define the easement that is to be created. An application for the creation of an easement may be rejected if it is considered not sufficiently precise.
• The creation or operation of easements are restricted by statutory provisions in certain circumstances. For this reason, and also because of the documents that must be lodged with the District Land Registrar to create an easement, it is strongly recommended that you seek the services of a conveyancing lawyer to ensure that all the necessary requirements are met and that your interests are adequately protected.
• The granting of an easement may be conditional on certain matters - for example, restrictions on the dimensions involved or conditions as to costs. If you are the dominant owner, there are provisions in the PROPERTY LAW ACT 2007 that may require you to contribute to the costs of construction, maintenance and repair.