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License or Easement?

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In a previous blog, I wrote about the differences between a license and a lease. As with the license v. lease scenario, simply labeling a document as a license or an easement does not necessarily mean that the document is as designated.

Generally, a license permits the licensee to use the licensor’s land for a specific purpose but confers only a personal privilege that cannot be assigned and is terminable at will. A license does not create an interest in land and cannot be conveyed to heirs or other third parties. Licenses are generally revocable or for a stated period of time. For example, when the U.S. Open Golf Tournament was played at Baltusrol Golf Club a few years back, some homeowners near the course allowed attendees to park on their property, giving them quicker access to the course. Thus, a license is simply a permit or privilege to do what would otherwise be considered an unlawful trespass.

An easement, on the other hand, is a nonpossessory interest in the land of another. This is an important distinction in that an easement is an “interest in land,” not a mere contract right. Easement rights, unlike licenses, travel with the land and are binding on subsequent landowners. Easements are also potentially irrevocable. Given the significance an easement can have on the property owner’s rights, express easements must be in writing. Licenses, on the other hand, may be and often are, in writing. Easement holders are also protected from interference by third parties whereas licensees generally are not. Because the easement holder’s interest is “nonpossessory,” the holder may use only the land burdened by the easement. For example, an access easement over another’s land would give the holder of the easement the right to use only the access area of the burdened property, not the entire parcel. Significantly, an easement holder, unlike a licensee, would be entitled to compensation for condemnation. Thus, if a governmental entity condemned a piece of land in which a licensee has a license, the licensee would not be entitled to compensation for the destruction of his license. An easement holder, on the other hand, would be entitled to compensation for the destruction of his easement.

Highlighting the distinctions between a license and an easement is one thing; determining which right has been created can be quite another. What it comes down to in every instance is the intent of the parties. Some factors courts will look to include:

  • How the right was created. For example, does it include words typically used in the conveyance of land?
  • The nature of the right created. Does the right pertain to a specific area of land? Does the holder have the right to maintain and or improve the land? These indicate an easement was intended.
  • Duration of the right.
  • Amount of consideration. Substantial consideration indicates an easement.
  • Reservation of the power to revoke. This right would indicate a license was intended.

Determining the intent of the parties is critical to distinguish between a license and an easement. The starting point is always the language of the document created between the parties.

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