Implied acquisition of easements

When buying land, it will frequently be important to ascertain what the position is with regard to easements. In terms of discovering what easements the property is subject to, this should not present too many problems. The basic obligation imposed upon the vendor is to disclose in the contract all latent defects in his title (See Barnsley< Conveyancing Law and Practice (third edition) pp.148 to 153). Unle ss the existence of the easement is patent, as in Bowles v Round (1800) 5 Ves 508, or the purchaser knew of its existence prior to entering into the contract (see Timmins v Moreland Street Property Co [1958] Ch 110, 118), the vendor should reveal in the contract what easements the land is to be sold subject to.
On the other side of the coin, care should also be taken to ensure that the land to be bought has the benefit of easements that are required if the land is to be enjoyed to the full. This may be discovered by perusal of the deeds or the register, or by enquiries of, or negotiations with, neighbouring landowners.
In each of the two situations just referred to, the transactions involve a straightforward sale of land from vendor to purchaser and, provided a little care is taken, problems involving easements should not arise. Where difficulties can easily occur, however, is where the transaction involves a vendor selling off part of his land and retaining another part, either adjoining that which is to be sold, or in reasonable proximity thereto. In these circumstances, the vendor may need to exercise considerable care, if he is not either to leave himself without proper access to the retained land over that which is to be sold or, conversely, unwittingly granting easements over the retained land.
Selling off land
The dangers involved in a sell-off were highlighted once again recently in MRA Engineering v Trimster (1988) 56 P & CR 1. In 1967 the plaintiff purchased two plots of land, which were labelled red and green. There was a house on the red land but there was no access by road to it. To gain access to a road, use was made of a track running across the green land. The red land was then leased to a Mr Shaw for a determinable period of 90 years and he was granted a right of way across the green land. In 1975, the green land was sold and conveyed to the defendant subject to Mr Shaw's right of way. The transfer of the green land did not, however, contain any further reservation of a right of way. The defendant was also granted an option to purchase the red land. That option was exercisable on a number of events, one of which was the termination of Mr Shaw's tenancy. In 1982, Mr Shaw surrendered his tenancy and the defendant exercised his option to purchase the red land. The dispute which arose concerned the purchase price. The option itself did not specify a price but provided for it to be determined by a valuer if the parties could not agree. The bone of contention in assessing the price was whether or not the red land enjoyed a right of way over the green land, the difference between the value of the land with such an easement and the value of it without this right being several thousand pounds.
This dispute raised, in a somewhat novel setting, a not unfamiliar problem: what rights a vendor of land retains in the land which he has sold after it has been conveyed. In this case, what was in issue was whether the plaintiff had acquired an easement over the green land which he had sold to the defendant. The Court of Appeal held, unanimously reversing the decision of the county court judge, that he had not and so the value of the red land fell to be assessed without the value of a right of way across the green land.
Implied easement
At first instance, the judge had held that the initial grant of the easement to Mr Shaw had the effect of creating a 90-year easement appurtenant to the red land, that easement having an existence independent from the lease and continuing despite the determin ation of the lease. Not surprisingly, Dillon LJ found grave difficulty in following this reasoning, it not being easy to see how the grant of a right of way to a tenant could survive the termination of the lease. This ground for the decision was not supported on appeal; instead, it was argued, the plaintiff acquired an easement either owing to the operation of s.62 of the Law of Property Act 1925 or arising from necessity.
Under s62(2), a conveyance of land, having houses or other buildings thereon, shall be deemed to include all liberties, privileges, easements, rights and advantages whatsoever, appertaining or reputed to appertain to the land, houses or other buildings conveyed at the time of the conveyance. It was argued that when the red land was conveyed to the defendant, the tenant's right of way was reputed to appertain to the land. Consequently, it was contended, s.62(2) operated to transform that reputed right into an easement over the green land.
This argument was swiftly and correctly rejected and was based on a fundamental fallacy. S.62 of the Law of Property Act 1925 is a word saving provision; it does not cofer upon a grantor of land rights which he does not possess. Because, at the time when he conveyed the red land, the plaintiff did not own the green land, he clearly had no power to grant rights over it. Consequently, because the plaintiff was not a capable grantor, s.62 could not operate to transform any reputed rights into easements. As Nourse LJ pointed out (at p.7):
'It is an essential prerequisite, although sometimes overlooked, that, for either s.62 or the common law rule in Wheeldon v Burrows (1879) 12 Ch D 31 to operate, the vendor must retain land which is to become the servient tenement. In both cases, any implied grant od in favour of the purchaser and not the vendor.'
Easements of necessity
The difficulty facing the plaintiff in the instant case is that it is rare for an easement to be implied in favour of a grantor. This is based upon the principle that there should be no derogation from a grant. To this principle, there are two exceptions of which the only one which was relevant on the facts was the claim that there should be an implied easement of necessity over the green land. This argument also failed.For an easement of necessity to be acquired it is essential, as was stated in Union Lighterage Co v London Graving Dock Co [1902] 2 Ch 557 that the land would be unusable without it. If there is a right of access to the property, however inconvenient it may be (for a good example, see Titchmarsh v Royston Water Co (1899) 1 LT 673) there will be no implication of easement of necessity. In the instant case, after the green land had been sold, access to the red land was possible by way of public footpaths. Although it was highly inconvenient that there was no access to the red land by car, this alone was insufficient to cause an easement of necessity to be implied. The upshot was, therefore, that the red land did not enjoy the benefit of an easement over the green land.
Precautions
The decision in MRA Engineering Ltd v Trimster Co Ltd affords an excellent illustration of the dangers lurking for a vendor when selling off part of his land. In fact, things could have been worse in that the plaintiff's loss was purely financial. Had he retained the red land, rather than selling it ti the defendant, he would have been saddled with a property to which there was only adequate access, with all the distress and worry that that situation would entail (cf, Hayes v Dodds (1988) 138 NLJ 259.) Conversely, had it been the quasi-dominant plot that had been sold first, then the plaintiff would, quite possibly inknowingly, have created an easement over the retained land (see eg, Graham v Philcox [1984] QB 747). To avoid these consequences, the issue of easements must be dealt with in the contract.
It is not apparent from the report of MRA Engineering Ltd v Trimster Co Ltd whether either of the standard sets of conditions of sale had been used. Had this been the case, the result of the dispute may well have depended upon which set had been employed. Under general condition 20 of the 'National conditions of sale' (20th edition), where the property and any adjacent or neighbouring land have hitherto been in common ownership, the conveyance shall, if the vendor so requires, reserve to him such easements and rights as would become appurtenant to the retained land by implication of law, if the vendor had sold it to another purchaser at the same time as he has sold the property to the purchaser. General condition 5(3) of the Law Society's 'General conditions of sale' (1980 edition) is to similar effect, save that there is no stipulation that the vendor must expressly require easements to be reserved; under condition 5(3)(b) the conveyance shall contain such reservations in favour of the retained land as would have been implied had the vendor conveyed both the property and the retained land by simultaneous conveyances to different purchasers.
Simultaneous conveyances
To appreciate the effect that these conditions would have had to the case under discussion, one must consider the implication of easements when there are simultaneous conveyances by a common vendor. When a vendor sells two plots simultaneously, the purchaser of each plot will acquire the same easements over the other plot as he would have obtained had the vendor retained it. (See Swanborough v Coventry (1832) 2 Moo & Sc 362; Megarry and Wade, The Law of Real Property (fifth edition) pp.863 and 864.) Thus if, prior to the conveyance, there were in existence any continuous and apparent quasi-easements or the land was in occupation and the occupier had a licence over the other plot, the purchaser will acquire those rights as easements. Therefore, if either of the two standard conditions takes effect, the vendor will acquire for himself such rights against the purchaser.
The difference between the two sets of stadard conditions should, however, be noted. If the national conditions of sale are employed, then any easements to be reserved in this way must be required by the vendor. This clause is ambiguous, it does not make clear whether the vendor must require the reservation of an easement in the contract, or whether, after exchange of contracts, he can require the reservation to be inserted into the conveyance (see also Barnsley at p.166). As the normal rule is that there will only be an implied reservation in very limited situations, it is thought that, applying the contra proferentem rule, this ambiguity will be resolved against the vendor. This means that unless the required reservation is specified in the contract, the vendor cannot insist upon it later. In the instant case, therefore, had the contract been governed by the national conditions of sale, the result would have been the same.Conversely, had the Law Society's conditions been employed, the result should have been different. Condition 5(3) does not include any stipulation that the easement be required by the vendor. As in this c ase, it was both continuous and apparent and enjoyed by an occupier, the vendor would, under the contract, have been entitled to a reservation of a right of way. As the conveyance did not contain such a reservation, the plaintiff would, in principle, be entitled to rectification to give effect to his contractual entitlement.
Be explicit
It is obvious from a case such as MRA Engineering Ltd v Trimster Co Ltd that, unless the question of rights of way is explored fully before entry in a contract which involves a sale-off, serious difficulties may well ensue. Often the problem which occurs on a sale-off is the inadvertent grant of an easement over the retained land. The present case illustrates the reverse situation, when a vendor wrongly assumes that he will retain rights over the property to be sold. The only sure way of averting potential problems is to deal explicitly with these matters by way of special conditions in the contract of sale.This means, when acting for a vendor who is selling part of his land, specifically enquiring what easements he wishes to enjoy over the land to be sold and what easements he is willign to grant over the retained land and then expressly including them in the contract. A failure to do so may involve considerable difficulty in the future.