EASEMENT RELOCATION ACT Ashley Binns, Division of Legislative Services Presentation to the Virginia Uniform Law Commission June 27, 2019 2

PRESENTATION OVERVIEW

• Background • Summary of the Act • Section by Section Overview (§§ 2 – 10) • Current Virginia Law • Major Differences: The Act vs. Virginia Law • Recommendation • Questions 3

BACKGROUND

• Process to draft a uniform act addressing easement relocation began in October 2011 • Split between states on how to approach relocation of an easement • Common Law (mutual consent) • Balance of the equities approach (if relocation is modest or there’s acquiescence from owner) • Restatement, Third § 4.8(3) – unilateral relocation under certain circumstances (three-part test) 4

THE ACT, SUMMARIZED • 14 Sections • § 1. Short Title • §§ 2 – 10: substantive material • §§ 11 – 14: procedural portions of the Act related to enactment, application, effective date, etc. • Expansion of the Restatement approach to easement relocation • Clarifies scope of easements eligible for relocation • Gives courts guidance in resolving disputes regarding easement relocation • Imposes notice requirements • Establishes procedural safeguards • Outlines which party is responsible for any costs involved • Addresses other additional issues (e.g., the effect of an easement relocation on mortgage holders) 5

EASEMENT RELOCATION ACT SECTION BY SECTION OVERVIEW §§ 2 - 10 6

§ 2. DEFINITIONS.

• Key terms based on definitions used in the Restatement • “Easement” • “Dominant estate” • “Servient estate” • “Easement holder” • Other incidental terms based on definitions used in other uniform acts 7 § 3. SCOPE, APPLICABILITY, AND EXCLUSION.

• Scope & Applicability • The Act applies to non-exempt affirmative easements, regardless of how they are created. • The Act applies prospectively and retroactively. • The Act applies to an easement eligible for relocation under § 4.

• Exclusions • Conservation Easements • Public Utility Easements • Negative Easements 8 § 4. RIGHT OF OWNER OF SERVIENT ESTATE TO RELOCATE EASEMENT.

• Six-part test  The owner of a servient estate may relocate an easement to permit use, enjoyment, or development of the servient estate only if the relocation does not materially: 1) Lessen the utility of the easement; 2) Frustrate the purpose for which the easement was created; 3) Impair the safety of the easement holder or others entitled to use the easement; 4) Impair a real-property interest of a security interest holder entitled to notice (§ 5) who objects to the relocation; 5) Disrupt the enjoyment of the easement unless the disruption will be substantially mitigated; or 6) Increase, upon completion of the relocation, the burden on the easement holder in its reasonable use and enjoyment of the easement 9

§ 4., cont.

• The right of relocation may not be excluded or restricted by agreement 10 § 5. NOTICE OF INTENT TO RELOCATE EASEMENT.

• Notice of a request to relocate an easement must be given to • The easement holder and • Each security-interest holder having an interest in the servient estate

• The Act provides for two alternatives for notice 11

§ 5., cont.

• Alternative A (taken from other uniform acts) • Notice must include… 1) A statement of the servient owner’s intention to seek relocation and the nature, extent, location, and anticipated dates of commencement and completion; 2) A report providing title evidence of the servient and dominant estates; 3) A statement explaining why the easement at issue is the type of easement to which this Act applies; and 4) A statement of why the proposed relocation meets the criteria in the six-part test laid out in § 4. • Alternative B • Allows states to require methods of service of process utilized for a declaratory judgment action in the state (Code of Virginia, Title 8.01, Chapter 8) 12 § 6. PROCEDURE FOR NON- CONSENSUAL RELOCATION.

• 60 day notice period • If an easement holder’s identity is unknown or if a known easement holder fails to respond within the 60-day notice period, the court is tasked with determining whether an easement is eligible for relocation. • If no consent is reached, the servient estate owner is required to record a document providing the details of the relocation. 13 § 7. COSTS AND EXPENSES OF RELOCATION CHARGEABLE TO OWNER OF SERVIENT ESTATE. • All costs associated with relocating an easement must be borne by the owner of the servient estate. • Construction • Mitigation of temporary disruption • Permits/government approvals • Preparing/recording written document • Title report • Any title insurance costs 14 § 8. DUTY TO COOPERATE IN GOOD FAITH; DUTY TO MITIGATE.

• A duty to act in good faith and mitigate any disruption is imposed on both the owner of the servient estate and the easement holder. 15 § 9. RELOCATION OF EASEMENT BY CONSENT.

• May still relocate an easement by mutual consent • Without regard to provisions of the Act or • With the agreement that only certain provisions of the Act will apply • If relocating an easement by mutual consent, both parties required to execute and record a document reflecting the new location of the easement 16 § 10. CHARACTERIZATION OF RELOCATION OF EASEMENT.

• The relocation of an easement will not negatively affect a security-interest holder’s collateral (dominant estate). • Clarifies that an easement relocation cannot be characterized as an event triggering a default or a due-on-sale clause. 17

VIRGINIA LAW • Code of Virginia § 55-50 • Servient owner may relocate an easement for ingress/egress on the servient estate by: 1. Recording in the clerk’s office or the circuit court of the city/county where any part of the easement is located, a written agreement evidencing mutual consent by all parties affected and setting forth the new location of the easement; OR 2. If there is no mutual consent, the servient owner may seek relocation by petitioning the court and giving notice to all interested parties. The petition shall be granted if, after a hearing, the court finds that i. Relocation won’t result in economic damage to the parties in interest; ii. There will be no undue hardship created by the relocation; and iii. The easement has been in existence for not less than 10 years. 18

VIRGINIA LAW, cont.

• Common Law • Mutual consent • Eureka Land Co. v. Watts, 119 Va. 506 (1916) • Fairfax County Park Auth. V. Atkisson, 248 Va. 142 (1994)

• Consent may express or implied • Wagoner v. Jack’s Creek Coal Corp., 199 Va. 741 (1958) 19

MAJOR DIFFERENCES

The Act Virginia Law • Favors the rights of the servient estate • Favors the rights of the easement owner while acknowledging the property rights of the easement holder holder • Builds off the Restatement rule & • Tracks common law, BUT allows for creates a more utilitarian approach to unilateral easement relocation for easement relocation ingress and egress easements if • Applies to all non-exempt affirmative certain conditions are met easements, no matter how created • Applies ONLY to easements for • If there is no mutual consent, the Act ingress and egress allows the court to make the determination if a particular easement • § 55-50 last amended in 1992 is subject to relocation 20

RECOMMENDATION

• The current law in Virginia, while it has its benefits, is antiquated and one-sided. • The Act outlines a much more detailed approach that should prove to be fair to all parties involved. 21

QUESTIONS?