Compensation for granting easement

I think my question got buried in my other thread, so I'll ask it again here. Has anyone had experience with approaching a neighbour for an easement through their property to run services such as sewerage or stormwater drains. How much compensation is generally needed to gain their permission? I realise that this could be a "How long is a piece of string?"-type question, so failing that, how much have you had to pay in compensation to gain an easement through a neighbour's property for development?
 
Sorry, I would not allow an easement over my land for any money. It is far more difficult to sell a property with an easement than one without.
Marg
 
Even when it's along the back boundary where you are unlikely to be allowed to build anyway because of setback allowances?
 
Even when it's along the back boundary where you are unlikely to be allowed to build anyway because of setback allowances?

Hi Brendio,

Plenty of easements in my neighbourhood and doesn't seem to affect values. As you say, they are all mainly in the setbacks where you can't build anything. I have a friend who just asked 2 neighbours for permission to create a stormwater easement along their back boundary. Both not only allowed the easement but also didn't ask for any money. So it doesn't hurt to ask - that's for sure.

Good luck, :)
 
I have been able to obtain an Easement from a neighbour.

To me it was not what is a fair amount of compensation to me it was.

How much is this Easement worth to me?
Will they agree to an Easement?
How much do they want for the Easement?

In my case I had drainage issues an Easement would solve all of my problems and allowed me to go from building a single dwelling to a duplex (and the choice of a unit complex). So for me is was worth a lot.

In my case I only had 2 neighbours from where it was possible to put an Easement in.

I went to council advised I was looking at upgrading the fence line and would need to get in contact with the land owners. The council first confirmed I was the owner than gave me both postal address and names of the neighbours both were investment houses.

I sent a letter to the first neighbour and after he spoke with council with what was involved in an Easement he said yes and we both had agreed on an amount $ 2k and I would pay all expenses including his solicitor to review the contract for the Easement.

I made a mistake with my offer to the first neighbour in by offering to pay his solicitor's cost I had basically hired a guy to fight for my neighbours best interest that i was to pick up the tab for. Well naturally when the solicitor became involved the $ 2 K was not enough as well all communication had to be in the form of a letter which mean it dragged out for a couple of months. It ended when I mentioned to my neighbour that I felt his solicitor was just running up his bill and that in the contract I was bound to the payment however seeing as he has not actually signed the agreement I was not bound to the payment no more than he was bound to his original verbal offer to provide the Easement.
Lesson learned.

Neighbour no2. Much better approach this time. I asked if he would consider an Easement which he did and would look at compensation. In this case he did not want money but an upgrade to his house. We agreed on a carport (cost came in a $2500). My offer was very clear I provide the carport he will need to sign the document giving permission for the Easement, he was welcome to have whoever he liked reveiw the paperwork but that cost was on his own back. I would pay any of his bank fees for giving the consent to the Easement and I would foot the bill for all costs in putting in the stormater pipe.

This had the desired happy outcome for both parties I had an Easement neighbour has a new carport. This I would class as a cheap Easement I have heard of Easements around my area of closer to the 5 K - 10 K and is about what I was prepared to pay.


Cheers,

Fourex.
 
Thanks for the reply Fourex (and Rockstar too).

Lots of good info there. Agree with you that you need to work out what the easement is worth to you in terms of what it would save you relative to your next cheapest alternative and such that your development is still feasible (if they want too much for an easement, you need to know your alternatives).

Was your discussion with the second neighbour also by letter? I only have an address for one of our neighbours and I hope it doesn't drag out as it could if everything has to be done by mail. I am at the stage of having written the letter and have it ready to send. Compensation will be both cash in in kind (e.g. new fence without charging them half). Would be nice to speak with them to find out what in-kind compensation they would want. For example, we will have to remove some trees from their yard. We could offer replacement trees or extra cash in lieu.
 
The first contact was made by letter to each of them.

In both cases they came back to me via phone. It was only when it went to the first neighbours solicitor that it went to letters only (I guessed he gets to charge more for letters than a simple 5 min phone call).

I was able to get hold of a number for both neighbours from the internet which I was going to make contact via if no response was back after 2 weeks of sending the letters.

I tried to make my offer as simple as possible for them. You sign paperwork I take care of all costs (except solicitors fees). My Easement has been registered with DERM however I am yet to use it.

When I do go to put the pipe in place as part of the agreement I too need to remove a couple of small trees as well as upgrade part of the fence. My development proposal to council will require me to do this so I could imply that he is getting a better fence for no cost but if he is on the ball he might have been informed by council that I was required to do that as part of my building application.

I wasted a good 3 months on the first neighbour before I decided to give up on him.

The second neighbour it would have been a good 8 weeks from start to finish to get the Easement paperwork into DERM.

1 wk letter
2 wk for him to check whats involved and for me to raise paperwork
2 wk to get paperwork back signed
1 wk to get consent back from his bank
2 wk to submit documents to DERM and have approved

With my letter I placed an offer of compensation as a starting point to give them what I thought was fair amount to start off with and leave me with some room to move if needed.

I did not want to leave it with, How much do you want? I did not want them thinking I had an open chequebook and going anywhere near $ 10 K. For this reason I offered
$ 2 K up front. I wanted them to consider it along the lines of what I wanted to pay and thought it was a fair offer.

Good luck,

Fourex.
 
Thanks again. Your post has highlighted that the formal process is slightly more involved that I first imagined.

I have only found out from our engineer that we need consent from the neighbours. I have not spoken directly with council about the form it would take. I was thinking that we would hold off the compensation until the works are completed to ensure their continued cooperation, but I did wonder what would happen if the neighbours sold in the meantime and we then had to deal with new neighbours. I was imagining that we would put the sewer in place and then the easement would be placed on it. It also did not occur to me that the bank's consent would be required (if applicable). However, you have set up the easement but not yet used it, which may be the way for us to go too. Do the terms of the easement then allow you access to their property to construct the infrastructure for which it was created, even if the property is later sold and you are dealing with new neighbours? I guess I need to talk to DERM about the process about creating the easement and how it all works.

I sent out one letter today by registered post and hand delivered another and spoke with the owners of the other property, who live nearby. This owner went to school with my father and has verbally given us the go ahead. I need to find out what documentation we need at this stage. (We are currently preparing the DA application, but the actual civil works are still a while off.) Only the corner of this property is affected, where there is currently a man hole. We may have been able to get away with no compensation, because the owners are known to the family, but we offered $500 as a gesture of goodwill. They will be happy about us having to remove the other neighbour's tree, because it has got into the sewer and has caused problems in one of the units.

In the letter to the other neighbour, which will require the sewer across the entire width, we have offered $2000 as a start, plus a new fence (which will be required by council anyway, but is still a benefit to the neighbour not to have to fund half).
 
I have not spoken directly with council about the form it would take. I was thinking that we would hold off the compensation until the works are completed to ensure their continued cooperation, but I did wonder what would happen if the neighbours sold in the meantime and we then had to deal with new neighbours.

The new neighbours will not be bound to you in any way if you do not have a written agreement in place with the current neighbour. I would suggest a contract in place binding both parties to each other, them to you to provide the easement if your application is successful and you to them to provide payment of compensation.

I was imagining that we would put the sewer in place and then the easement would be placed on it.


Council will want to know how you intend to access the property and have permission to put in the sewer pipe if you do not have an easement in place. You will most likely find you will need to have the easement first or at the very least written permission for council to approve your application for the building permit to them put in the sewer pipe.

It also did not occur to me that the bank's consent would be required (if applicable).

Any party that has a vested interest in their land will need to give you consent (all owners and their bank if they own it outright then only the owners consent will be needed).

Do the terms of the easement then allow you access to their property to construct the infrastructure for which it was created, even if the property is later sold and you are dealing with new neighbours? I guess I need to talk to DERM about the process about creating the easement and how it all works.

An easement is a right of access. If you have the easement in place and the property is sold the easement will not change and the new owner will be bound to it as well.

I need to find out what documentation we need at this stage. (We are currently preparing the DA application, but the actual civil works are still a while off.)

I would touch base with your solicitor, council and DERM so you have a good understanding of what you are up for.

In my case I knew I needed the easement to have the DA application approved. I did not want to leave it with a verbal o.k. from the neighbours submit my application only down the track have them either change their minds or sell the property and leave me out of pocket for all the charges to get to that point. My solicitor suggested to options a: Have the neighbour sign an agreement that if my application was successful they would provide the easement or b: Put the easement in first, I went with option b:.

Sounds like you need to have more than one easement in place?
You may need to have a surveyor do up your plans and survey the blocks for the plans to show your easement with what you will show council and submit to DERM with have you sourced an estimate on those costs? You may need to factor those in when you consider your compensation amount.

Cheers,

Fourex.
 
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