Cost of easement

[see_change]

A friend asked me for advise .

They have a house within walking distance to a north shore station . Next door is zone for town houses . They are not .

Some one has taken an option on the house next door and is putting in an application for town houses , but need an easement though my friends front yard to do this .

They have offered them 25 k for the easement , plus make good any damage done.

Friends house would be worth in low 1 mills .

My thoughts are a town house development next door would impact the value of their property so it's not in their intersect for the development to go ahead .

The easement will also potentially impact the vale of the property and may impact the ability to develop the block further down the line .

I've advised them to talk to a local agent ( who we know and trust ) on what would be the dollar value impact on their property of giving the option.

I'd also advised them to talk to a local company who do development applications on what would be the commercial value of the easement and how it might impact their ability to redevelop their own block down the line.

I also raised the possibility that if the next door block needs the easement to develop the block and the current option expires , could they explore the possibility of getting an option and then either on selling with development approval / the easement in place or getting partners in to do the development.

Does anyone have any thoughts / advice ?

Cliff

 

[neK]

I think $25k is a pretty crappy price.

Town house next to house... not good for value
Easement through the property, not good for value

I think this is a losing situation. Maybe if they gave me ONE of the townhouses I would agree to it

 

[Jake D]

What services will the easement be providing to the townhouse site, and why arent' they already there? Sewer/ Drainage/ data cable/ etc?

Will the provision of these services improve the connectivity for your friend at all?

 

[devank]

We built a house in Homebush. We approached our backyard neighbours and offered I believe 40K. It was refused. Then we built detention tank and absorption pits which all costed about 40K.

May be find out how much it is going to cost them if they don't get the easement. If it is say 90K then ask 80K!

 

[see_change]

Can't recall whether it was drainage or sewerage .

If its drainage , Ku-ring-gai have fairly strict regulations of sorm water retention / drainage which would apply to any new developement .

also existing sewerage maynot be adequent for a multi unit development .

Cliff

 

[mflying]

it will come down to what developer is willing to pay and what your friend is willing to accept it.

or

it could be decided by LEC.

I have been thru this path and ended up NOT pursuing neighbors for an easement. Decided to spend $30k more for an alternative storm water design.

If developer needs storm-water easement.. they will work around there way (STCA)

If Developer needs sewerage easement, and proposing to run along boundary of the property (within a line of min setback).. they will have upper hand at LEC.


Either way 25K is way less money.. i will be asking money as per below formula:


(Valuer general land assessment vale/ Size of land) * SQ meter require for easement + 10-20% more.

 

[devank]

I think, in our case, it were required to approach our neighbors for easement assess. If they refuse then we were allowed any alternatives.

May be your friend should not reject outright. Instead say "I will provide easement access if $$$ is paid in compensation".

I would have paid 50K or more instead of having all those stuff we have under the ground now.

 

[Scott No Mates]

Get your mate to negotiate an option on his block as well.

 

[see_change]

Get your mate to negotiate an option on his block as well.

My understanding is their block is not zoned for town houses ....

If they want to negotiate , my thoughts would be to go back and say .

" when you come up with a realistic offer , we're happy to talk "

Cliff

 

[belvoir]

My understanding is their block is not zoned for town houses ....

If they want to negotiate , my thoughts would be to go back and say .

" when you come up with a realistic offer , we're happy to talk "

Cliff

How many townhouses are we talking about.

If its two or three I would consider the offer, if its 10+ then I would push it.

It won't de-value the house because your friends can't develop more than a house, it would only de-value if it were to stop you from building in the future.

Tread carefully, don't **** the developer off, they can be a nightmare during the construction process and make your life hell using a jack hammer for no reason at 7am every morning just to **** you off, I've see this before.

The key I guess is to find out how badly they need this easement.

 

[marg4000]

Their initial offer will be well below true value, "just in case". The amount they are prepared to pay will be well above this. If you do decide to grant the easement, get good legal advice (as to possible future issues) and bargain hard.
Marg

 

[see_change]

Follow up

Friend talked to local advisor (our recommendation ) who is handling the negotiations with the developer on a commercial basis and everything seems to be working well.

Developer is happy that things are being handled " professionally " and not by " a cousin who is a clerk in the town planning dept "

Because the site next door is zoned for developement , if our friend refused easement , the developer can take them to court and have an easement enforced ( though they would still have to pay compensation ) . No one wants that.

Cliff

 

[alicudi]

Hi

I wonder if you don't accept the developer's offer if the developer can then apply for an implied easement through the legal avenues and you get no financial reward?

Check out this link: http://www.wisegeek.com/what-is-an-implied-easement.htm#didyouknowout

My guess is if the developer has town planning approval they already have other pre-arranged and possible ways of completing the development without using an easement through your property or else this would have been required and finalised before town planning approval was given to the developer.

Regards,

alicudi

 

[see_change]

Hi

I wonder if you don't accept the developer's offer if the developer can then apply for an implied easement through the legal avenues and you get no financial reward?

Check out this link: http://www.wisegeek.com/what-is-an-implied-easement.htm#didyouknowout

My guess is if the developer has town planning approval they already have other pre-arranged and possible ways of completing the development without using an easement through your property or else this would have been required and finalised before town planning approval was given to the developer.

Regards,

alicudi

Not my property . The DA is at early stage and hasn't been submitted as of yet . The Developer hasan option.

My friends advisor has seen the site and has said the only way the development can work is with the easement ( it's storm water ) due to thefall of the land etc .

They are working towards an agreement .

Cliff

 

[alicudi]

Hi

Ok it seems that sea_change's friend has the upper hand in this matter then. I would be asking for a lot more than the current offer but of course making sure that the proposed placement of the easement doesn't create any future issues.

I am very interested in finding out the outcome in the end for this matter, best of luck.

regards,

alicudi