In terms of value, easements of access need not be comprised only of a component corresponding to the right of use of land over which access is provided. In fact, the holder of the easement uses not only the land to access his property, but mainly the road built on the land. Is the use of a road regularly reflected in the value of the easement?
As a standard, the value of an easement of access (regardless of whether it is a one-off payment or has the form of regular payments (monthly, quarterly or annual)) is comprised of the right to use land. From the perspective of easement valuation, it is not entirely usual that the value, i.e. the actual payment to and income for the servient landowner, would include a component related to the use of a road built on the land. It is basically an amount relating to the reasonable costs of:
- Road preservation; and
- Road repair.
However, by investing in the preservation of a road, the owners would ensure that the road exists permanently. Accordingly, costs of road repairs ensure that the road is in a condition free of any defect for future users. At the same time, we should point out that the road is normally used both by the holder of the easement and the servient landowner. Therefore, it is in their mutual interest to keep the road free of any defects throughout the period of use.
The benefits generated from the two-component structure of the value of an easement of access are the following:
- Both value components of the easement are reflected logically (i.e. the use of the land and the use of the access road)
- The value of the easement is set fairly for both parties (the easement holder and the servient landowner) based on proposed rules of land and road use approved by the parties in advance, without any “surprise” for either of the parties
- Permanent quality, maintenance and smooth operation of the access road including road markings and other accessories are ensured.
Where RSM TACOMA can help
The Valuation Institute of RSM TACOMA has extensive experience with valuing real estate, including related easements. We have calculated to our clients’ satisfaction the consideration for providing or suffering access to or over their land by means of easements.
We would be happy to discuss these issues with you.