The Michigan Supreme Court recently rejected a Court of Appeals decision that threatened to completely obviate long-standing precedent with respect to the law of prescriptive easements and their transferability to subsequent owners.
A prescriptive easement is a property right that arises when one party uses another party’s land in an open, notorious, adverse and continuous manner for a period of at least 15 years. For example, if Bob and Tim are neighbors, and Tim uses Bob’s driveway to access Tim’s property, and does so in an open, notorious, adverse and continuous manner for a period of at least 15 years, then Tim will acquire a prescriptive easement over Bob’s driveway. But what happens if Tim, after acquiring the prescriptive easement over Bob’s driveway, then sells his property to Phil? Does Phil, as the new owner of the property formerly owned by Tim, also have a prescriptive easement over Bob’s driveway? The Court of Appeals, ignoring years of established precedent, answered “no” to this question in Marlette Auto Wash, LLC v. Van Dyke SC Properties, LLC.
In Marlette, the Plaintiff (Phil in the above example) purchased an existing car wash business and underlying real estate from a creditor who had obtained ownership through foreclosure. Customers accessed the car wash by one of two access points - either from the adjacent highway or through the adjacent shopping center’s parking lot, owned by the Defendant (Bob in the above example).
Due to the alleged heavy use of the parking lot by car wash customers, the Defendant requested that the Plaintiff pay a portion of the parking lot’s maintenance and insurance costs. The Plaintiff refused, and instead filed a lawsuit claiming a prescriptive easement over that portion of the parking lot. The trial court ruled that (i) the car wash’s prior owners (Tim in the above example) had used the parking lot in an adverse and continuous manner for at least 15 years, (ii) as a result of such adverse use, the car wash property benefitted from a prescriptive easement to access the car wash from the shopping center’s parking lot, and (iii) the prescriptive easement runs with the land, meaning it passes to the car wash property’s subsequent owners.
The Defendant appealed, arguing that, although a prescriptive easement may have vested in the car wash’s prior owners, the Plaintiff’s period of adverse use of the parking lot was far less than the statutory 15-year period, and further, the Plaintiff lacked the necessary privity of estate with the prior owners in order to tack on their period of adverse use. The Court of Appeals agreed, noting that there was there was no description of the disputed parking lot area in the deed conveying title to the Plaintiff, nor was there any other clear evidence of intent to convey a prescriptive easement over the parking lot along with the conveyance of title to the car wash. The Court of Appeals’ decision requiring privity was a new interpretation of the law of prescriptive easements that ran contrary to well-established precedent. The Plaintiff appealed to the Michigan Supreme Court.
The Supreme Court reversed the decision, holding that the Court of Appeals erred by requiring the holder of a prescriptive easement to either establish privity of estate with the previous owner or to take legal action establishing their prescriptive rights. The Court noted that Michigan caselaw clearly establishes that if the requirements for a prescriptive easement were met by a prior owner, privity and/or legal action establishing the prescriptive easement were unnecessary. In short, the Court reaffirmed the longstanding rule that once a prescriptive easement is established, it becomes an easement appurtenant that will benefit subsequent owners.
Prescriptive easements can arise in both commercial and residential property contexts, so buyers of real estate are well served to do their due diligence and ask sellers about any uses of the target property, as well as the surrounding properties, that may not be protected by a recorded easement or agreement. If you have any questions about easements (prescriptive or otherwise), please contact one of Maddin Hauser’s real estate attorneys.