by: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law
randolphp@umkc.edu

EASEMENTS; CREATION; NECESSITY; CONDOMINIUMS: Property owner who sold part of a tract to allow its development under a condominium system may establish an easement by necessity even though the declaration sets forth no rights in owner.

Big Sky Hidden Village Owners v. HVI, 915 P.2d 845 (Mont. 1996)

Declarant subjected a portion of its land to a condominium declaration. At the time of the Declaration, there were numerous roads and utility connections crossing over both the condominium property and the balance of Declarant's property, providing access to both and, in the case of the utility lines, to third party owners of neighboring property. The Declaration declared the roads and utility lines to be "general common elements" owned by the condominium owners and did not mention easement rights in third parties in any of this property. Later, in a dispute concerning the development of Declarant's remaining parcels, the condominium owners contended that the roads and utility lines were property of the Condominium and not subject to use by other parties.

The court had little difficulty with the utility connections, which were in existence prior to the Declaration and which before and after the Declaration had been maintained and serviced by the utility providers and not the Condominium or the Declarant. The court held that these belonged to the utilities and the utilities could decide what additional hookups were permitted. It appears to base its conclusion on the notion of easements by implication arising at the time of the Declaration, although the result regarding the utilities might better be described based upon the fact that the utilities already had an unrecorded but apparent easement across Declarant's property before the Declaration and that easement continued to bind the condominium.

The more interesting discussion has to do with the roads. The court finds that these roads were available for benefit to Declarant's reserved property on the grounds that they constituted esements by necessity. Although the roads apparently were in existence at the time of the Declaration, and the court refers to easements by "implication and necessity," it clearly regards the roads as easements by necessity. It demonstrates that it understands that easements by necessity arise even when no apparent roadway exists at the time of severance of the dominant and servient parcels from common ownership. We must assume, therefore, that either some of the roads indeed did not exist at the time of severance or that the court is authorizing the creation of additional roads as necessary to serve Declarant's reserved property.

The condominium owners argued that the inference that there was an easement by necessity was negated by the fact that the Declarant expressed a plan of development that would terminate after ten years. The court indicated, however, that the Declarant had not indicated expressly that it would not develop its adjacent parcels after the running of ten years, but indicated only that it would not add those parcels to the condominium. This does not negate the notion that the Declarant might still expect to have access to the roads for those properties it had elected not to add to the Condominium.

Comment 1: The roads largely preexisted the development and crisscrossed both Declarant's land and the condominium property, requiring each group to have easements over the others land. It is easy to see why the court concluded that both sides should have the right to use the roads. It is more difficult to understand why the court elected to use the concept of easement by necessity to reach that conclusion.

The court never indicates that there were any roads not in existence at the time of the Declaration, but, as suggested above, it knowingly applied the easement by necessity concept, so we must assume that it was prepared to declare an easement where there was no evidence of a road at the time of severance.

This raises the interesting question of whether the condominium unit purchasers were bound by the easements by necessity when they acquired their units. Assuming that some of the roads still had not been developed (the condominium complex was developed in stages), weren't the unit purchasers bona fide purchasers for value under the recording acts?

Interestingly, whether the recording acts will cut off an unrecorded easement by necessity is a question that has elicited a wide variety of responses. In their fine book, The Law of Easements and Licenses in Land, Jon Bruce and James Ely point out that the cases divide along a number of fracture lines, but that there seems to be a clear split between courts that place the recording act values higher than the interests of the easement holders and those that conclude that the recognition of an unwritten easement based upon public policy compels the further conclusion that recording act policies should not destroy such interests.

Comment 2: Would the Declarant liable to the condominium unit purchasers for breach of title warranties? For breach of some other implied or express warranty?

Comment 3: In fact, even if an easement by necessity might be appropriate in this case, in many such cases the "bad equities" against the Declarant's position ought to raise an estoppel against an easement by necessity arising. Here, the court may have concluded "no harm, no foul."

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