Having a construction project start next door can fill some strata owners with a sense of dread. Nobody likes living or working next to a construction site. However, if the developer next door needs an easement to complete its construction, your strata corporation may have an opportunity to financially benefit, and even lessen the inconvenience of the construction for its owners.
The Basics – What Is An Easement?
A common property easement is a right to access the common property of a strata corporation for specific purpose. The common property of a strata building is typically thought of as including the common spaces in the building. However, the common property also includes the earth below the building and the air space above.
Developers often need easements for those parts of the common property to swing their construction cranes within the strata corporation’s airspace or put shoring in the strata corporation’s land to support their projects. Without appropriate easement rights, developers risk trespassing on their neighbours’ property.
Section 79 of the Strata Property Act requires a 3/4 vote at an annual or special general meeting for a strata corporation to grant an easement over the common property.
How Can Strata Corporations Benefit From Giving An Easement?
Developers are often prepared to pay strata corporations for giving them an easement. If a developer approaches your strata corporation to ask for an easement it is likely because that developer has determined that it is cheaper for them to do the construction with the easement. Developers may even be willing to offer other promises and guarantees in addition to money.
What Should a Strata Corporation Consider Before Granting an Easement to a Developer?
A strata corporation should consider the following points when considering an easement agreement:
- In addition to the payment price, is the developer prepared to cover the strata corporation’s costs such as legal costs for considering the agreement?
- Are any other expert reports necessary to ensure the construction will not harm the strata corporation? For example, if the project involves burying things in the ground, the strata corporation may want to get a geotechnical report. Will the developer cover those costs as well?
- Allowing anyone to use the common property and having construction next door creates risks. A strata corporation should consider if the developer is offering sufficient insurance and indemnities to protect the strata corporations from those risks. Also consider getting guarantees from the development company’s owner or parent company.
- When does the easement expire? Easement agreements are typically not permanent but a developer may draft an agreement that make them last for decades. If the easement has a long expiry date, the developer does not have to come back to the strata corporation to get a new easement if the construction project becomes stalled or is abandoned. The strata corporation should consider negotiating a reasonable termination date so that the owners know approximately how long the construction will last and that they will be compensated again if the developer has to come back to renew the easement after leaving their project abandoned or unfinished for too long.
The above are just a few examples but there are many other considerations that come with easement agreements.
WHAT WE DO
Easement agreements are complicated documents and a strata corporation should seek legal advice before entering one. Lesperance Mendes has experience representing strata corporations that have been approached by developers asking for easement agreements. We can assist you negotiate, review and implement your strata corporation’s easement agreement. For more information on our strata law practice, contact Paul G. Mendes, partner at firstname.lastname@example.org phone 604-685-4894.