“Easement holders would be wise to re-record their easements or record filed surveys before problems arise,” said the Wisconsin Court of Appeals in TJ Auto LLC v. Mr. Twist Holdings LLC, 2014 WI APP 81. In this published opinion, the court held that an easement last referenced in a 1945 warranty deed had become unenforceable due to the failure to timely re-record the easement.
Types of easements
First, we will begin with a little background. Three basic types of easements in real property run with the land:
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Written easements: Easements executed by the owner of the parcel burdened by the easement — and sometimes by the owner of the parcel benefited by the easement — and recorded in the land records.
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Implied easements (aka easement by necessity): Easements created where the actions of all of the parties suggest that everyone intended that an easement should have been created, but simply forgot to write it down.
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Prescriptive easements: Easements under which someone has been using the easement for a sufficiently long period of time without objection, akin to adverse possession. (See § 893.28, Wis. Stats.)
The TJ Auto case involved the first type of easement, which was a written easement agreement recorded in 1928 and later referenced in a 1945 warranty deed. In the TJ Auto case, the issue before the court was how long is an easement enforceable? 40 years? … 60 years? … Forever?
TJ Auto LLC v. Mr. Twist Holdings LLC, 2014 WI APP 81
The facts of TJ Auto are not entirely unique, but the holding of the Wisconsin Court of Appeals is one that has the potential to impact innumerable real property titles in Wisconsin and that may result in legislative action.
The easement in question was first recorded in 1928 in the Kenosha County Register of Deeds Office by the predecessors in title to TJ Auto LLC and Mr. Twist Holdings LLC — providing that Mr. Twist’s predecessor had the right to use the west 10 feet of the property now owned by TJ Auto as an alley or driveway. The 1928 easement was last referenced in a warranty deed recorded with the Kenosha County Register of Deeds Office in 1945. A 1988 survey filed, but not recorded, with the Kenosha County Register of Deeds Office identified and referenced the 1928 easement.
TJ Auto purchased the property burdened by the easement in 2006. The record reflects that TJ Auto knew about the easement, knew that Mr. Twist’s employees and customers used the easement (Mr. Twist being a restaurant), and even negotiated a lower purchase price because of the easement.
In 2009, TJ Auto sought a permit from the City of Kenosha to construct a fence to block the easement, but the city denied the permit. Later in 2011, TJ Auto filed suit against Mr. Twist seeking a declaratory judgment that the easement “…was not properly procured as per Wis. Stat. § 893.33.” § 893.33, Wis. Stat. generally sets the time period for a person to start a legal action concerning real property. That statute says an easement is not enforceable unless it is recorded or referenced in the record within the last 40 years. The lower court declared the easement in full force and effect. TJ Auto appealed and prevailed — the court of appeals declared the easement no longer legally enforceable by operation of the 40-year statute of limitations set forth in Wis. Stat. § 893.33(6). Consequently Mr. Twist’s easement was gone.
In its reasoned decision, the court of appeals acknowledged that an argument could be made that its result declaring the easement unenforceable by Mr. Twist was counterintuitive, even unfair, as TJ Auto knew both about the 1928 recording and Mr. Twist’s use of the easement. But the court, being bound by Wisconsin statutes and not being a policymaking body, applied the language of Wis. Stat. § 893.33(6) finding that the statutes of limitations in Wis. Stat. § 893.33(6) and (8) provide no exception for knowledge or use — the essential question being when was the easement was last recorded.
Takeaways
The foregoing are the basic facts and findings in TJ Auto; the following are the takeaways for real estate professionals:
- For easements recorded before July 1, 1980, the limitations period (the time period a person has to enforce an easement) is 60 years (see § 893.33(8), Wis. Stats.).
- For easements recorded on or after July 1, 1980, the limitations period is 40 years (see § 893.33(6), Wis. Stat.).
- To be enforceable, the easement or a document referencing the easement must be recorded — not just filed — in the register of deeds office. Per the court in TJ Auto, the survey filed in 1988 did not have the markings of a recording, such as a date stamp and document number. The filing was not a recording, which renewed the limitations period under § 893.33, Wis. Stat.
- An easement dedicated on a certified or recorded plat approved by the appropriate governing body may be — but not necessarily is — sufficient to establish or re-establish the easement (see footnote #6 in the court of appeals’ opinion).
- Had the 1928 easement been re-recorded in or before 2005, Mr. Twist would still enjoy the benefit of the easement because the 1945 warranty deed referencing the easement essentially re-upped the enforceability of the easement for 60 years — thus through 2005.
Best practice
If the use of an easement is important to a real property holder, then determine when the easement was last recorded and thus when the enforceability of the easement expires. When in doubt, work with an attorney to either re-record the easement to re-up the 40-year clock or execute and record a new easement agreement. And if you are re-recording, be friendly to your neighborhood title examiners and registers of deeds by asking the attorney to include the originally recorded easement as an exhibit to a new affidavit, which includes the current legal descriptions for both the burdened and benefited properties and the names of the current owners of the burdened and benefited properties, thus enabling the register of deeds to index (and title professionals to find) the easement on and against all affected properties and to give notice to the world that the easement exists.
Resources
Wis. Stat. Text:
- Section 893.33(6), Wis. Stat.: Actions to enforce easements, or covenants restricting the use of real estate, set forth in any recorded instrument shall not be barred by this section for a period of 40 years after the date of recording such instrument, and the timely recording of an instrument expressly referring to the easements or covenants or of notices pursuant to this section shall extend such time for 40-year periods from the recording.
- Section 893.33(8), Wis. Stat.: If a period of limitation prescribed in § 893.15(5), 1977 stats., has begun to run prior to July 1, 1980, an action shall be commenced within the period prescribed by § 893.15, 1977 stats., or 40 years after July 1, 1980, whichever first terminates.
TJ Auto Court of Appeals of Wisconsin Published Opinion:
Cheri Hipenbecker is General Counsel for Knight Barry Title Group, the largest title insurance agency in Wisconsin and a leader in crafting and the implementation of ALTA Title Insurance and Settlement Company Best Practices designed to protect consumer funds and information.