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If you're planning to purchase a property, is it subject to any easements or covenants? Does anybody else have a right to access the property?
These are just a few of the myriad of questions you should be asking as part of your due diligence when you are planning to purchase a property. It is especially important that you are aware of and understand the ramifications of any rights which are registered on title to the property you are interested in and the effect that they may have on your enjoyment of the property.
Two of the most common rights which will appear on a Certificate of Title (CT) for a property are covenants and easements. At first glance these two rights may seem to be very similar in their application because 1) they both record an interest on the property in favour of someone else, be it a person, corporation or public authority; 2) they both enjoy indefeasibility once they have been registered on title and 3) they both pass with the property when it is transferred from one owner to another.
This, however, is where the similarities end. A covenant on land is generally restrictive in nature and prohibits the use of land in a way contrary to its terms. A covenant creates an equitable interest in land and serves to notify potential purchasers that the property is burdened by the interest that is described in the title documents. Common forms of covenants can include restrictions on the building materials for structures on a property, the fencing materials which are permitted to be used or the use to which the property can be put.
An easement, by contrast, creates a proprietary right on a property which falls short of possession but passes an interest in the property from a “servient tenement” to a “dominant tenement”. Easements by their very nature can affect the value of the servient tenement to the extent of the right enjoyed by the dominant tenement.
The four characteristics which define an easement are well settled principles in property law and derive from the findings of the English Court of Chancery in the case of Re Ellenborough Park  Ch 131 and are briefly described as follows:
One of the difficulties with understanding which right has been created lies in the construction of the documents which purport to give the right. This was evidenced in the recent decision of the NSW Court of Appeal in Registrar General v Jea Holdings  NSWCA 74. The facts of the case can be briefly stated as follows:
Understanding the rights, legal or otherwise, that are attached to any property you are planning to purchase will help you make an informed decision on whether or not the property is suitable for your intended use be it commercial or residential.