An appraiser is valuing a 20-acre tract zoned agricultural but crossed by a deeded right-of-way allowing public vehicular access to a lake. The right-of-way, established in 1958, is 30 feet wide and bisects the property diagonally. No compensation was paid at creation, and the landowner receives no income from it. For appraisal purposes, how should this right-of-way be classified?
Correct Answer
C) An easement appurtenant, diminishing highest and best use potential
A deeded right-of-way established by written agreement and running with the land constitutes an easement appurtenant (benefiting the dominant tenement—in this case, likely adjacent lakefront lots or the public via dedication). Because it is permanent, recorded, and restricts use of the servient estate (the 20-acre tract), it is an encumbrance that may impair highest and best use—e.g., by preventing subdivision or intensive development across the corridor. Option A is incorrect: an encroachment is an unauthorized physical intrusion (e.g., a fence over a boundary), not a legally authorized right-of-way. Option B is wrong: a license is personal, oral or informal, and revocable—not deeded or permanent. Option D mischaracterizes the instrument: covenants impose affirmative or restrictive obligations (e.g., 'no commercial use') but do not grant rights of use over land.
Why This Is the Correct Answer
A deeded, recorded right-of-way running with the land is an easement, and characterizing it as appurtenant reflects that it serves access to the lake for benefited parcels or the public rather than being a revocable personal permission. The critical appraisal consequence is that it is permanent and burdens the servient estate, potentially impairing highest and best use by constraining subdivision and development. The absence of compensation or income does not weaken the burden. The appraiser should quantify the impact from paired sales or by analyzing the loss of developable area and configuration rather than by simply deducting the corridor's acreage.
Why the Other Options Are Wrong
Option A: An encroachment, requiring adjustment for physical intrusion
An encroachment is an unauthorized physical intrusion across a boundary, created by error rather than by grant, and curable in principle by removal or litigation. This right-of-way was created by deed and is fully authorized. The two concepts sit at opposite ends of the authorization question, and mislabeling one as the other would suggest a remedy that does not exist.
Option B: A license, revocable at the landowner’s will
A license is bare permission, typically informal, personal to the licensee, revocable at will, and terminating on the owner's death or sale of the property. A recorded 1958 deed creates none of those characteristics; it creates a durable interest binding successors. If this were a license the landowner could simply revoke it, which is plainly not the case.
Option D: A covenant running with the land, limiting development rights
A covenant imposes an obligation to do or refrain from doing something, such as maintaining a fence or refraining from commercial use, and it constrains the owner's conduct. An easement grants someone else the affirmative right to use the land. The distinction matters because a covenant would not give the public a right to drive across the tract, which is exactly what this instrument does.
Deeded Means Durable
Ask two questions of any burden. Was it granted in writing and recorded? Then it is an easement and it binds successors. Was it merely permitted? Then it is a license and it dies with the permission.
How to use: When a stem supplies a creation date, a deed, or a recording, answer easement. Reserve license for informal or verbal permission and encroachment for unauthorized physical intrusion.
Exam Tip
Do not measure an easement's impact by the acreage it covers. A diagonal corridor can sterilize far more development potential than its surface area suggests.
Common Mistakes to Avoid
- -Confusing an easement with a license or an encroachment
- -Assuming an uncompensated easement is invalid or revocable
- -Measuring the value impact by corridor acreage rather than by lost development potential
Concept Deep Dive
Analysis
The classification of a burden on land turns on how it was created and whether it runs with the land. A deeded right-of-way created in 1958 by written instrument is a recorded property interest, not a permission and not a trespass. Easements come in two forms: appurtenant, which benefits an adjoining dominant parcel and passes automatically with title to both the dominant and servient estates, and in gross, which benefits a person or entity such as a utility rather than a neighboring parcel. Either way the burdened owner cannot revoke it, and the absence of compensation at creation or of income today has no bearing on its validity or permanence. For the appraiser the classification is only the beginning; the valuation question is how a 30-foot corridor cutting diagonally across 20 acres affects the site's utility. A diagonal bisection is particularly damaging because it can fragment the developable area into awkward remnants, complicate road layout and lot configuration, and constrain any future subdivision far beyond the 30 feet of surface actually occupied.
Background Knowledge
You need the categories of encumbrance and how each is created and terminated: easements appurtenant and in gross, licenses, profits, covenants and deed restrictions, liens, and encroachments. You also need dominant and servient estate vocabulary, and the highest and best use framework, particularly how a burden affects the legally permissible and physically possible tests.
Real-World Application
An appraiser valuing a 20-acre tract bisected by a lake access easement lays out a hypothetical subdivision with and without the corridor, finds it costs six lots rather than the two the acreage alone would suggest, and supports the diminution from that analysis plus paired sales of similarly burdened tracts.
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