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Mark Goodman Commercial Partners Title, LLC is dedicated to providing unparalleled customer service, commercial title insurance solutions, and creating great relationships. It is vital that we continue to find ways to execute on these promises to our clients; and with the advancement of social media, we believe we can take our values and ideals to a new level.

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I hope you find our blog to be informational and educational. We want to continue to be your Experts in commercial title insurance.

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Cordially, Mark

September 19, 2018 by Mark Goodman Leave a Comment

How we Insure Easements

Sometimes when you’re buying a piece of property you want to make sure that you have rights to use the easement that runs across another piece of property. You can ask your title insurance provider to insure those easements.

Researching the Easement

The title insurer would first need to do research on the burdened property that the easement runs across to make sure that it was properly granted. We also have to look forward from the date the easement was created to make sure that there have been no modifications of that easement or changes in circumstances that would mean that your present intended use is overburdening the easement.

Intended Use of the Easement

The other thing that needs to be looked at when we’re being asked to insure an easement is that the easement actually accomplishes what we’re trying to do. For example, we had a transaction some years ago where there was a piece of property that was located away from primary streets and needed an easement across railroad land to get out to the public right-of-way. There were actually three easements that seemed to provide that access, until we had a survey done and discovered that the three pieces did not connect to each other, nor did any of them actually connect all the way out to the street. So that’s another situation where there can be problems and it’s useful to have a survey of your easement as well as of your primary parcel if you are trying to understand your piece of property.

September 18, 2018 by Mark Goodman Leave a Comment

How to Terminate an Easement

The most common way to get rid of an easement is through a termination agreement or a termination of the easement, wherein the benefited property owner and any lenders who have liens on that benefited property all sign an agreement saying (in effect) “we don’t need this anymore and the easement will no longer be used.”

Ideally, it will also be signed by the property owner whose property is burdened by the easement. It should be signed by both sides. It can, however, be simply a deed from the benefited property owner to the burdened property owner releasing the easement if there are no lenders who relied on the existence of the easement.

Termination by Time or Abandonment

Another form of termination is termination by time. If the easement says it expires on a given day, after that day the easement will be deemed to no longer exist.

Then there’s the argument that an easement has been abandoned. However, abandonment is very challenging to prove under Minnesota law. It requires an affirmative action or actions that imply or confirm that the benefitted party no longer wants to use that easement. That being said, easements can go on for a very long time without being actively used because of that additional burden to prove abandonment.

Insuring an old easement without active evidence of use is difficult because if the easement has not been placed in use within the first period of years, then the easement can be deemed to be gone by adverse possession.

Subdivided Easements

One other thing that comes up sometimes with terminations is we end up with a benefitted property that has been subdivided since that easement was created, and the new owner of the burdened property wants to get rid of the easement. If the property has been acceptably divided so that the easement can continue on, then you would need terminations or agreements to terminate the easement from all of the owners of the subdivided lots. You wouldn’t necessarily go back to the original grantee, you would have to go to all the parties that have a benefit from that particular easement. That can be a cumbersome task if you’re dealing with a subdivision where there’s a lot of homes or buildings.

September 17, 2018 by Mark Goodman Leave a Comment

Easements 101: A Primer

An easement is the right of somebody other than the landowner to use a portion of the owner’s land for a specific purpose. Sometimes easements are for utility purposes. Sometimes they’re for ingress and egress or access. And sometimes easements are for things that are seemingly intangible like a view or air rights. In this article, we are going to offer a primer on easements.

How an Easement is Created

Easements can be created in a variety of ways. Here are a few of the most common:

Easements can be granted by deed
Easements can be created by an express agreement
Easements can be created by actual use over a period of years

In Personam vs. Appurtenant Easements

Typically, easements are in personam easements (which run in favor of an individual), or appurtenant easements (which run to the benefit of a particular piece of land).

In personam easements don’t automatically follow with the land and they may or may not be transferable from the initial grantee to a third-party. Usually, it is assumed that they are transferable, although there are some circumstances where the court might decide they’re not.

Appurtenant easements will always flow with the land. So if I own lot 1 and my neighbor owns lot 2, and my driveway runs across my neighbor’s lot, I’m going to want to make sure that driveway runs in favor of my parcel of land rather than just in favor of me.

Easement Agreements

Easement agreements can also include a wide variety of topics including allocation of expenses for maintenance, insurance requirements between the parties, and automatic termination language.

Easements are generally deemed to be permanent unless they contain a termination provision. If that termination provision is dependent on something that is not in the real estate records, ultimately people will treat that easement as if it’s still in effect even if it was intended to be gone.

September 13, 2018 by Jeff Peterson Leave a Comment

Defining “Constructive Receipt” in a 1031 Exchange

Constructive receipt is an essential term to understand when engaging in a 1031 exchange of like-kind property. In this article, we are going to define constructive receipt and how it comes into play in a 1031 exchange transaction.

What Exactly is “Constructive Receipt”?

Constructive receipt is an important term to be aware of in a 1031 exchange. In particular, it is something you want to avoid at all costs if you want to defer 100% of your capital gains taxes.

1031 exchanges allow you to defer taxes on the sales proceeds of a real estate transaction. However, the catch is that you need to reinvest all of those net proceeds into a new replacement property in order to effectively defer the gains. This incentivizes investors to continue investing and has the added benefit of stimulating the economy. That being said, you are not allowed at any time during the 1031 exchange process to receive any of the sales proceeds. These need to remain in a segregated account until it comes time to reinvest them into your new property. Should you actually receive any of these proceeds during the process – that is known as “constructive receipt” and will trigger taxable boot.

Commercial Partners

In any 1031 exchange you want to make sure you are working with a qualified intermediary you can trust. At Commercial Partners Exchange Company, our intermediaries have two decades of experience working on 1031 exchanges. We know the process inside and out – and will put our expertise to work for your transaction. Our intermediaries can draft your 1031 documents and answer all of your questions about the process. Reach out to us today at our downtown Minneapolis office to set up a time to chat with one of our experienced 1031 exchange intermediaries.