An unrecorded easement is a right-of-way or access right that was never filed in county land records. Common examples include prescriptive easements established by years of open use, implied easements from prior ownership patterns, and private road access easements documented only by handshake or informal letter.
Why This Creates a Loan Problem
Lenders require that all easements affecting a property appear in Schedule B of the title commitment. An unrecorded easement is not searchable in county records, so title companies typically cannot insure over it. If a neighbor has an established right to cross the property and that right is unrecorded, the marketability of the collateral is impaired and the loan cannot close until the issue is resolved.
How Prescriptive Easements Are Established
- ✦Open and continuous use for the statutory period, which ranges from 3 to 21 years depending on the state
- ✦Use without permission of the landowner
- ✦Courts can recognize prescriptive easements even without a deed or written agreement
- ✦Some states require the use to be exclusive; others require only that it be open and notorious
Resolution Options
Recording a quitclaim easement deed with signatures from both parties resolves the issue and satisfies the title company. If the easement is genuinely prescriptive and contested, a quiet title action may be required. Either path adds weeks to the closing timeline. Flag these issues early if a survey shows a well-worn access path or driveway crossing the property without a recorded easement.
Aria can walk through Schedule B title exceptions and when they are acceptable to Fannie Mae or FHA. Ask at vicariointel.com.
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