Grand Junction, CO asked in Real Estate Law for Colorado

Q: When/how should an easement be disclosed by sellers or title company? Are easements strictly the buyers responsibility?

Easement was not disclosed by owners. Easement was noted in single document received at the closing table. No details given, only naming who easement was granted to, and skimmed over. After much research easement is .25 acres of property restricting use substantially (we can plant grass, no building, no trees). Owners accepted payment for sewer pipe to be installed across entire property and listed home immediately after project was finished. Nothing noted on disclosure. We used agent, mortgage lender and title company. This feels dishonest at best. Is this legal?

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1 Lawyer Answer
James A. Greer
James A. Greer
Answered
  • Boulder, CO
  • Licensed in Colorado

A: Dear Buyer: If I understand your description of the facts, your Seller had knowledge of an Easement for sewer line across the Subject Property which restricts your expected use. A claim against the Seller is called "Failure to Disclose" and is in the nature of a fraud claim. The "test" for Failure to Disclose includes: (1) was the information material to a Buyer's decision to purchase (seems clear that the easement, if disclosed, would have impacted your decision-making); and (2) did the Seller have actual knowledge (by your identified facts, that answer also seems to be "yes"). Seller seems to have liability - you should begin your claims process analysis there (i.e. a Legal Demand Letter vs. Seller and then pursuit of Mediation in accordance with your Purchase Contract). Pay attention to the Seller's disclosure paperwork, and the Title Insurance Company's "preliminary title report" as that information will be needed for your attorney to get the full picture before lodging the said Legal Demand. JIM GREER is an attorney licensed to practice in CO and CA and has specialized in real estate matters for the past 32 years; nothing herein shall be construed as the offering of legal advice insofar as Mr. Greer is not in an attorney-client capacity with the inquiring party. 303.818.8422

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