A Primer: What is a Land-Use Agreement?
Land-use agreements are designed to set out expectations and rules for parties, property rights, and certain activities related to the use of real estate. In part, they are used to resolve disputes or ambiguities or avoid them altogether by delineating the development, use, maintenance, alteration, access, and other such rights and obligations among two or more parties.
Land-use agreements can cover many issues. Problems can typically be avoided by addressing issues early in the negotiating process and not leaving them unaddressed to be dealt with at a later time during the life of the development, property, or activity. Often, the time of the execution and processing of a land-use agreement in connection with a larger development project or land transaction is advantageous because it can be incorporated into the overall paperwork and reviewed as part of the overall development project, property, or land transaction.
There are many forms that a land-use agreement can take, and they can be quite specific to the projects or activities being undertaken . The following, as an example, are just a few of the many ways land-use agreements can be used:
• Easements
• Restrictive covenants
• Leases and subleases
• Licenses
• Easements in gross
• Prescriptive easements
• Reciprocal easement agreements
• Covenants establishing developer design and development committees and requirements
• Declaratory judgment action judicial determinations
• Restrictions on use of property (surface and subsurface)
• Reciprocal parking agreements
• Development agreements
• Reciprocal drainage agreements
• Declaration of covenants and conditions
• Maintenance agreements
• An act creating servitudes and real rights
• Homeowners’ agreements
• Private restrictions
• Performance bonds for infrastructure improvements
• Dedication of property interests to municipalities, owners’ associations, or other entities
• Development orders
• Development agreements
• Design review boards
• Alterations to agreements that affect drainage or access
• Agreements not to compete
• Non-disclosure agreements
• Non-disturbance agreements
• Agreements not to interfere with credit tenant leases
• Access easement agreements
• Conservation easements
• Settlement agreement approvals and agreements
• Access easement agreements
• Right-of-way agreements (utility corridors for power, cable, and phone)
• Preservation easements
• Lot line adjustment agreements
• Development use agreements
• Townhome and condominium declarations
• Approval of development as permitted by law
• Zoning determinations and approvals
• Lot releases to permit additional sales and financing of improvements
• Approvals and consents to encroachment, lot line adjustments, setbacks, partitioning, or dissolving existing restrictions
• Runoff and discharge agreements
• Restrictive covenants
• Development commitments
• Utility service and master utility agreements
• Solid waste and recycling agreements
• School agreements
• Joint parking and infrastructure agreements
• Leasehold and subleasing agreements
• Side agreements in connection with a development or project
• Lot releases and restrictions
• Utility agreements
• Building board agreements
• Alteration agreements
• Setback requirements and agreements
• Reciprocal agreements to support access to and through property
• Improvements agreements
• Municipal agreements (concurrent and exclusive) for the maintenance of infrastructure improvements and rights-of-way
• Any document or agreement that may be construed as a servitude, real right, easement, license, covenant, or restriction, and agreements for the maintenance and repair thereof
Land-use agreements are very specific to the projects under consideration—often, as a practical matter, because they may deal with private arrangements between neighbors, places of business, adjacent owners or subdivisions, or property within or adjacent to to an established development or subdivision, or may result in mutually exclusive uses or activities.
The Different Types of Land-Use Agreements: A Breakdown
Land-use agreements come in many forms, and they are often used for different and varying purposes. The most common types of land-use agreements are leases, easements, and conservation agreements.
Leases
Traditionally, leases are a written or oral arrangement between a landlord and a tenant. An oral lease is any agreement made without the use of written documentation or a contract. While an oral agreement may be valid and enforceable, the burden of proof is on the leaser to prove the terms of the agreement. If a lease is written, it is important to be diligent. A poorly drafted lease could put the landlord at a disadvantage, or it could result in litigation if it is not clear about the rights and obligations of the parties. An oral lease usually runs for one year and is automatically renewed at the end of each year until the agreement is terminated by either party. A lease can run longer than one year if it is in writing or it is "no longer than the period defined by the applicable statute of limitations." A lease terminates at the expiration of the term if no one terminates it prior to that term. A lease is typically a conveyance of some right, interest, or property from a lessor to a lessee. Most often, a lease is for the possession of property, but it can also be for easement rights, leases for royalties (i.e., mineral leases), leases for profits or pannage, or leases for licenses to enter into another’s property.
Easements
Whereas a lease can be thought of as transferring possession of land, rights, or property, an easement can be thought of as a "privilege" to use for a specified purpose. It creates a right for the grantee of the easement to use the land of the grantor in a particular way. A common example is a right-of-way easement. This enables the person having the easement to travel across the land of another person. Requiring the owner to do something, or prohibiting the owner from doing something on his or her own property is an example of an easement. An easement is real property of an indefinite duration and runs with the land, attaching to the land itself and not to the owner of the land. It passes to heirs if the grantee dies and may be enforced by the grantee’s successors. There are four types of easements: Easements are also classified as being appurtenant or in gross. Whereas an appurtenant easement gives a dominant estate a right to use a servient estate, an easement in gross is personal to the grantee and is a personal right to use the servient estate. An easement "in gross is personal to the grantee’s right to use the servient estate and it does not run with the land."
Conservation Agreements
A conservation agreement (also called a "conservation easement") is similar to an easement; however, a conservation agreement is dedicated to the protection of the environment of land. A typical conservation agreement may be between a land trust or a state agency and a property owner. It conveys certain property rights from the property owner to the land trust or agency. The goal of the agreement is to provide protection of the land’s environmental and natural value. For example, the protection might extend to the water quality of an existing stream running through the property or the existing woodlands on the property. An agreement may also limit future development of the property or only permit the development of certain areas of the property. An individual landowner who drives the process and secures the requisite approvals and financing to move forward with the acquisition and development of a conservation agreement can apply for a tax credit up to 50 percent of the value of the agreement.
Key Elements of a Land-Use Agreement
Land-use agreements often apply when adjacent property owners want to use a part or all of the land of another who is willing to extend to them such an option. Land-use agreements are unique in that they balance with the rights of the parties as concurrent titlholders because they are created to divide title in such a property. Common elements to many land-use agreements are: the parties to the agreement, the duration for which the provisions apply, the uses/applications permitted and prohibited, and the allocation of duty with regard to maintenance and upkeep. Basic elements may be further refined and tailored to the particular situation of the contracting parties. With that said, the duration of a land-use agreement is frequently unlimited, i.e., perpetual, subject only to the right of the landowner to terminate the encumbrance at any time if the intent of the parties, as determined from the agreement as a whole, would permit. The prohibition of certain uses on the subject property may presumably mirror the parties’ current practices with regard to those uses as well as what uses are mutually beneficial to the parties’ interests. Typical land-use agreements will also identify everything that each party is responsible for in terms of maintenance and upkeep. Such responsibilities will include: obligations to preserve the subject property from waste, to repair the subject property should damage occur, to keep a particular structure on the subject property in a particular state of repair and/or to sustain a particular landscaping or design feature of the subject property.
Legal Implications and Compliance in Land-Use Agreements
Land-use agreements, especially those involving tribes, must comply with a host of laws and regulations or risk being overturned. In the United States, the federal government has the power to regulate commerce within tribal lands, making federal compliance a primary concern. At a minimum, an agreement must not violate federal law, including environmental regulations and case law. Additional legal considerations may apply depending on the nature of the agreement. For example, agreements allocating water use rights between settlers cannot violate governing state water codes. Compliance also involves understanding the land-use agreement application and public involvement process. If applicable, all parties must be notified of the governing body budget and planning timelines as well as public hearings and review periods. Finally, it is important to consider how that agreement gives rise to conflicts. If the agreement grants certain users "preneed" rights, other users may be denied access to those resources. Further, a land-use agreement between two tribes may hinder their future ability to grant access to nontribal members.
How to Draft and Negotiate a Land-Use Agreement
When it comes to drafting a land-use agreement, there are a number of considerations that must be taken into account to ensure that the agreement is clear, fair and mutually beneficial for all parties. The process of drafting and negotiating a land-use agreement typically involves the following steps:
- Conduct an initial assessment: Before beginning the drafting process, the parties to the land-use agreement should conduct an initial assessment of the situation. What are the goals and objectives of the land-use agreement? What are the potential risks and liabilities? What resources are available for the project? These questions will help form the basis of the land-use agreement and ensure that it addresses the specific needs and concerns of all parties.
- Create a draft agreement: Once the initial assessment has been completed, the next step is to draft the land-use agreement. This is a crucial step in the process as it sets the framework for the entire project. Be sure to clearly outline the specific terms, conditions, and obligations of the parties, and be as specific as possible to avoid any ambiguity . It is also important to consider the legal implications of the agreement and to consult with legal counsel as needed.
- Negotiate the terms: After the draft has been created, the next step is to negotiate the terms of the agreement with all parties involved. This process can often be time consuming and complex, but it is essential to ensure that all parties are in agreement before the final version of the agreement is drafted. Be sure to remain open to feedback and suggestions from all parties, and be willing to make concessions as needed to reach a mutually beneficial agreement.
- Finalize the agreement: Once all parties have agreed to the terms and conditions of the land-use agreement, the final version can be drafted and signed. Be sure to include any changes that were agreed upon during the negotiation process and to review the agreement carefully before signing. It is also important to be aware of any potential legal issues that may arise once the agreement is in place, and to address these issues upfront to avoid future disputes.
Land-Use Agreements: Common Issues and Solutions
Land-use agreements, while important tools for planners and land managers, do come with common challenges. First and foremost, goals may change and evolve over time. What was once a mutually agreed upon benefit in the context of a land trade, for example, may later become a source of disagreement between parties. Land owners often disagree on the true intent behind any such changes. Relatedly, outside forces can weigh heavily on a land deal. Government policies can rapidly change the value of land, including changes to governmental land values, property taxes and land-use policy shifts.
All land-use agreements should include an "amendment" or "amendments" clause requiring the parties to update the amateur agreement upon the occurrence of specific circumstances, usually exhaustion of the process or procedures necessary for implementation of the deal. Many land-use agreements also provide that a party can seek specific performance in the event of a breach (e.g., force the other party to go through with the deal).
Land-use agreements have become more prevalent as states, municipalities, and real estate developers confront increasing challenges with, among other things, availability of land, rates of development and redevelopment, the need for new housing and infrastructure.
Case Studies: Examples from the Field
Land-use agreements can often be contentious, but our experience shows that with open communication and a collaborative approach, any number of issues can be resolved. Here are some examples of real-world land-use agreements and how they have been successfully negotiated and implemented to settle disputes.
A. Experience of Land Owner – Complaint Regarding Excessive Dust
We represented a business in Redmond, Washington, which owned a property directly adjacent to a gravel pit. The property contained a commercial structure which the owners of the gravel pit believed was vacant. The owner of the commercial structure operated heavy equipment at night, which created loud noise. On several occasions planted trees and other vegetation destroyed by the activity and noise. The owner of the commercial structure filed a complaint with the city. This dispute was about the excessive dust and high noise levels and how to address their impact, rather than about the permitted use of the land. The issues were successfully resolved through communication with all parties. The gravel pit operators and the plant operator signed a land-use agreement detailing the activities of each party, including limitation on the hours, types of vehicles and bulk of the materials allowed to be processed in the area. Importantly, the gravel pit owners ultimately agreed to pay for vegetation and trees to be planted to recreate the buffer zone once enjoyed by the original landowners.
B. Experience of Land Owner – Complaint About Tree Limbed Off or Cut
We represented a land developer in Issaquah, Washington which borders on Snoqualmie Valley Trail, operated by King County. A portion of the developer’s land is adjacent to a privately-owned entrance to the valley trail. The land developer maintains a fence which runs parallel to the valley trail. The valley trail had trees, located within the right-of-way of 65-foot wide Snoqualmie Valley Trail, which shaded the land developer’s plantings and prevented sun light from energizing the plants. The land developer wanted the shade trees cut or limbed to allow sunlight to reach the plants . King County objected to the request of the land developer claiming the trees were part of the county’s aesthetic landscaping of the trail. The issues were again successfully resolved through communication with all parties. The land developer and the county signed a land-use agreement granting permission for the trees to be removed or limbed. In consideration, the land developer agreed to plant several more trees on the opposite side of the trail for the benefit of the public.
C. Experience of Land Developer – Non-Usage Issues for Sanitary Sewer
We represented a land developer in Snohomish County, Washington. McGee Creek runs through the property. Approximately one-half mile of the creek, at a depth of approximately 8 feet, has been used as a sanitary sewer line, in part due to the easement. The creek has been sandbagged and the sewer pipe was laid under the riverbed. The sanitary sewer line has not been used for the last 12 years and the developer believed the sewer line should be removed. The issues were successfully resolved through communication with all parties. In this case, we were able to obtain confirmation from the Department of Health that the sewer line no longer meets the standards for a sanitary sewer. The parties entered into a land-use agreement to allow the removal of the sewer line. The land developer was to be responsible for securing excavation permits from the Department of Ecology (DOE) and the City of Mill Creek inasmuch as the riparian areas along McGee Creek, and the easement, extend to the center of the creek, along with the pipes. Further, King County will be responsible for replacing the pipe with a new sanitary sewer line. In consideration for the use of the land, King County granted the land developer additional credits for SDI fees paid for extra sanitary sewer capacity. The new pipe will be located under the creek and approximately 200 feet upstream. It will be surrounded by concrete creating a box 4 feet wide by 6 feet high. The pipe will be backfilled with sand against its exterior and eaten into by McGee Creek creating a channel through the pipe, provided the water level is high enough. The work, which is now proceeding, is proceeding pursuant to the land-use agreement.