Massachusetts Agencies

Reserved Right to Create Easement


In Barnside Realty Corp. v. Coughlin, 422 Mass. 233 (1996) the owner of property granted a mortgage to a bank that contained the following provision:

Subject to proposed Right of Way for road access and utilities and to pass and repass without limitations as shown on plan prepared by Morin Engineering, Inc., P. O. Box 982, Essex, 422 Mass. 01929, dated 10/2/87.

The plan of the proposed right of way was not recorded. In September, 1988, the owner granted an easement over the locus to the one Budrose, referring to a recorded plan. The granted easement was substantially similar to that described in the reservation stated in the mortgage. The deed granting the easement was recorded on November 8, 1988. The owner defaulted on his mortgage, and the bank foreclosed on the mortgage. The plaintiffs acquired the locus from the bank by deed dated November 17, 1988.

The court said the foreclosed property was subject to the easement:

We agree with the Land Court judge's reasoning that the mortgage provision purporting to retain the right to create an easement lawfully reserved in the owner of the locus the right to create such an easement. The grant of the easement created an interest in land that was exempt from the mortgage. The plaintiffs had notice of the recorded easement that had been granted pursuant to the reservation, and the sale to the plaintiffs pursuant to the power of sale in the mortgage [citation omitted] did not extinguish the easement. See Brooks v. Bennett, 277 Mass. 8, 15--16 (1931). Cf. Guleserian v. Pilgrim Trust Co., 331 Mass. 431, 436 (1954).

There is no reason why the security that the mortgagee bank received in the locus, as part of a business transaction, should not be subject to such limitations as the bank agreed to in advance. See Milton Sav. Bank v. United States, 345 Mass. 302, 306 (1963). The mortgagee's prior consent to the future creation of an easement over the mortgaged premises distinguishes this case from those in which a mortgagor unsuccessfully attempted to impose a servitude on mortgaged premises binding on the mortgagee without the mortgagee's consent. See New York Life Ins. Co. v. Embassy Realty Co., 293 Mass. 352, 355 (1936). The mortgage provision requiring the mortgagee's consent to creation of the easement was satisfied by the bank's approval specifically set forth in the mortgage itself.