[WSBARP] Extinguishment of easement and effect of security interest

[Eric Nelsen]

No, I got convinced by someone with a lot of experience in foreclosures, and also noting that the language in RCW 61.24.050(1)<https://app.leg.wa.gov/RCW/default.aspx?cite=61.24.050> was likely drafted with the common law rules in mind:

...the trustee's deed shall convey all of the right, title, and interest in the real and personal property sold at the trustee's sale which the grantor had or had the power to convey at the time of the execution of the deed of trust, and such as the grantor may have thereafter acquired.

Since it's explicit in the DOT foreclosure statute, I can't imagine that the mortgage foreclosure rule is any weaker in its protection of the secured interest holder.

Sincerely,

Eric

Eric C. Nelsen
Sayre Law Offices, PLLC
1417 31st Ave South
Seattle WA 98144-3909
206-625-0092
eric at sayrelawoffices.com<mailto:eric at sayrelawoffices.com>

Covid-19 Update - Sayre Law Offices remains available to serve our clients and the public during this time, subject to the orders and recommendations of government authority. Please do not hesitate to contact us if we may be of service to you, your family, or your business.

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From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of Paul Neumiller
Sent: Monday, April 20, 2020 7:38 AM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] Extinguishment of easement and effect of security interest

Hi Eric, did you find a specific case that changed your mind?


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From: wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com> <wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com>> On Behalf Of Eric Nelsen
Sent: Saturday, April 18, 2020 11:28 AM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com<mailto:wsbarp at lists.wsbarppt.com>>
Subject: Re: [WSBARP] Extinguishment of easement and effect of security interest

Kary, your view is the one supported by law. I was thinking there was could be an arguable distinction between creation of an easement and destruction of one. My view, which is not supported, started from the conceptual point that collateral can be destroyed and the lender can't just resurrect destroyed property by foreclosing. For example, if the loan is on a car that is wrecked and then dismantled for scrap; or a mortgaged house that burns down.

By that logic, I suggested that if a landowner could "destroy" an easement by extinguishing it, then it's gone and a foreclosure of a security interest can't bring it back. But clearly since an easement is completely a creature of law and has no physical existence analogous to a car or a house, the law can say what it wants about when and how it is truly destroyed or extinguished-or revived.

Sincerely,

Eric

Eric C. Nelsen
Sayre Law Offices, PLLC
1417 31st Ave South
Seattle WA 98144-3909
206-625-0092
eric at sayrelawoffices.com<mailto:eric at sayrelawoffices.com>

Covid-19 Update - Sayre Law Offices remains available to serve our clients and the public during this time, subject to the orders and recommendations of government authority. Please do not hesitate to contact us if we may be of service to you, your family, or your business.

All attorneys are working remotely during regular business hours and are available via email and by phone; please call the Seattle office. Videoconferencing also is available. Signing of estate planning documents can be completed and will be handled on a case-by-case basis; please call the Seattle office.

MAIL AND DELIVERIES can be received at the Seattle office. For any other needed arrangements, please call the Seattle office.

Be assured that we will continue to advise and support our clients throughout this health emergency.

From: wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com> <wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com>> On Behalf Of Kary Krismer
Sent: Saturday, April 18, 2020 8:29 AM
To: wsbarp at lists.wsbarppt.com<mailto:wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] Extinguishment of easement and effect of security interest


I'm not seeing how this is any different than the inverse, creating an easement on property that is subject to an existing mortgage without the mortgagee's consent.  Is there any question that in that situation the foreclosure of the mortgage would wipe out the new easement?  In this other situation you still have three parties and the act of two not being able to adversely affect the third.

Make the hypothetical more extreme.  The easement was an access easement to the property, but not a necessary easement.  An access road could be built to an adjacent road, but due to topography the road would be expensive, thereby greatly reducing the value of the encumbered property.

Kary L. Krismer

John L. Scott, Inc.

206 723-2148
On 4/17/2020 4:14 PM, Eric Nelsen wrote:
For anyone following this thread-I've been convinced at this point that the security interest can effectively "revive" the easement upon foreclosure, because the bundle of ownership and appurtenant rights that are encumbered is essentially frozen at the time of executing the mortgage or DOT. So if the borrower extinguishes an easement that benefits the encumbered property, the extinguishment is effective between the neighbors, but it does not extinguish the lender's contingent right to foreclose on the easement along with the benefitted property. In order for the neighbor to fully extinguish the easement, the neighbor would need both the benefitted owner's consent, and the benefitted owner's lender's consent.

So my argument below isn't right. Oh, well. Have a good weekend everyone--

Sincerely,

Eric

Eric C. Nelsen
Sayre Law Offices, PLLC
1417 31st Ave South
Seattle WA 98144-3909
206-625-0092
eric at sayrelawoffices.com<mailto:eric at sayrelawoffices.com>

Covid-19 Update - Sayre Law Offices remains available to serve our clients and the public during this time, subject to the orders and recommendations of government authority. Please do not hesitate to contact us if we may be of service to you, your family, or your business.

All attorneys are working remotely during regular business hours and are available via email and by phone; please call the Seattle office. Videoconferencing also is available. Signing of estate planning documents can be completed and will be handled on a case-by-case basis; please call the Seattle office.

MAIL AND DELIVERIES can be received at the Seattle office. For any other needed arrangements, please call the Seattle office.

Be assured that we will continue to advise and support our clients throughout this health emergency.

From: wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com> <wsbarp-bounces at lists.wsbarppt.com><mailto:wsbarp-bounces at lists.wsbarppt.com> On Behalf Of Eric Nelsen
Sent: Friday, April 17, 2020 3:22 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com><mailto:wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] Extinguishment of easement and effect of security interest

I agree that mechanically the sheriff's deed or the trustee's deed is likely to list the easement. But if the easement was previously extinguished, I would argue that the deed cannot re-create the easement, because the Deed of Trust can't have a security interest in, or foreclose on, something that doesn't exist. But I guess that also begs the question-I don't know that an extinguishment of an easement, executed by the owner of the encumbered property, is effective. I really think it should be, but I have nothing to back up my opinion.

If I could rephrase the problem: We generally think of mortgages and DOTs as being secured by land, a chunk of dirt that always exists and always will exist. It can be transferred to someone else but it's easy enough to envision that the security interest "stays" with the land even if the ownership changes.

But an easement can be "destroyed" by extinguishment in a way that dirt can't. An easement isn't a fee interest and by definition has to be situated outside the boundaries of the dirt that is the main focus of the security interest. The owner of land benefitted by an easement has, so far as I am aware, a unilateral and unlimited right to extinguish an easement that benefits the owner's property. It's not a transfer away, it's a cancellation. And once it's cancelled, there is no easement for the security interest to attach to.

Sincerely,

Eric

Eric C. Nelsen
Sayre Law Offices, PLLC
1417 31st Ave South
Seattle WA 98144-3909
206-625-0092
eric at sayrelawoffices.com<mailto:eric at sayrelawoffices.com>

Covid-19 Update - Sayre Law Offices remains available to serve our clients and the public during this time, subject to the orders and recommendations of government authority. Please do not hesitate to contact us if we may be of service to you, your family, or your business.

All attorneys are working remotely during regular business hours and are available via email and by phone; please call the Seattle office. Videoconferencing also is available. Signing of estate planning documents can be completed and will be handled on a case-by-case basis; please call the Seattle office.

MAIL AND DELIVERIES can be received at the Seattle office. For any other needed arrangements, please call the Seattle office.

Be assured that we will continue to advise and support our clients throughout this health emergency.

From: wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com> <wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com>> On Behalf Of Joseph McIntosh
Sent: Friday, April 17, 2020 2:27 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com<mailto:wsbarp at lists.wsbarppt.com>>
Subject: Re: [WSBARP] Extinguishment of easement and effect of security interest

If I understand the question properly, the proposition I think you are looking for is this -- the person auctioning the mortgaged interest, whether a sheriff or trustee, gives the purchaser a deed to that precise interest.

So, here, the buyer at the foreclosure would acquire the mortgaged interest, to include the easement.

This is how, mechanically, junior encumbrances are extinguished by senior lien sales.

From: wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com> [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Eric Nelsen
Sent: Friday, April 17, 2020 2:16 PM
To: 'WSBA Real Property Listserv' <wsbarp at lists.wsbarppt.com<mailto:wsbarp at lists.wsbarppt.com>>
Subject: [WSBARP] Extinguishment of easement and effect of security interest

A philosophical question:

B owns Blackacre, which has an easement appurtenant for a driveway across Whiteacre, owned by W.

B has a loan, secured by DOT on Blackacre. The DOT's legal description says it covers "Parcel A: Blackacre and Parcel B: Easement for driveway over Whiteacre."

W and B execute a document extinguishing the driveway easement over Whiteacre. So, the easement no longer exists.

Then B's lender forecloses on its DOT.

The question: Can the foreclosure "recreate" the easement over Whiteacre? In other words, was the earlier instrument extinguishing the easement ineffective because of the security interest, so that when the lender forecloses on "Blackacre plus easement over Whiteacre," the easement springs back into being?

Related question: Same result if the DOT's legal description just said "Blackacre" and didn't mention the easement appurtenant? Regardless of whether or not an easement appurtenant is mentioned in a deed, it travels with the benefitted land.

Sincerely,

Eric

Eric C. Nelsen
Sayre Law Offices, PLLC
1417 31st Ave South
Seattle WA 98144-3909
206-625-0092
eric at sayrelawoffices.com<mailto:eric at sayrelawoffices.com>

Covid-19 Update - Sayre Law Offices remains available to serve our clients and the public during this time, subject to the orders and recommendations of government authority. Please do not hesitate to contact us if we may be of service to you, your family, or your business.

All attorneys are working remotely during regular business hours and are available via email and by phone; please call the Seattle office. Videoconferencing also is available. Signing of estate planning documents can be completed and will be handled on a case-by-case basis; please call the Seattle office.

MAIL AND DELIVERIES can be received at the Seattle office. For any other needed arrangements, please call the Seattle office.

Be assured that we will continue to advise and support our clients throughout this health emergency.



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