Underwriting

How to adjust comps for unrecorded property easements

Underwriting a property with unrecorded easements requires careful adjustment of your comparable sales. These easements can significantly impact property use and value, so you must factor them into your offer calculation to reflect potential limitations.

November 8, 2026 · 3 min read

What is an unrecorded easement?

An easement is a legal right for someone else to use a portion of your property for a specific purpose, even though you own the land. This could be for utility access, a shared driveway, or even a pathway.

An unrecorded easement means it does not show up on the public record or deed. These are often old, informal agreements or prescriptive easements established by long-term use.

The challenge is that they still affect the property, but you only discover them through careful observation, a seller's disclosure, or a detailed survey.

Identifying potential unrecorded easements during due diligence

Look for physical clues during your property walk-through. Are there utility boxes or poles far from the road? Is there a path that seems to cut across the yard to another property? Is there a shared fence or driveway with a neighbor?

Ask the seller directly about any agreements he or she has with neighbors or utilities regarding property use. Sometimes he or she will mention an old "understanding" that might be a de facto easement.

A survey is the most definitive way to identify these, but that usually comes later. Your initial underwriting needs to account for the risk of one.

How unrecorded easements impact property value

An easement can restrict what an owner can build or do on a portion of his or her land. This directly affects usable space and development potential.

They can also create access issues or imply ongoing maintenance responsibilities. A property with a major, unrecorded shared driveway easement might be less desirable than a similar property without one.

The market often values properties with encumbrances lower, even if they are unrecorded, due to the inherent uncertainty and potential for future disputes.

Adjusting your comps for the impact

When comparing to comps, look for properties that have similar encumbrances, recorded or unrecorded. This is not always easy.

If your comps are clear of easements, you must make a downward adjustment to your subject property's value. There is no hard-and-fast rule for this.

A hypothetical example: Suppose a comparable property sold for $200,000. If your subject property has a significant unrecorded access easement, you might subtract a hypothetical $10,000-$20,000, depending on its severity and impact on usability.

Factoring in the risk and cost of resolution

An unrecorded easement introduces legal risk. A future buyer might demand it be resolved, which could involve quiet title actions or negotiations with neighbors.

Factor in a contingency for these potential legal costs and time delays into your underwriting. This is a buffer for unexpected problems.

If the unrecorded easement is substantial, and the seller is not highly motivated, it might be a deal to walk away from. The risk often outweighs the potential reward for these types of properties.

Questions people ask

Can I just ignore an unrecorded easement?

That is risky. It might come up during a future title search or during a new survey. It can cause headaches for future buyers and impact your ability to sell.

What if the seller says it is "no big deal"?

The seller's opinion is usually biased. Always verify or account for the potential impact yourself. What seems minor to him or her might be a major headache for an investor.

Should I get a full survey before making an offer if I suspect an unrecorded easement?

For your initial cash offer, probably not. Surveys are expensive. Factor in the risk in your offer, and then order a survey if the deal goes under contract, with an inspection contingency.