Easements, Encroachments, and Title Contingencies in LA Luxury Real Estate

When the preliminary title report arrives in escrow — typically within a few days of opening — most buyers scan it briefly and assume their agent or escrow officer will flag anything material. Sometimes that assumption is correct. Sometimes it is not. In luxury real estate transactions, where the structures are often older, the lots are larger, and the history more complex, the title commitment deserves careful, informed attention from the buyer and their legal advisor. Understanding the categories of exceptions and what each one means for your intended use of the property is not optional diligence — it is foundational.

What a Title Commitment Actually Tells You

A preliminary title report — sometimes called a title commitment — is the title company's conditional agreement to issue a title insurance policy based on current conditions in the public record. It lists two categories of items: standard exceptions that apply to virtually all policies, and special exceptions specific to the property at hand. The standard exceptions include items like taxes not yet due and payable, rights of parties in possession, and matters that would be disclosed by an accurate survey. The special exceptions are where the substance lives.

Special exceptions are recorded instruments that encumber the property — easements, deed restrictions, CC&Rs, liens, conditions, and covenants that run with the land and bind future owners regardless of whether the buyer knew about them. A buyer who closes escrow without understanding what special exceptions affect the property is accepting liabilities they may not have contemplated. In the luxury tier, where buyers often have specific development, renovation, or use intentions, this can have material consequences.

Types of Easements Commonly Found in LA Luxury Properties

Utility easements are the most common and often the least consequential — provided the buyer understands their location. A recorded utility easement grants a utility company (gas, electric, water, telecommunications) the right to access a strip of the property for maintenance or improvement of infrastructure. The problem arises when a buyer intends to build a pool, guest structure, or significant hardscape in an area encumbered by a utility easement. Utilities can and do exercise their rights to enter, excavate, and restore — and they are not required to rebuild your landscaping to the same standard it was before. Knowing the location of easement strips before finalizing a design plan is essential.

Access easements grant a third party — often a neighboring property owner — the right to cross your land for ingress and egress. In hillside and canyon properties throughout the Santa Monica Mountains, Bel Air, and Palos Verdes, access easements across neighboring parcels are common. They range from narrow foot paths to easements wide enough to accommodate vehicle traffic. If a neighbor has a recorded access easement across a route you intended to gate, fence, or build through, your plans will require modification or legal action to alter.

View easements are less common but exist in some planned developments and upscale neighborhoods where early developers or homeowner associations sought to protect sight lines. A recorded view easement may restrict the height of vegetation or structures on your parcel in order to preserve a view corridor for a neighboring property. Buyers who acquire a property subject to a view easement and then plant trees or add a second story may find themselves facing a legal action from a neighbor with a recorded right they cannot simply ignore.

Solar easements and light-and-air easements exist primarily in newer planned developments and are relatively rare in established luxury submarkets. When they do appear, they can restrict development in ways buyers would not intuitively anticipate.

Encroachments: When the Physical Reality Does Not Match the Legal Boundary

An encroachment exists when a structure — a fence, a retaining wall, a deck, a portion of a building — physically extends beyond the legal boundary of the parcel and onto neighboring property, a public right-of-way, or an easement area. Encroachments are common in older properties, where construction predated precise GPS surveying, and in hillside areas where neighbors have informally shifted fences over decades.

The preliminary title report may note the possibility of encroachments if an ALTA survey has not been completed, or it may reflect a survey exception that allows the title company to exclude coverage for any matters an accurate survey would reveal. If you are purchasing a property where lot boundaries are material — large estates, properties with proposed development plans, coastal properties — commissioning an ALTA/NSPS survey before closing is money well spent. An ALTA survey establishes the precise location of all improvements relative to the legal boundary and identifies any encroachments in either direction. If an encroachment is discovered, it can be addressed through a boundary line agreement with the neighbor, a lot line adjustment, or a negotiated easement — all of which take time and legal involvement, but are far easier to resolve before closing than after.

CC&Rs and Deed Restrictions: What Runs With the Land

Beyond easements, many luxury properties in planned communities or tract subdivisions carry Covenants, Conditions, and Restrictions (CC&Rs) recorded by the original developer. These restrictions can govern architectural approval, approved uses, rental restrictions, and minimum square footage requirements. HOA-governed communities typically have CC&Rs, and buyers should read them — not just the summary disclosure the HOA provides. In non-HOA properties, older deed restrictions recorded by original subdividers may limit uses or restrict modifications in ways that are not immediately obvious.

A deed restriction requiring a minimum setback, prohibiting certain exterior materials, or mandating architectural review for any modification will affect your renovation plans whether or not you were aware of it at closing. These restrictions are generally enforceable by neighboring property owners who benefit from them, and they do not expire simply because they are old.

How to Work Through a Problematic Title Commitment

If the preliminary report reveals items of concern, the appropriate path is: review with a real estate attorney who understands California property law, request additional underlying documents from the title company (easement instruments, recorded CC&R documents), evaluate whether the items affect your intended use, and assess whether the seller has represented the property accurately in the disclosures. Items that cannot be resolved before closing — and that materially affect use or value — are legitimate grounds for requesting contract modifications or, if necessary, exercising the title contingency.

Removing the title contingency prematurely, under competitive offer pressure, without completing this analysis, is a risk that experienced buyers do not take. A clean, marketable title is not an aspirational standard — it is the baseline expectation of every transaction.