Easements Related to Real Estate Development: The Temporary Construction Easement

Introduction

Either by choice or by blackmail (errr…I mean off-site construction requirements by a municipality or county), your developer client will need a temporary construction easement to do many things. The most obvious is putting bodies and equipment on someone else’s real estate to do work on your client’s real estate.

What about surface water drainage, slope management, putting in a line that the city requires but is unwilling to do itself?

Also, do not make the rookie mistake that the off-site requirements grant your client any rights whatsoever in the neighbor’s property. That is your problem to solve lawyer.

Below are the basics on a Temporary Construction Easement. I hope you find it useful.

A Threshold Primer: Easements vs. Licenses

Before getting to the temporary construction easement, it is worth fixing the vocabulary, because the category into which an access right falls decides whether it survives a sale, whether a title company will insure it, and whether the neighbor can revoke it the morning your crane arrives.

An easement is a nonpossessory interest that lets its holder use someone else’s land for a particular purpose. Marcus Cable Assocs., L.P. v. Krohn, 90 S.W.3d 697, 700 (Tex. 2002). Two estates are in play: the dominant (or benefitted) tract, which enjoys the right, and the servient (or burdened) tract, which bears it. For the developer, the project tract is almost always the one you want to be benefitted.

An easement appurtenant attaches to the land. It benefits a specific dominant tract, “runs with the land,” and passes automatically to whoever owns that tract next. It is the durable, financeable, title-insurable form, and it is the form a developer should insist on for anything the project will depend on. Both Texas and Missouri presume appurtenant status: courts will not read an easement as personal when it can fairly be construed to benefit the holder’s land. Drye v. Eagle Rock Ranch, Inc., 364 S.W.2d 196, 203 (Tex. 1963); Shipp v. Stoker, 923 S.W.2d 100, 103 (Tex. Civ. App.—Texarkana 1996, writ denied); Engelhardt v. Gravens, 281 S.W. 715, 718 (Mo. 1926); Three-O-Three Invs., Inc. v. Moffitt, 622 S.W.2d 736, 739 (Mo. App. 1981). The existence of a dominant tract usually resolves any doubt. Gowen v. Cote, 875 S.W.2d 637, 640 (Mo. App. 1994).

An easement in gross belongs to a person or entity, not to a parcel — the classic example is a utility line. Because there is no dominant tract, an easement in gross is historically disfavored and, unless the grant says otherwise, may not be freely transferable or assignable. Drye, 364 S.W.2d at 203. That is the wrong structure for a development right that needs to pass to a buyer, a lender, or a successor sponsor. If a right is drafted in gross, make it expressly assignable; better still, tie it to the project tract so it is appurtenant.

A license is mere permission. It creates no interest in land, is personal to the holder, and is ordinarily revocable at the will of the owner who granted it. A handshake “sure, stage your equipment on my lot” is a license, and the neighbor can take it back the day before you mobilize. Both Texas and Missouri recognize a narrow estoppel exception — a license on which the holder has reasonably and substantially relied by incurring expense may become irrevocable — but that doctrine is a litigation lifeboat, not a plan. The practical rule for a developer is simple: do not build a project schedule on a license. Get a written, recorded easement that satisfies the statute of frauds. An easement is an interest in land and, to be enforceable, must be in a signed writing. Tex. Bus. & Com. Code § 26.01; Tex. Prop. Code § 5.021; Mo. Rev. Stat. § 432.010.

With that framework in place, here is the easement that recurs most often in active development work.

The Temporary Construction Easement

A temporary construction easement (TCE) gives the developer the right to enter and use a defined portion of an adjacent tract for the limited duration of construction — staging and laydown, crane swing and boom overhang, grading and drainage tie-ins, the installation or relocation of off-site utilities, shoring, or simply ingress and egress for equipment. It is “temporary” in the sense that the use ends at completion; the underlying grant should still be a recorded, appurtenant easement, not a license, so the right cannot be revoked mid-pour and so it passes to a successor owner of the project tract.

The TCE is the easement most often left to the last minute and most often drafted too thinly. From the benefitted tract’s side, the objective is a scope broad enough to actually build the project, a term long enough to absorb delay, an exit that does not create open-ended liability, and a grant that is assignable to the people who will do the work and that runs with the project land.

Key provisions, from the benefitted tract’s perspective

• Purpose and permitted uses — drafted broadly. Enumerate the activities and add a catch-all for everything “related or incidental” to them. Texas confines an easement to its stated purpose and construes scope against the holder, so an under-described TCE is a self-inflicted wound. Marcus Cable, 90 S.W.3d at 700–01.
• Easement area — surveyed and exhibited. Attach a metes-and-bounds description or surveyed exhibit. A vague area invites a location dispute and, in Texas, can render the grant unenforceable for indefiniteness.
• Grant of ingress and egress, to the right people. The right is useless if the general contractor and subs cannot exercise it. Extend the grant expressly to the developer’s agents, employees, contractors, licensees, and invitees.
• Term tied to completion, with an outside date — and watch the interim deadlines. Define the term by reference to completion, but include a hard outside expiration so the burdened owner will sign. Scrutinize any short interim milestones a grantor inserts.
• Restoration and clean-up — defined, not open-ended. Expect to remove debris and restore the area; resist “to Owner’s satisfaction” in favor of an objective standard tied to documented pre-construction condition.
• Appurtenant; runs with the land. Make the easement appurtenant to and binding on successors of the project tract so the access right reaches your eventual buyer.
• Insurance, indemnity, bonding. Allocate liability for the developer’s entry. A protective grantor will stack insurance, a performance bond, and warranty/guaranty obligations on the developer; these are negotiable and should be scoped to the actual work.
• Match governing law and forum to the situs. TCE forms are recycled across deals and states; confirm the governing-law and forum clauses point to the state where the land sits, not the state of the form’s last use.

The two excerpts below — both drawn from real TCE forms — bracket the range. The first is a lean, developer-favorable grant; the second is a heavily negotiated, grantor-protective recorded agreement. Party names and project details are omitted; the drafting is what we are after.

Example 1 — A lean, developer-favorable grant

This form was used by a developer to obtain off-site utility-construction access across an adjoining tract. The granting language is broad and runs in the developer’s favor:

“Grantor … hereby grants, gives and conveys to the Grantee and Grantee’s successors and assigns as owners of title to the Grantee Property, and to their respective agents, employees, contractors, … licensees and invitees, a temporary construction easement upon, in, over, under, along, and across, together with the right o[f] ingress and egress, the Grantor Property … for the purposes of … (i) construction of off-site utility infrastructure, (ii) the staging of construction materials and other equipment, and (iii) any actions related or incidental to the foregoing …. Grantee may use the Construction Easement with both vehicular and pedestrian traffic.”

Three features make this grantee-friendly, and all three are worth borrowing. First, the grant extends to “successors and assigns as owners of title to the Grantee Property” and to the developer’s “agents, employees, contractors, … licensees and invitees” — the people who actually perform the work are covered without a separate assignment. Second, the spatial grant is expansive: “upon, in, over, under, along, and across,” with express ingress and egress. Third, the purpose clause closes with a catch-all — “any actions related or incidental to the foregoing” — that guards against the narrow, purpose-bound reading Texas courts apply. Marcus Cable, 90 S.W.3d at 700–01.

The termination and clean-up mechanic is correspondingly light:

“The Construction Easement … shall automatically expire and terminate … upon the earlier of: (i) completion of the Project, (ii) the filing of a release of the Construction Easement executed by the parties; or (iii) [_____ (_)] years after the date of recording …. Upon completion of the Project, Grantee … shall clean up and remove all construction debris and materials relating to the Project.”

For the developer, this is close to ideal: termination on completion (not on some earlier interim deadline), a negotiable outside date, and a restoration obligation limited to removing debris rather than rebuilding the burdened owner’s improvements. The form also recites that the agreement is appurtenant to and runs with both tracts — exactly the durability a benefitted tract wants. The one drafting caution this form illustrates: its governing-law clause pointed to a different state than the one in which the land sits, a classic recycled-form artifact. Always confirm governing law and forum match the situs.

Example 2 — A heavily negotiated, grantor-protective recorded agreement

This recorded TCE was used on a multifamily project where the developer needed to grade an adjoining tract, relocate a private sanitary sewer line, and re-landscape. The grant is narrower and bristles with grantor protections:

”… hereby grants … to the Grantee and its respective agents, employees, and contractors (the ‘Benefitted Parties’), a temporary, non-assignable, non-exclusive construction easement above, beneath and on the Easement Area … for the sole purposes of: (i) grading …, (ii) relocating the Sewer Line …, and (iii) making any necessary plantings … (collectively … the ‘Project’). Grantee shall complete the Project strictly in accordance with the plans and specifications attached hereto as Exhibit D (… the ‘Approved Plans’).”

Several choices cut against the benefitted tract and are worth recognizing so you can negotiate them. The easement is non-assignable — a successor owner of the project tract still takes it (the agreement separately runs with the land), but the developer cannot carve it off and assign it independently; confirm the “Benefitted Parties” definition actually reaches every contractor and consultant who needs access. The purposes are limited to a closed list with no incidental catch-all, and performance is locked to Approved Plans, which means change orders may require the grantor’s cooperation. The agreement also layers in express conduct restrictions:

“(i) in no event shall Grantee or the Benefitted Parties store equipment or materials upon the Easement Area, (ii) in no event shall Grantee impede … Grantor’s access to the Grantor Property or any of Grantor’s driveways …, and (iii) in no event shall Grantee impede … Grantor’s continued and uninterrupted use of the sewer systems benefiting Grantor’s Property ….”

A no-storage restriction can be a real operational problem on a tight site; a developer relying on the easement area for laydown needs to negotiate that out or secure staging elsewhere.

The completion mechanic is aggressive, with a two-tier deadline:

“Grantee must fully complete the Project within three hundred and sixty (360) days following the commencement of construction activities …; provided, however, the Grading Work and the Sewer Relocation Work shall be fully completed within twenty-one (21) days ….”

A twenty-one-day hard deadline for grading and sewer relocation leaves no room for weather or differing site conditions; the benefitted tract should pair any short interim deadline with force-majeure tolling.

Finally, the agreement stacks the risk-allocation provisions a protective grantor will ask for: commercial general liability of $1,000,000 per occurrence / $2,000,000 aggregate, statutory workers’ compensation, and a $5,000,000 umbrella, all naming the grantor as additional insured, primary and noncontributory; a performance and payment bond equal to 125% of the estimated project cost; an assignment of contractor warranties plus a one-year general-contractor warranty; and the developer’s own warranty, guaranty, and indemnity surviving for three years. None of these is unreasonable on its face, but together they are a significant cost and credit commitment. The benefitted tract should scope each to the actual work — a $5MM umbrella and a 125% bond may be appropriate for a sewer relocation under an occupied building and overkill for routine grading.

A short drafting checklist for the benefitted tract

Reading the two forms together yields a compact list for the developer’s side of a TCE:

1. Describe the purpose broadly and close with an incidental catch-all. Avoid a closed list that a court will read against you.
2. Survey and exhibit the easement area. Indefinite areas are unenforceable in Texas and invite disputes everywhere.
3. Extend the grant to contractors, agents, and successors — and, where possible, make it assignable, not “non-assignable.”
4. Tie the term to completion with a negotiated outside date, and resist short interim deadlines unless paired with force-majeure tolling.
5. Define restoration objectively and cap it at debris removal and pre-construction condition.
6. Make it appurtenant and record it, so the right survives a sale and is title-insurable.
7. Scope insurance, bonding, and guaranty obligations to the actual work rather than accepting a grantor’s full protective stack by default.
8. Confirm governing law and forum match the situs of the land.

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Citations

Texas

• Marcus Cable Assocs., L.P. v. Krohn, 90 S.W.3d 697 (Tex. 2002)
• Drye v. Eagle Rock Ranch, Inc., 364 S.W.2d 196 (Tex. 1963)
• Shipp v. Stoker, 923 S.W.2d 100 (Tex. Civ. App.—Texarkana 1996, writ denied)
• Tex. Bus. & Com. Code § 26.01 (statute of frauds)
• Tex. Prop. Code § 5.021 (conveyance of an interest in land)

Missouri

• Engelhardt v. Gravens, 281 S.W. 715 (Mo. 1926)
• Three-O-Three Invs., Inc. v. Moffitt, 622 S.W.2d 736 (Mo. App. 1981)
• Gowen v. Cote, 875 S.W.2d 637 (Mo. App. 1994)
• Mo. Rev. Stat. § 432.010 (statute of frauds)