Council Easements - Hidden Liability

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Published by Preston Law on 05/10/2022

Councils are frequently acquiring public liability easements, especially for stormwater drainage and sewerage purposes.  Many of these easements are acquired as a result of land subdivision and associated development approval conditions imposed under the Planning Act 2016.

While Councils are certainly “acquiring” these easements, they still need to be careful they are not also ‘acquiring’ an ongoing liability for the cost of maintenance of the easement area.

Most standard Council public utility easements exclude these maintenance costs, effectively passing them to the underlying landowner.  In doing so they remove the Council from exposure to Section 85B of the Land Title Act 1994 which reads as follows:-

85B   Rights and liabilities created on registration of instrument

  • On registration of the instrument creating an easement, the easement is created and, without anything further, vests in the person entitled to the benefit of it.
  • If the easement is in favour of a public utility provider and is not a public thoroughfare easement, the registered owner of a lot burdened by the easement may recover from the public utility provider a reasonable contribution towards the cost of keeping the part of the lot affected by the easement in a condition appropriate for enjoyment of the easement.
  • The liability to contribute may be amended or excluded by agreement.

However, there are many existing public utility easements which do not contain the necessary exclusion from Section 85B(2) and where Councils are exposed to contribution payments:

Recommendations:

  1. Ensure all new Council easements exclude maintenance costs, either in the easement itself or in an associated standard terms document.
  1. Carefully check any public utility easements provided by developers or landowners. These frequently lack the necessary exclusion provisions.
  1. Review existing Council public utility easements and take any opportunities to amend these easements where Council may have significant maintenance exposure.

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