Does your driveway cross through someone else’s property? Or do you have a verbal agreement to access property that isn’t yours? In Colorado, if an easement has not been legally recorded, meaning it hasn’t been filed with the county clerk and recorder, its validity may depend on whether the property owner has notice of the easement, unless the easement was created by implication or prescription. Recording an easement makes it part of the public record, automatically providing constructive notice of the easement to third parties.

Below are some of the risks and potential repercussions for failing to record an easement.

Potential Loss of Rights

Colorado is a “Race-Notice” state, meaning that a later buyer of real estate can show a priority interest in a title dispute against an earlier buyer if the later buyer records their deed before the first buyer, they essentially win the “race to the courthouse” – so long as the later buyer is both a “bona fide purchaser” and is without notice of the earlier buyer’s claims. 

The Race-Notice statute applies broadly to all agreements and instruments affecting title to real property, including easements, with narrow exceptions. Essentially, this means that if you have an unrecorded agreement to cross a neighbor’s land and that neighbor sells their property to someone who does not know that agreement exists, unless a narrow exception applies, the new owner may legally block your access and extinguish the easement.

Financing and Title Insurance Difficulties

Many lenders will not issue a mortgage on a “landlocked” property, to which an unrecorded easement is the only access. This is because the lender cannot guarantee legal access to the property, a significant hurdle for financing.

Additionally, title insurance companies rely heavily onpublic records when issuing insurance policies. Because unrecorded easement do not show up on the record and are often excluded from coverage, unless an exception is removed or the policy holder gets additional endorsements, they are frequently not insured. If a dispute arises later, you maynot have insurance protection to fight it.

“Notice” Exception – When Unrecorded Prevails

In some instances, there is an exception that will allow an unrecorded easement to stand, if the new owner has “actual” or “constructive” notice. An “active” notice is direct, personal knowledge of an easement, such as the seller informing the buyer that a neighbor has a right to use a path or driveway or a signed easement agreement between two parties.

A “constructive” notice is when an easement is so physically obvious, such as a paved driveway or visible utility lines, that any reasonable person is expected to have asked about the incursion. For example, if a buyer sees a road crossing the property they’re purchasing, they are considered legally “on notice” to investigate the access even if it’s not recorded. Recording an easement also constitutes constructive notice.

Constructive notice creates a duty to investigate, whereas actual notice confirms direct awareness.

Costly Legal Battles

If a property owner decides to challenge an unrecorded easement, the person using the easement may be required to appear in court to defend their access and establish the existence of the easement, usually under more difficult legal theories to prove. Examples include:

• Easement by Necessity: The user must prove the land is not accessible by any other means.
• Prescriptive Easement: Someone can legally use another’s land (like a path or driveway) without permission if the use is open, notorious, continuous, and adverse (without owner consent) for a full 18 years. A prescriptive easement grants nonpossessory right of way, not ownership.
• Easement by Prior Use: The user must prove the land was once one parcel and the use was intended to be permanent.

These court cases are often very expensive, often costing tens of thousands of dollars in legal fees.

Permissive Use vs. Permanent Rights

Unrecorded easements are often considered “handshake” deals, and may be legally classified as a license instead of an easement. Colorado generally allows for licenses to be revocable at any time by the landowner. This means that if someone spent money to build a driveway across a neighbor’s property based on a verbal agreement, the driveway builder could lose that investment if the neighboring property owner properly revokes the license.

Bottom Line: An Unrecorded Easement is Ultimately not a Guarantee

Whether you’re the property owner allowing unrecorded access to your property, or you’re accessing your own property via an unrecorded easement  agreement, there are risks involved for both parties. 

If you’re uncertain about an unrecorded easement already in place or are looking at a property where an easement could be an issue, we can help. Contact us today for a consultation.