Reciprocal Easement Agreement (REA)

Understanding Reciprocal Easement Agreement (REA)

A Reciprocal Easement Agreement (REA) is a binding legal contract that permits the owners of adjacent properties to share certain rights and responsibilities related to their parcels of land. An REA typically addresses aspects such as shared access roads, parking facilities, driveways, and utilities—elements crucial for the effective use and operation especially in commercial developments like shopping centers, office complexes, and mixed-use developments.

Key Components of an REA:

1. Access Rights: Grants right of way for ingress and egress across both properties.
2. Parking Arrangements: Shared parking structures or areas.
3. Utilities: Use of shared utilities such as water, sewer, and electrical systems.
4. Maintenance Responsibilities: Allocation of maintenance costs and duties for shared spaces.
5. Use Restrictions: Limitations on certain uses to protect mutually beneficial use of shared resources.

Examples of Reciprocal Easement Agreements:

1. Shopping Center Scenario:

   • Description: A reciprocal easement agreement allows parking and traffic flow between an anchor tenant’s parcel and the surrounding inline stores owned by the shopping center.
   • Result: The shared parking areas and drive lanes ensure ease of movement for customers, thus benefiting all retail tenants by enhancing customer experience and boosting foot traffic.

2. Office Complex:

   • Description: Two adjacent office buildings enter an REA to share a central courtyard and underground utilities.
   • Result: Both office complexes save on the costs of constructing and maintaining individual courtyards and infrastructure, fostering a unified aesthetic and operational synergy.

Frequently Asked Questions (FAQs) about REAs

1. Why are reciprocal easement agreements important in commercial real estate?

   • Answer: They facilitate the shared use of essential infrastructure, improving operational efficiency and site functionality, which can enhance tenant satisfaction and property value.

2. Who typically benefits from an REA?

   • Answer: Both property owners benefit, as well as their tenants and customers, through improved access, shared amenities, and reduced redundancy in infrastructure and maintenance.

3. Can an REA be altered or terminated?

   • Answer: Yes, but alterations or terminations usually require mutual consent of all parties involved and potentially renegotiating terms based on current needs or circumstances.

4. Is an REA binding on future property owners?

   • Answer: Typically, yes. REAs often run with the land, meaning they are binding on future owners as long as the agreement remains in effect.

Related Terms with Definitions

• Easement: A non-possessory right to use another person’s land for a specified purpose.
• Right of Way: A type of easement granting the holder the right to travel across another’s land.
• Servient Estate: The parcel of land that is burdened by an easement.
• Dominant Estate: The parcel of land that benefits from an easement.
• Covenant: A formal agreement or promise in a written contract or deed between parties.

Online Resources

• Investopedia: Reciprocal Easement Agreement (REA) Explanation
• Nolo: Understanding Easements
• American Bar Association: Guide to Commercial Real Estate Transactions

References

• Posner, Richard A. “Economic Analysis of Law.” Aspen Publishers.
• Callies, David L., et al. “Land Use Law & Zoning Digest.” American Planning Association.
• Singer, Joseph W. “Property Law: Rules, Policies, and Practices.” Aspen Publishers.

Suggested Books for Further Studies

• Ratcliffe, John and Michael Stubbs. “Urban Planning and Real Estate Development.”
• Millington, Alan F. “An Introduction to Property Valuation.”
• DiPasquale, Denise and William C. Wheaton. “Urban Economics and Real Estate Markets.”
• Faber, Michael J. “Easements Relating to Land Surveying and Title Examination.”

Real Estate Basics: Reciprocal Easement Agreement (REA) Fundamentals Quiz