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With the recession behind us, there is a renewal of real estate development. Developers and their counsel need to focus again on a traditional property concept: the merger doctrine. This doctrine creates an issue for developers when there is an easement over a servient estate and a subsequent party acquires title to both the dominant and servient estates. The concern is whether the applicable jurisdiction would apply the merger doctrine, commonly recognized in the context of the same party's acquiring both a fee simple interest and a mortgage interest in the same property, if instead one party acquires both the servient and dominant estates. As with the mortgage, is the easement extinguished? A related issue is whether anti-merger language in the deed or even the easement itself would change the result in a state inclined to apply merger. Given the possible unintended adverse effect this doctrine could have on property rights, developers should know how to address this problem. With a concentration on the author's local jurisdictions (Virginia, Maryland, and the District of Columbia), this article discusses how the law may provide solutions to real estate development problems caused by the merger doctrine.
Easements and the Merger Doctrine
Maryland and Virginia law have long held that "where one becomes the owner of the dominant and servient estates, and there was no one else entitled to either, they were merged and the easement was extinguished." Kelly v. Nagle, 132 A. 587,590 (Md. 1926) (citing Capron v. Greenway, 22 A. 269, 293 (Md. 1891)). In other words, when the owner of the dominant estate also becomes the owner of the servient estate, the property is subject to the merger doctrine and the easement no longer exists on the servient property.
Case law addressing whether or not an anti-merger clause in a deed (or easement) prevents the easement from becoming part of the dominant estate is very scarce. This scarcity needs to be recognized and addressed as further discussed below. For example, real estate developers can address the merger doctrine by re-creating the easement that was extinguished in a subsequent conveyance of the property. See Lindsay v. Annapolis Roads Prop. Owners Assn, 64 A.3d 916, 928 (Md. 2013).
Some courts have also allowed implied easements for real estate...