"Of Record" Easements Survive Tax Foreclosure Sales: A Recent Appellate Decision

This week we wanted to draw your attention to an interesting decision from the Appellate Division, Second Department which reversed a Lower Court’s decision and remanded the case back to the Supreme Court to enter an amended Judgment in favor of defendant and declaring that the plaintiff's rights in and to the property are subject to the recorded easement for maintenance of the Williamsburg Bridge. 
The relevant facts of, as well as a link to, the case are set forth below:

The parcel of Real Property (the “Property”) central to the case was first conveyed to Mr. Joshua Guttman by recorded deed dated July 12, 1983, which noted that the property was subject to an easement for maintenance of the Williamsburg Bridge.   The Property was later conveyed to Berry-Bridge Corp. by deed dated February 11, 1987, which recorded deed also referenced the easement for maintenance of the Williamsburg Bridge.   Thereafter, in or about 1992, the State of New York purportedly acquired the Property by eminent domain for the benefit of the Defendant,  City of New York. However, the notice of appropriation was recorded against a different and unrelated property, and the City continued to charge property taxes against the prior owners; who did not pay them.  In or about May 2019, the Plaintiff purchased the Property at a tax lien foreclosure sale and the Property was conveyed to the Plaintiff by a referee's deed dated June 3, 2019.  While the referee's deed did not reference the easement or otherwise state that the Property was encumbered by the easement, it is important to note that the judgment of foreclosure and sale dated January 31, 2019, directed the referee to convey the Property "subject to . . . any covenants, restrictions, declarations, reservations, easements, right of way and public utility agreements of record." In addition, the terms of sale of the Property at the tax lien foreclosure sale also stated that the Property was "being sold subject to . . . [c]ovenants, restrictions, easements, declarations, reservations, rights of way, and public utility agreements of record, if any."  (Citations omitted).

In reversing the Lower Court’s Order, which had granted Plaintiff’s summary judgment holding that Plaintiff held title to the Property and that it has exclusive rights to the possession, use, and enjoyment of the subject Property to the exclusion of all others (ie. not subject to the easement), the Appellate Court reasoned that because the easement for maintenance of the Williamsburg Bridge set forth in the recorded deeds dated July 12, 1983, and February 11, 1987, was "of record," the referee did not have the authority to convey the property to the plaintiff without the Property being subject to that easement, and the plaintiff was thus on notice that the Property was sold subject to that easement.  Moreover, the Court stated that because "[o]wners of a servient estate are bound by constructive or inquiry notice of easements which appear in deeds or other instruments of conveyance in their property's direct chain of title.

To view the case, click the link below:
https://www.nycourts.gov/reporter/3dseries/2025/2025_01076.htm