Request By:
Mr. Max Bohrer
Chief, Real Estate Division
Department of the Army
Louisville District
Corps of Engineers
P.O. Box 59
Louisville, Kentucky 40201
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
A question has arisen in connection with federal land acquisitions for the Taylorsville Lake and Smithland Locks and Dam projects as to whether county clerks should collect the real estate transfer taxes when deeds of easement are presented for recordation.
You specifically request our opinion as to the application of KRS 142.050(1)(a), which statute reads:
"(1) As used in this section, unless the context otherwise requires:
"(a) 'Deed' means any document, instrument or writing (other than a will and other than a lease or easement) , regardless of where made, executed or delivered whereby any real property in Kentucky, or any interest therein, is conveyed, vested, granted, bargained, sold, transferred or assigned."
The excepted word "easement" was placed in the statute by the 1970 amendment [1970 Acts, Ch. 161, § 1].
Clearly the legislature intended to except "easements" from the deed transfer tax. The question now is what is the nature of an "easement" under Kentucky law?
The nature of an "easement" is dealt with precisely and definitively in
Henry Bickel Co. v. Texas Gas Transmission Corp., Ky., 336 S.W.2d 345 (1960) 347:
"While an easement is property in the nature of land it is an incorporeal right, separate and distinct from the right to occupy and enjoy the land itself.
Lyle v. Holman, Ky., 238 S.W.2d 157. An easement is a right distinguished from ownership.
Inter-County Rural Electric Cooperative Corporation v. Reeves, 294 Ky. 458, 171 S.W.2d 978; 17 Am.Jur., Easements, sec. 2, p. 617. It is not a normal incident of a possessory land interest. Powell, Real Property, Vol. 3, sec. 405. It is a privilege or an interest in land,
Asher v. Johnson, 118 Ky. 702, 82 S.W. 300, but it is not an estate in land nor is it "land" itself, Powell, Real Property, Vol. 3, sec. 405;
Chicago, R.I. & P. Ry. Co. v. City of Ottumwa, 112 Iowa 300, 83 N.W. 1074, 51 L.R.A. 763."
From the case adopted definition, an easement, though a privilege or an interest in land, is not an "estate" in land, nor is it land itself.
The federal courts recognize this Kentucky case law that the holder of an easement enjoys not the land itself or ownership of the land, but merely an incorporeal right respecting the property, separate and distinct from the right to occupy and enjoy the land itself.
Tenneco, Inc. v. May (U.S.D.C. E.D. Ky. -1974) 377 F.Supp. 941; and
Tenneco, Inc. v. May (U.S.C.A. -6, 1975) 512 F.2d 1380, affirming.
Easements may be created by: (1) express written grant, (2) implication, (3) prescription, or (4) estoppel.
Grinestaff v. Grinestaff, Ky., 318 S.W.2d 881 (1958) 884.
It is our opinion in general that any easement meeting the case law definition set forth in Henry Bickel Co., above, is an exception to the real estate transfer tax of KRS 142.050.
You have enclosed an extract of an easement granted to the United States relating to the Taylorsville Lake project. The granting clause purports to vest a perpetual easement and right of way over and across certain land for the location, construction, operation, and maintenance of roads etc. It is our opinion, under Bickel above, that at the most such instrument creates an easement, and not an estate in land. There is no attempt to create a fee simple title or any lesser estate of any kind. Cf.
Girtley v. Cowley, Ky., 418 S.W.2d 658 (1967), where the evidence indicated a conveyance in fee simple.
You also enclosed another extract from an easement to the United States. It purports to grant to the United State a flowage easement as relates to certain lands. It purports to grant to the United States a perpetual right, power, privilege, and easement occasionally to overflow, flood and submerge certain tracts of land. You explained by telephone that the language relating to existing structures was merely designed to assure the United States that its easement would not be obstructed by any existing structures of any kind, as determined by the United States, including buildings for human habitation. Any structures within the easement zone not interfering with the easement rights of the United States could remain. Any structures so interfering could be removed by the United States, subject to constitutional compensation.
Here again it is our opinion that such an instrument only carries with it the right of easement.
Thus we conclude that such easement instruments are not subject to the real estate transfer tax of KRS 142.050.
OAG 68-235, which concludes that a deed of easement is subject to the tax, is withdrawn for reasons given in this opinion.