Yes, a profit generally runs with the land, meaning that the right to extract resources from a property remains valid and enforceable against subsequent owners of that land. This ensures the profit holder's right persists despite changes in the land's ownership.
Understanding "Runs with the Land"
When a right or burden "runs with the land," it signifies that it is an inherent part of the property's legal status and is not merely a personal agreement between specific individuals. Instead, it binds future owners of the property. For a profit, this means the servient estate (the land subject to the profit) remains burdened by the profit, regardless of who owns it.
Types of Profits: Appurtenant vs. In Gross
The concept of a profit "running with the land" can be better understood by distinguishing between two primary types:
| Feature | Profit Appurtenant | Profit In Gross |
|---|---|---|
| Attachment | Benefits an adjacent or nearby "dominant estate." | Benefits a specific individual or entity, not land. |
| Transferability | Transfers automatically with the dominant estate. | Can be assigned or transferred independently by its owner. |
| Runs with Land? | Yes, both the benefit (with dominant estate) and the burden (with servient estate) | Yes, the burden runs with the servient land, but the benefit is personal and transferable, not tied to another parcel. |
The Nature of a Profit in Gross
Even though a profit in gross is a personal right not tied to a dominant estate, its burden does run with the land it affects. This means:
- Persistence of the Burden: A properly recorded profit will remain even if the ownership of the land upon which the profit exists changes hands. The new owner of the burdened land is still subject to the profit.
- Transferability of the Right: Unlike rights appurtenant that automatically transfer with a specific parcel of land, a profit in gross can be assigned or otherwise transferred by its owner to another individual or entity. This makes it a valuable, transferable property right in itself.
- Independent Existence: The profit exists independently of the ownership of any other land. Its value is derived solely from the right to extract resources from the servient estate.
For example, if a landowner grants a profit in gross to a mining company to extract coal, that right remains enforceable against subsequent owners of the land, and the mining company can sell or transfer its right to another company.
Practical Implications
Understanding that a profit runs with the land has several key implications:
- Due Diligence for Buyers: Prospective purchasers of land must conduct thorough due diligence to identify any existing profits, as these will affect their rights to use and develop the property.
- Valuation of Property: Land burdened by a profit may have a reduced market value compared to unencumbered land, depending on the scope and impact of the profit.
- Enforcement of Rights: The holder of a profit has a legally enforceable right to access and extract resources from the burdened land, even if the ownership of that land changes frequently.
- Recording Requirements: For a profit to effectively run with the land and bind future owners, it must be properly created and recorded in the land records. This provides constructive notice to all subsequent purchasers.
Recording and Enforcement
To ensure a profit effectively "runs with the land" and is enforceable against future owners, it is crucial that it is:
- Created in Writing: Profits are interests in real property and, therefore, typically require a written agreement to be legally valid.
- Properly Recorded: Recording the profit in the public land records provides notice to all future purchasers and creditors, ensuring the right is preserved across ownership changes. Without proper recording, a profit might not be enforceable against a bona fide purchaser without notice.
Land Law
