Apart from the outright purchase of a site, there are generally three different ways to achieve site control: easement, lease or option. An easement is an interest in land in the possession of another that entitles the holder of the interest to a limited use or enjoyment of the land. A lease is a conveyance of land for a term that is less than the term of the owner’s interest. An option provides for the exclusive right to lease property or obtain certain easement rights at some time in the future.
Easement. An easement may be either exclusive or non-exclusive. Under an exclusive easement the easement rights are exclusive to the holder. If easement is nonexclusive others could have the right to use the land concurrently. It should be noted that the grantor of an easement relinquishes very few rights even if the easement is exclusive. Easements for a short period of time are sometimes referred to as temporary easements. The rights granted under an easement may be permanent or for a set period of time. Finally, payment for an easement can either be in a lump sum or through periodic payments.
Lease. A lease creates a landlord/tenant relationship. The tenant usually has exclusive use of the property covered by the lease. If the landlord wants to retain rights to use land, such rights must be specifically stated. Unlike an easement, a lease is always for a set period of time. Lease payments are usually periodic.
Tip: In addition to the notes above, easements and leases differ in subtle ways, including treatment in bankruptcy court and tax foreclosure. Also, in some states, leases for a term greater than 35 years (including extensions) may be considered a conveyance.
Option. An option provides for the exclusive right to lease property or obtain certain easement rights at some time in the future. The right must be exercised within a specified period of time. The time period can vary from several months to several years (3-5 years is common). The option provides for some form of payment for the option rights being preserved. Most importantly, an option typically allows the developer to walk away for any reason within the option period.