Definition
A non-possessory interest is a property right that doesn't include the right to current possession, such as easements, covenants, liens, remainders, and reversions. Valuable despite lacking control.
Not sure where this fits?
Answer a few questions and we’ll open the path that fits, at the right step.
Find my pathAbout this term
Non-possessory interests give rights in property without control of it. An easement holder can use property for a specific purpose but the owner retains control. A lienholder (like a mortgagee) has a financial interest but not possession rights unless the debtor defaults. A covenant restricts property use without giving the covenant holder possession. Remainder interests and reversionary interests are non-possessory (the current owner controls the property). Non-possessory interests are less valuable than possessory interests but still have monetary value. They can be bought, sold, mortgaged (if mortgageable), and inherited. Non-possessory interests can burden property—easements and covenants run with the land, binding future owners. Title insurance typically covers non-possessory interests; title companies insure against the existence of undisclosed easements, covenants, and liens. Understanding non-possessory interests is crucial because they can seriously limit how you can use your property. A property might be subject to utility easements, conservation easements, and neighboring use rights, all of which are non-possessory.
Pro Tip
Carefully review your title report for non-possessory interests. They can significantly affect property value and your ability to use, sell, or refinance.
Example
Your neighbor has an easement to use a utility line that runs across your property. The neighbor has a non-possessory interest—they can use the line but you control the property and can't disturb the easement.