Rail Lines, Easements, and Access: Key Issues for Michigan Commercial Property Owners

Railroads still play a major role in Michigan commerce, land use, and redevelopment because the state has about 3,600 miles of rail corridors operated by 29 railroads, including four Class I railroads. For owners of commercial and industrial property, a rail line near the site can affect access, title, development plans, and liability in ways that are easy to miss until a transaction or dispute is already underway.

These are not rare, theoretical issues. Oxbridge Legal Services has handled matters involving rail adjacent industrial sites, historic easements, and access disputes, and has seen how quickly these “back of the parcel” problems can derail an otherwise solid deal.

Why Railroads Still Matter

Railroads helped shape many of the property and regulatory doctrines that continue to affect Michigan law today, especially in disputes involving rights-of-way, public use, and access. In Michigan, rail corridors continue to intersect with industrial parks, warehouses, redevelopment sites, and other commercial parcels, which makes rail-related due diligence a practical business issue rather than a historical curiosity.

A parcel that appears to simply “back up to the tracks” may actually be burdened by a recorded easement, affected by a private crossing arrangement, or subject to use restrictions tied to an older right-of-way instrument. Those issues can limit where a building can expand, whether trucks can cross the tracks, or how a buyer and seller allocate risk in a purchase agreement.

Understanding Railroad Property Rights

A railroad’s interest in land is not always outright ownership. Depending on the original conveyance, the railroad may hold fee simple title, an easement, a leasehold, or some other limited right to use the corridor for railroad purposes. In some cases, the railroad’s property interest may not appear clearly in a routine title search, which is why careful review of historical deeds, easements, and right of way documents is essential. For example, a standard 30 year title search look back in Michigan will not reveal a railroad deed from 1890, even though that instrument may still control how the corridor can be used today.

That distinction matters. If the railroad owns the land in fee simple, the corridor may remain entirely under railroad control unless and until it is sold or otherwise conveyed. If the railroad instead holds only an easement, the underlying title may remain with the adjacent or original landowner, but the easement can and typically will impose significant restrictions on use of the burdened property.

Many rail corridors were established decades ago through deeds, condemnation proceedings, or public grants, and the controlling documents are often old, technical, and easy to overlook in a standard transaction review. That is why rail-adjacent property often requires a closer look at title commitments, historical instruments, and surveys than a buyer might expect.

Issues That Commonly Arise in Michigan Deals

Recorded Easements and Setback Problems

Recorded railroad easements may restrict construction within a certain distance of the tracks, reserve access rights to the railroad, or prohibit uses that interfere with rail operations. A buyer who plans an addition, new parking layout, or utility work may discover that the usable area of the site is smaller than expected once those recorded rights are reviewed carefully.

Access Requirements

Work near an active rail corridor usually cannot proceed without the railroad’s consent, and the railroad will have a defined process for applying for and receiving that consent. Accessing railroad property without permission may be treated as criminal trespass, in addition to creating significant safety and liability risks. Consider the legal impact if someone who was directed to enter the corridor without permission were struck by a train (they could easily be killed), and the exposure will not be limited to the injured person and the railroad, but can also extend to the business that sent them onto the property in the first place

In addition to obtaining formal approval or right of entry from the railroad, contractors are frequently required to carry specialized railroad protective liability insurance for any construction or maintenance within a set distance of the tracks. This type of policy is project specific and is designed primarily to protect the railroad from claims arising out of the contractor’s work, which is why it sits on top of, rather than replacing, a contractor’s general liability coverage.

Crossings

Some commercial parcels depend on public or private grade crossings for practical access. When that is the case, owners should confirm whether a crossing agreement exists, who is responsible for maintenance, and whether improvements or changes could trigger additional approval requirements.

Rail crossing safety remains an active regulatory concern, and current safety messaging continues to emphasize the need for heightened caution around crossings for both drivers and pedestrians. For a business owner, that safety overlay can become a contract issue when leases, purchase agreements, or development plans assume access that is subject to rail-related restrictions.

Spur Tracks and Industrial Use

Industrial and logistics properties may rely on spur tracks or shared rail facilities that serve multiple users along the same corridor. In those settings, maintenance obligations, scheduling conflicts, indemnity provisions, and insurance requirements should be reviewed as carefully as any other material contract term because disruption in rail service can affect operations immediately.

Abandonment and Corridor Conversion

An “abandoned” rail line is not always simple from a title perspective. Corridor status may involve formal federal abandonment procedures, railbanking, or conversion to trail use, and those categories can affect whether rail rights have actually ended or remain preserved for future use. If there has been no formal federal abandonment, it is usually safer to assume the line is not truly abandoned, regardless of how it looks on the ground. For buyers and developers, that means assumptions about reversion, unrestricted redevelopment, or automatic ownership of a former corridor can be risky unless both the chain of title and the corridor’s regulatory status are confirmed. Even a rail line that has not seen trains in years, and where the track has been removed, may still not be legally “abandoned,” which means railroad rights or federal jurisdiction could remain in place despite appearances.

Contract Review Points for Business Owners

Rail-adjacent risk often shows up most clearly in contracts. A purchase agreement should allow adequate time to review title exceptions, crossing agreements, survey matters, and any railroad-related access issues before the buyer is locked into the deal.

Commercial leases should address who bears responsibility for compliance, maintenance, insurance, and indemnity when the premises depend on a crossing, loading configuration, or access route affected by the railroad corridor. Construction and development contracts should also account for possible railroad approvals, protective services, flagging requirements, or scheduling delays if work is planned near the tracks. These delays can be substantial in duration.

A Practical Due Diligence Checklist

Before purchasing, leasing, or redeveloping rail-adjacent property in Michigan, business owners should consider the following:

• Obtain and review all recorded easements, rights-of-way, crossing agreements, and title exceptions affecting the property.

• Confirm whether the railroad’s interest is fee ownership or an easement, because that distinction can materially affect development rights and long-term control.

• Order a current survey showing the rail corridor, easement boundaries, and the location of existing and proposed improvements.

• Verify whether any nearby corridor is active, formally abandoned, railbanked, or converted to trail use.

• Review leases, service agreements, and construction documents for indemnity, insurance, and maintenance obligations tied to rail access or facilities.

• Identify early whether planned work near the tracks will require railroad approval or create delays that affect project timing and cost.

• Confirm that insurance requirements for railroad property are satisfied, including any Railroad Protective Liability coverage, because a standard CGL policy may leave a coverage gap for claims within 50 feet of railroad property. The insurer can and will deny those claims if the proper rider to include such coverage is not in place.

Why Early Review Matters

Railroad issues often look minor at the start of a transaction because they may appear in older title documents, surveys, or access arrangements rather than in the main business terms. But once they affect ingress and egress, buildable area, redevelopment plans, or liability allocation, they can become central to the deal.

For Michigan business owners, investors, and tenants, early legal review can help identify whether the property is truly usable for the intended purpose and whether the transaction documents properly allocate the risk. In many cases, the best time to address a railroad easement issue is before closing, before construction begins, and before a dispute develops.

Closing

Michigan businesses continue to operate, expand, and invest along active and former rail corridors, and those locations can create both opportunity and legal complexity. Careful attention to title, easements, access rights, and contract language can help owners avoid costly surprises and make better decisions about purchase, leasing, and development strategy.

Oxbridge Legal Services combines a Michigan business law practice with focused experience in railroad law and rail adjacent real estate. The firm has represented clients in matters involving railroad easements and rights of way, private and public crossings, corridor status and “abandonment” issues, and disputes over access and redevelopment of former railroad property. By integrating this railroad specific experience with day to day work on commercial leases, purchase agreements, operating agreements, and litigation, Oxbridge Legal Services helps Michigan businesses navigate both the rail related nuances and the broader business implications in a single, coordinated strategy.