Tips for Negotiating Easements
If you are a landowner in Oklahoma, if you haven’t already, at some point you may be approached with an offer to place a pipeline across your property. Commonly, pipelines must cross private land and a pipeline easement must be negotiated. For some owners, monetary compensation becomes the main concern when negotiating the easement. For others, more specifically farmers and ranchers, who’s business and sweat equity has been invested in the land, the negotiated terms of the agreement may be more valuable than the cash payment offered.
Because each tract of land is unique, with various uses and characteristics, landowners should consider several options for easement negotiations.
1. Consider the laws in place that may restrict negotiations on the easement: upon receiving an offer for pipeline construction, a landowner should determine if there are any laws in place that might restrict their ability to negotiate. Pipeline companies may be granted the power of eminent domain, allowing them to take private property for public use once compensation is paid to the landowner. Entities with eminent domain power may be less likely to negotiate. Even without eminent domain power, some states have enacted surface damages acts or other laws and regulations that may limit the negotiation of an easement in scope or in duration.
2. Determine and specify compensation for the easement: the pipeline company will offer compensation for the easement, which may be based on a sum per acre, per foot, or per rod of the pipeline. However, in some instances, the compensation offered may be a one-time lump sum payment. Landowners should consider per foot compensation to adequately cover the entire area of land requested to be used. In addition, landowners should specify when payments are due and request additional compensation if the pipeline company requests an additional temporary work area. When considering compensation for the easement, landowners should also calculate damages for any future use or uses over the easement area.
3. Request an easement that is specific and does not blanket the land: landowners should define the specific area of land for the pipeline easement and any temporary work. In addition, landowners should request a survey plat be provided prior to the work commencing and a final survey plat once the work has been completed. This will help ensure that the pipeline is placed in the specified area as denoted on the easement.
4. Limit the easement: easements should be limited to one line only. Landowners should pay close attention to the language of the easement and when possible, require the pipeline company to pay additional compensation for excess lines. In addition, the one line should be limited for the type of product it carries and landowners should require notice of any products moving through the line on their property.
5. Depth and the double ditch method: commonly, pipeline easements will state that the line will be buried at “plow depth.” However, landowners may find comfort in defining the depth of the line and therefore should request the line be buried at least 48 inches deep. In addition, landowners should request that the double ditch method is used to help preserve the topsoil of the land.
6. Specify and define surface use and access: landowners should retain a right to use as much of their surface over the easement area as possible. Commonly, surface facilities will also be placed on the land, in which case, landowners should set any necessary restrictions for the facilities out in detail in the easement and request additional compensation for the facilities placed on the land. Additionally, some pipelines will traverse across a landowner’s road or gated entry way. In this case, make sure to retain property access for all landowners while also limiting outside party access.
7. Identify damages and restoration requirements with specificity: pipelines can cause damages to the land during construction that may require compensation apart from the compensation received for the easement. Commonly, roads are damaged or need to be constructed, natural landscapes are harmed, and materials are used that may cause damage to the plants or animals. In these instances, landowners should set out in detail any reclamation requirements to put the land back to the condition it was in prior to the pipeline. Compensation for these types of damages should be negotiated as well as requesting inspections to ensure sufficient reclamation as taken place.
8. Consider the need for specific fencing, gates, and guards: many landowners have agricultural businesses to protect when working with pipeline companies. Farmers and ranchers may request certain repairs and requirements for existing fences, gates and guards, if damaged. H-braces and strong wire should also be requested for fencing in any areas inside the easement and flagged stakes should be removed by the pipeline company after fencing is established.
9. Don’t overlook provisions that seem “ordinary” for easements: for easements, a large part of the provisions included may seem commonplace. However, landowners should pay careful attention to provisions for liability, indemnification, insurance, transferability, and dispute resolution, just to name a few. Landowners should also ensure they understand what can terminate the easement and specify in detail the circumstances and events in which cause the easement to terminate.
10. Seek review from a licensed, experienced attorney: pipeline negotiations can be daunting for some landowners and overwhelming for even those with some experience. A licensed attorney experienced in easement transactions can not only provide reassurance but can also help avoid disputes with pipeline company and ensure the proper and necessary protections are in place.
While this list is not all inclusive for pipeline easement negotiations, it provides a base set of considerations that all landowners should consider. Every tract of land produces different considerations for landowners, sometimes making pipeline easement negotiations burdensome.
If you are in need of advice and counsel for a proposed pipeline easement, please contact our firm at (405) 561-3170 and allow us to help you determine what protections best suit you and your land.