Negotiating the conveyance of land rights with an experienced negotiator is often difficult and confusing at best. Terms such as temporary construction easement, slope easement, and fee simple interests are thrown around as if the public knows what they mean. Some terms also have acronyms (“TCE” for temporary construction easements or “SE” for slope easements), which further confuse matters. Below we will address some of the more frequently asked questions that we receive from property owners negotiating with pipeline companies prior to the filing of an eminent domain case.
Q: What is the difference between a fee simple interest, easement, and right-of-way?
In its simplest form, fee simple refers to the complete ownership of all rights in land. By way of example, if a pipeline company decided to acquire an entire property, it would request a conveyance of the fee simple interest.
An easement, or right-of-way (which is a type of easement), allows someone to cross or otherwise use another person’s property for a specified purpose. For example, if an individual wanted to allow his or her neighbor to cross their property to get to a pond or lake, the property owner would grant the neighbor an easement. The individual still owns the property, but the neighbor can use it for this limited purpose.
The rights acquired by a pipeline company will generally be in the form of right-of-way. If a pipeline company wants to run a pipeline underground through a property owner’s backyard, it would ask for a right-of-way to allow them to install the pipeline and return to the property if necessary for maintenance and repairs. The owner would still own the property, but the pipeline company would have the right to use it for the pipeline.
When it comes to eminent domain and construction projects, certain special easements are sometimes necessary. For example, if the new construction requires the property to be regraded, the pipeline company has to pay for a slope easement. If certain utilities need to be moved (ie. power lines), the pipeline company may have to acquire a utility easement from the owner to relocate a utility pole. It is important to understand each and every right being taken.
Q: When the pipeline is being constructed, does the pipeline company have the ability to walk across any part of my property?
The answer is no. In order for the pipeline company to enter any part of the property, it must obtain legal rights to do so. Generally, pipeline companies will need a work area that is larger than the actual easement area since contractors will need to work on either side of the pipeline as a trench is being excavated. To obtain these rights, the pipeline company will acquire (and pay for) a “temporary construction easement.” When negotiating the temporary construction easement, it is important to clearly set forth the area to be used by the pipeline company and how long they will have a right to use the area. The timetable for the project is important to know.
Q: Does a property owner have to allow the pipeline company to survey his or her property?
The answer is no. Without a court order or a property owner’s consent, a pipeline company cannot allow its surveyors to conduct surveys or inspections of the property. If an individual is concerned about trespass, he or she should be proactive and send a letter to the pipeline company confirming that he or she is not providing consent for any surveying or testing.
Q: Does a property owner have to negotiate with the pipeline company for a voluntary sale of an easement or fee simple interest?
The answer is no. There is no obligation to negotiate with the pipeline company. Do not allow a pipeline negotiator to pressure you to make a counter-offer if you do not want to do so.
Q: Does a property owner need an attorney and appraiser to negotiate with the pipeline company?
Pipeline right-of-way agreements can be complicated documents which often contain confusing clauses. Although there is no legal requirement to have a lawyer review any agreement, it is a good idea. It is extremely important to know what rights a property owner is conveying and what rights and obligations the pipeline company will be granted.
For example, is the right-of-way limited to one pipeline or more? Is the owner limited from using the area over the pipeline for a future driveway or landscaping? Does the pipeline company need to provide the property owner with notice when a repair is necessary? These are just a few examples of issues that need to be addressed in the agreement.
Although there is no obligation to hire an appraiser to review the offer, it is often difficult to measure the damages to the property being retained. The pipeline company must pay for the property it is acquiring, and also for any damages to the property they are retaining, known as severance damages. Calculating severance damages are challenging to even the best appraisers.
Q: What should a property owner do if he or she feels the pipeline negotiator is putting too much pressure to sell?
Pipeline companies employ experienced negotiators to acquire property rights.
Generally, they are good at their job. However, in certain cases, they put undue pressure on a property owner to complete a transaction. It is extremely important for property owners to remember that time is on their side. There is no reason to rush negotiations for a fee simple or right-of-way. The easement will be placed on the property and may have a significant impact on present and future use. In the event the pressure is too much, simply terminate the negotiations and wait for an eminent domain action to be filed.
For additional information concerning negotiating a pipeline easement, contact Timothy P. Duggan at Stark & Stark at (609) 895-7353, or by email at dug@stark-stark.com. Stark & Stark offers free consultations for all condemnation matters.
This article was originally written by Timothy Duggan on NJ.com. Here is a link to the original post.
