Who is acquiring your easements and rights of way?

Don’t let right of way turn into fight of way

Gerald Moran, NMI Management & Training Services

May 13, 2003 — First of all, what is the difference between an easement and a right of way? Many experts have given their opinion. The one I like the best is this: an easement is the legal granting of the right to use the land of another.

The textbook definition of an easement is: “A non-possessory interest in the land of another.” A “right of way” is what you build your plant upon. Think of a “right of way” as a corridor within which exists one or more easements such as railroad, telecommunications, electrical, natural gas, etc.

For years, telecommunication and power companies got along with verbal permission from property owners allowing them to cross the land in order to construct utility facilities of every stripe. When erecting pole lines, it was not unusual to cut across large tracts of farm and vacant land. Generally it was the responsibility of the project engineer to ask the owner if it was okay to put the pole line up or the gas or petroleum line in the ground. With a nod of the head, a shake of the hand, and sometimes a bottle of the owner’s favorite beverage, the companies were off and running delivering top quality service to the masses.

When a leasing or right of way agent from a wireless carrier offers a large monthly check in exchange for the right to erect a monopole and a hut on an owner’s property, neighbors notice and the public realizes their land has new hidden value. When this happens the owner frequently eyes the local power company’s pole line and asks him/herself: “I wonder how they got here in the first place and why aren’t they paying me too!”

Times have changed, but has your company/co-op changed? We receive calls weekly from former students who have attended our right of way seminars with questions about how to handle various trespass issues.

Let’s first discuss verbal right of way. Under the law of this country “any interest in real property can only be granted or transferred in writing.” That is called the statute of frauds and has its origin in England in 1677. Why does this apply in this country?

Because our laws are based on British common law, unless, you are in Louisiana. In Louisiana, Napoleonic law prevails.

So what does it mean when you get a verbal right of way? It means that you have a license. A license is revocable. A good example of a license is a ticket to a movie theater or a sporting event. You are given permission to occupy a certain seat for a specific time and date. If you do not comport yourself in accordance with the rules, i.e.: refrain from loud and obnoxious behavior, management has the right to revoke your “license” and remove you from the premises. In the case of right of way issues, if your license is revoked by a property owner, your organization is faced with removing its facilities at its expense.

How much of your outside plant budget is spent on relocation due to right of way issues? We did an informal survey of engineering/construction managers/directors of about two dozen companies a couple of years ago to determine that percentage. Responses ranged from a low of 22 percent of the budget to a high of 38 percent. Our survey focused on private property issues and not public right of way relocations.

If you do some quick math and arbitrarily use 30 percent as an average, what was your total outside plant construction budget last year? The result is usually very surprising.
We taught our one-week basic right of way course to a medium-size company in the eastern U.S. last year. This company used only outside plant engineers to obtain easements. I asked to see one of their easement documents and determined it was a “blanket” easement.

A blanket easement allows the easement holder to place their plant or facilities anywhere on the property. Why do companies write blanket easements? Because almost anyone, even with no expertise, can do it. There are two large problems with this kind of easement:

It is a terrible disservice to the landowner because the location is not defined. This may create difficulty in getting title insurance for subsequent owners of the property. It encumbers not only the location of the utility, but the entire property.

Courts have taken a very dim view of this “unreasonable burden” on the land. Picture yourself on the witness stand during an action against your organization. The property owner’s attorney might ask you: “You work for a multi-million/billion dollar organization. Don’t they provide you with proper training before you go out and encumber someone’s land?” How would you respond?

After determining that this was the sole right of way document used by the company, I asked the group, “How do you get landowners to sign this?” They slapped their knees and in unison responded, “We don’t.” I then asked: “You have paid the land owner $10,000 to place a large underground transformer and then taken a ‘verbal’ right of way. What happens to that transformer when the next owner of the property moves in and tells your organization to move it at its expense because you have no recorded easement? The engineers’ response? “We’ll be gone by then and it won’t be our problem!”

One thing in favor of the company in this case is that the transformer would probably be visible. This constitutes “actual notice” to the new owner. This means that the transformer may stay at its present location but no change in size nor location is permitted. The company is only entitled to maintain its plant at its current location-maybe. It depends on the courts, if it should go that far.
The stories go on and on about right of way issues and how much they cost companies across the country. It is not limited to power companies. The Telco industry has similar problems with their distribution network.

Earlier, I referred to a recorded easement. You can obtain a written easement and it is valid as long as the grantor of the easement owns the property. For example, let’s presume that we get a properly written easement document and instead of recording it-officially recording it in the office of the county recorder/registrar of deeds/courthouse, etc., making it a matter of public record-we put it in a file in our office. Let’s then presume that we are placing a conduit run that transits through the property. To keep it interesting, we will not be placing any manholes on the property. This way there will be nothing visible on the surface of the property.

Now, a new person buys the land and gets title insurance. Title insurance covers only encumbrances that are of record. This new owner has no “notice” that your organization has any facilities on their land. Depending on your local court, you might be forced to relocate, even with a written easement if your existing facility conflicts with the intended use of the new property owner.

Unrecorded easements are legal documents giving the owner of the easement legal rights to use the land for the intended purpose. However, if the document is not recorded ion the local county recorder’s office, any new use of the land by others prior to the recording of the document has a prior and higher right.

Right of way is an extremely complex field. Moran invites readers to e-mail questions to him at nmi1@prodigy.net. He may be reached by telephone at 510-530-9342. Moran is vice president of NMI Management & Training Services in Oakland, Calif. (www.nmitraining.com), which specializes in right of way training. He spent 25 years with Pacific Bell in various management and technical positions and co-founded NMI in 1991.

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The Clarion Energy Content Team is made up of editors from various publications, including POWERGRID International, Power Engineering, Renewable Energy World, Hydro Review, Smart Energy International, and Power Engineering International. Contact the content lead for this publication at Jennifer.Runyon@ClarionEvents.com.

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