I've got this gas company that's wants an easement inside our property fence for over 1500', want to install two low pressure 4 inch lines. It could net a nice payday but what's the downside? Said they'd mulch the path and they'd need access a couple times a year. Any experience? Resale concerns?

You could have a slow leak that they don't detect for awhile and by the time you notice, a bunch of old oak trees all die in a several acre radius.

That's my family's only experience with them.

If it is just inside your fence, odd are the contract my have them mowing or maintaining the easement. Something to look at. I know of some properties where they install gates on the entrance and exit side of the property on the easement then once a year contract to a mowing company that shreds it. Could be a good pro but make sure there is language or stipulations for any physical damages.

Odd are minimal impact on you. Just make sure they clean up their mess and return the land back to grade.

Also have this added to the contract. Can remember the exact language but something along the lines of... 1) If gas line is abandoned or taken out of service all said buried pipe become your property and 2) easement is granted only to said pipeline company. Requiring any other company to seek their own easement. 3) Requirements of damages for any maintenance, repair or additions to the existing pipeline.
.....I know this because my grandpa had an old pipeline across his property was abandoned. In his contract he owned that segement of pipeline if abandoned. A third party approached him purchase and remove the old line. He got another pay day out of it.


pipeline companies come and go, get bought, consolidated, sold off, etc. Make sure you know what would happen if ownership changes

We have a gas pipeline across our place. They have not done anything to in years. Probably 20 years ago they would at least bush hog once a year. They have never physically come out and checked it that I know of.

With modern leak detection equipment, I don't think they have to inspect them anymore.

It does make a good sendero for a deer blind.

had a buddy with a similar situation where his property was the ONLY way an oil company could run their stretch of pipeline they wanted to run. after lots of arm twisting by him, what started as a 30,000 dollar contract ended up being closer to 80,000 in his pocket.

find out if you're the only routing option and if so, then begin the price gouging

brettag00 said:

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I've got this gas company that's wants an easement inside our property fence for over 1500', want to install two low pressure 4 inch lines. It could net a nice payday but what's the downside? Said they'd mulch the path and they'd need access a couple times a year. Any experience? Resale concerns?

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Whatever the initial offer is - ask for 3x. Take 2.5 x.

So long as the easement is along the property line (not crossing the middle of the property), it should not be a major problem.

ghollow said:

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We have a gas pipeline across our place. They have not done anything to in years. Probably 20 years ago they would at least bush hog once a year. They have never physically come out and checked it that I know of.

With modern leak detection equipment, I don't think they have to inspect them anymore.

It does make a good sendero for a deer blind.

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You've probably had smart pigs go through that pipe without you even knowing it. Depends on the company and the jurisdiction.

I work for a large nat gas pipeline company and AgySkeet06 summed it up pretty well. I work in integrity, so not an expert on the front end of new pipe and their easements. If these are low pressure lines, they will be poly pipe, needing very little maintenance as long as it's installed right. Make sure they honor the 4' of cover minimum. If you ever want to plow the land, you'll have to do a onecall (you should anyway).

It's easy money, especially if it's along your property line. All good points already mentioned. Be careful with the demands. If they have other options, they may take them, i.e., run it on your neighbors side of the fence. I'd ask them to throw in gates at your fence crossing points. We had and easement where they didn't do that, just went back with like in kind 5 strand.

I'd ask if there will be taps, valves, instrumentation and other equipment (odorizer, separator, etc) in the easement. This will give you an idea how frequently they will visit the right of way.

highvelocity said:

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had a buddy with a similar situation where his property was the ONLY way an oil company could run their stretch of pipeline they wanted to run. after lots of arm twisting by him, what started as a 30,000 dollar contract ended up being closer to 80,000 in his pocket.

find out if you're the only routing option and if so, then begin the price gouging

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Just curious, is that one time, total over time, or per year?

Should you come to an agreement on the terms and money, get as much as you can as "damages" to lower the tax burden.

Access is the big con.

AgySkeet06 said:

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If it is just inside your fence, odd are the contract my have them mowing or maintaining the easement. Something to look at. I know of some properties where they install gates on the entrance and exit side of the property on the easement then once a year contract to a mowing company that shreds it. Could be a good pro but make sure there is language or stipulations for any physical damages.

Odd are minimal impact on you. Just make sure they clean up their mess and return the land back to grade.

Also have this added to the contract. Can remember the exact language but something along the lines of... 1) If gas line is abandoned or taken out of service all said buried pipe become your property and 2) easement is granted only to said pipeline company. Requiring any other company to seek their own easement. 3) Requirements of damages for any maintenance, repair or additions to the existing pipeline.
.....I know this because my grandpa had an old pipeline across his property was abandoned. In his contract he owned that segement of pipeline if abandoned. A third party approached him purchase and remove the old line. He got another pay day out of it.


pipeline companies come and go, get bought, consolidated, sold off, etc. Make sure you know what would happen if ownership changes

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Be careful with #2. You don't want to grant them an exclusive easement. And you want to keep the permanent easement width small (5'). That way it encourages more future pipelines in the corridor with minimal impact to your land (easy $$$)

Make sure you specify a minimum depth and the right to cross it with other utilities, roads, fences, etc. Their normal standard language usually limits your rights....

INAL - so consult one.

Make sure you don't give them above ground rights unless you get paid extra for it. We go back on lines all the time the have above ground rights in the easement from 40 years ago and suddenly an invisible pipeline turns into a meter station and you don't get a penny.

What county are you in? I can give you a good idea of $/rod. Also, if you're prepared to do it without a lawyer and close quickly you can probably get more money. We're always more willing to work with land owners if they show they want to work with us. That being said, know what you're signing and don't give away too much. A lawyer isn't a bad idea, just means that the gas company has to get their lawyer involved and they won't be as willing to meet your counter offer.

Comal

That was a one time cash payment for digging a hole in the ground

I haven't worked in that area. Sorry. Good luck on getting as much out of them as possible.

VincentBlack said:

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Don't accept the boilerplate contract/offer they present.

Texas Pipeline Easement Negotiation Checklist:
http://agrilifecdn.tamu.edu/texasaglaw/files/2016/08/Texas-Pipeline-Easement-Negotiation-Checklist.pdf

Everything is negotiable.

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For the most part. But when they are claiming eminent domain, they can pretty much do what they want in the end. I think that's a pretty good checklist. Our easements include a lot of those.

They got plenty $. Make them pay up. I've got 2 running across my ranch.

One thing I would add.Make sure ROW is nonassignable

Tell them to keep the per rod fee and take a fee per mcf passed through the line for the life of the row.....

[/ducks from incoming....]

If only....... heck I'd comprise and take per mmBTU....

Make sure that the easement only covers the pipeline they want to bury now, not every pipeline they might want to install in the future.

One of the better people on easements and right of ways up was very serious about protecting his property. He made sure that the employees could not drive anywhere but on the one road in the right of way. They couldn't go hunting on his property at all.

Even better, he made sure that the easement does not allow any access for anything other than an absolute emergency if the ground was wet. One time when it had rained the night before, they came out to get their equipment and take it elsewhere. He wouldn't let them move the equipment at all because that would violate their agreement. They had to leave their equipment in the pasture until it was dry so that they wouldn't tear up the grass.

And hold out for more money. Their first offer is going to be a low-ball offer for people who are anxious to get it.

Someone planning on building a wind farm up here wanted to run an underground electric line across one end of his field. They offered something like $2,500 for the easement. He told them that wasn't even worth the problem. After months of trying, he was the last impediment to what they needed. When he told them that it would take ten times that to even discuss it, less than an hour later they offered him $25,000 and he accepted.

Quote:

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We show up to court with my appraisal that said he should be compensated $8,000, and that is what the special commissioners awarded.

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HTown,

I'm curious. Did the landowner bother to show up with his own appraisal from an MAI Appraiser, or did he just bring a dumb look on his face? If the latter, I guess he got what was coming to him.

My problem with these Special Commissioners' hearings in general is that you can present them with (2) very different appraisals (both from MAI appraisers in many cases), and the Commissioners really have no particular real estate market expertise to discern which one is more sound. Thus, they're apt to just 'split the difference'. Splitting the difference can, in the case of larger awards, be a significant sum of money.

I really wish under Texas law that the Special Commissioners were required to have real estate brokers licenses, and that the fee they earn for their services should be payed by the condemner.

I realize that E.D. reform failed miserably in the last legislative session. Maybe next time my suggestion will be thrown in the ring, along with the idea that the condemner should pay (up to a reasonable amount, of course) for the landowner's appraisal (from an appraiser the landowner selects).

Obviously, my bias is toward the landowner, as I was in the crosshairs of a condemner a couple of years ago and was lucky to have escaped unscathed. But, it sure got me thinking.

He did not have an appraiser.

The biggest difference always is going to be the determination of highest and best use. If it is a rural property, the condemnor's appraiser is going to say it is rural residential or agricultural, and the landowner's appraiser will say it is commercial. So you end up with the "gas station in a cow pasture" appraisal.

I agree that the special commissioners should have some real estate experience, but the only official qualification to serve as a special commissioner is that they have to be a freeholder in the county where the property to be acquired is. The unofficial qualification is you have to be a friend of the judge presiding over the case. In the cases where we have commissioners that know real estate, the condemnors tend to do better on the awards, because they know the landowner's appraiser is full of crap saying cow pasture land is worth $2.00 per square foot. In cases where the commissioners don't know much about real estate, they either think the condemnor's appraiser is lowballing or they split the baby.

The problem with paying for the landowner's fees (legal and appraisal) is that it disincentivises settling. In my work I would say that less than 20% of the cases ever make it to a hearing, and less than 10% of those make it to trial. Those numbers would go up dramatically if fees to the landowner weren't an issue.

Couple of comments RE Condemnation:

In general, there are two ways to demonstrate the level of value impact that appraiser's claim for landowners in easement acquisitions:

1. Claim that the highest and best use is for subdivision and the easement is impacting small lots to the point of making the development non-feasible. This scenario makes it seem like the property is worth a lot of money before the easement, and is only worth "rural/ag" value after the acquisition. Every single case I have been involved with in which this was claimed, the appraisal was a flat out ethical violation with little to no support from market analysis to establish demand for a subdivision or some other accelerated use. Anyone can say that a property should be subdivided, and anyone has the right to subdivide, but that doesn't mean it will succeed if there is no market demand..which is the test of market value.

2. Do an analysis on value impacts by utilizing selective data. I'll use an electric transmission line for this scenario. An appraiser will say there are no local sales with transmission lines on them to value a property in which a transmission line is proposed. They will then go to other markets and show two transactions, one with a transmission easement and the other without. The difference in price will be large and the appraiser will stipulate that the entire difference in price is due to a transmission line being on the lower priced property. This, too, has shown to be an unethical appraisal in my experience. When these transactions are researched, it becomes clear that the lower priced sale is a marginal property and the higher priced sale is a trophy property, or the lower priced sale is located in a very poor area compared to the highest priced sale, or some other factor or combination of factor. When the area in which this paired sale analysis was conducted is thoroughly researched, it becomes evident that the property with the transmission easement sold for about what the rest of the market commanded for similar properties. I have seen appraisers claim that the presence of a transmission line diminishes a 1,000+ acre property 20%-25% across every acre on the tract. That statement is simply not accurate based on market activity throughout the State of Texas.

The reality is that our rural land markets are very forgiving regardless of the encumbrances placed upon them. There may be a softening of price when a tract becomes inundated with encumbrances, but even at that level the overwhelming demand for the property is for the hunting, recreational, or agricultural production of the tract, and an easement placed upon the tract does not change that.

I used to get very upset over the games that are played in the condemnation world because it is quite obviously a game to see who blinks first. My problem stems from the fact that "qualified" appraisers are simply hired guns to make outrageous claims under the guise of an "expert". Appraisers are charged with "protecting the public's trust" through the presentation of an unbiased opinion of value based on market facts. Many appraisers lose site of that and instead present the answer that a client wants or needs. Any data can be contorted to cloak the realities of the market, but doing so does not "protect the public trust". It simply lets the public know that the profession is littered with people that will say or do anything to make a buck. I will also add that I have seen the condemnor's appraiser equally fail at their job, but not nearly to the level as the reverse.

My experience to the extent it can be helpful. Had a 36" line come thru the middle of our small farm in the exurbs of Denton County. I had subdivided the property into five pieces some years before just in case Denton County changed their rural subdivision laws/regulations to make it more difficult/costly. The pipeline company was wanting to go about 1,400 feet with 50 foot permanent easement and 110 foot temporary construction easement....taking about 1.5 acres for the permanent easement. This was about ten years ago.

- Pipeline guy (very winsome for sure) shows up at the door and offers $25,000 wanting me to sign a document and take the cash that afternoon. This was about 200% of market value at that time for just that 1.5 acres. I say "let me think about it." Talk to the neighbors and about 80% of them took the money on the spot.

- I contact him and offer to accept $80,000 given what I felt was the negative impact on "the remainder" of the farm and my ability to sell the five tracts. After about three to four weeks the pipeline company comes back with their "best and final" which was $60,000 for the 1.5 acres. I honestly think they hadn't done their research initially to understand they were going through a rural subdivision.

- I say no thank you and hire a lawyer specialize in representing land owners whose property is being condemned. We hire an appraiser to do a comp study. Study comes back with a $300,000 amount for the 1.5 acres. The agreement I negotiated with the attorney was a fixed price of $15,000 to get through the end of the commissioners hearing and a fixed price of $5,000 for the comp study and appraiser's testimony at the commissioners' hearing. Attorney wanted 50% of the amount greater than the best and final with no risk to me but the comp study. I instead negotiated the $15,000 plus $5,000.

- We go to the commissioners' hearing. It was a very friendly process and everyone was nice to everyone...and their was no emotional crap or silly accusations etc...everyone was professional and courteous. By this time the pipeline's appraiser had raised their number to $80,000 and my appraiser and attorney were still at $300,000. After about two hours, the three commissioners determine an amount of $180,000 that must be deposited with the court. Of course, that only determines the amount to deposit with the court and either side can then either settle for whatever or go to normal (costly court).

- Rather than go to court, I make an offer to the pipeline company of $120,000 plus my $20,000 of legal/appraisal costs for a total of $140,000. Plus, I put in other restrictions regarding the route across the property including being parallel to subdivision lines and all the other stuff already suggested in this thread (very helpful stuff by the way). The pipeline accepts and we sign the easement and collect the $140,000. Our attorney thinks our professionalism, reasonableness and likeability during the hearing caused the pipeline attorneys to want to avoid a jury trial and appeal.

- We actually enjoyed watching the construction of the pipeline through the property and often served soft drinks/beer/BBQ to the pipeline workers and their foreman. Also let the foreman come through our property down our road to get to his project rather than drive miles up and down the easement from the highway. He really appreciated that. The pipeline company even voluntarily dropped the pipeline 20 feet below ground for 200 feet where we had a future road going across and constructed some new, nice fences and pasture shelter for me at no additional costs. Was a good experience....young boys getting to ride in the cabs of track hoes and bull dozers and pipe cranes etc.

- Since construction, the relationship with the pipeline company has been great. They just fly over with their helicopter about once a month (I'm sure they send pigs through as well, but you'd never know). And I have sold four of the five tracts (and have the fifth on the market). I have sold the two tracts that have the pipeline on them. It is my considered opinion now having sold the properties that the pipeline easement had extremely minimal impact on the value of the property or my quiet enjoyment of the property.

- Long story short, I netted $125,000 vs. the $25,000 originally offered and the process wasn't a bad one. Just be polite, professional and reasonable throughout the process. I did have a couple of neighbors go to court and subsequent appeals etc and can say they did no better than I did by simple going to the commissioners hearing with professional representation and data and then being reasonable.