As a property owner, you may not be familiar with your rights regarding the taking or leasing of your land for use by a third party. If you are approached to discuss pipeline easements, solar farm leasing, or oil and gas leases, it is a good idea to consult with an experienced attorney to discuss your rights before signing anything. Contact our Columbia pipeline easements, solar farms, oil and gas lease lawyer today.
What Is an Easement?
An easement describes a legal real estate transaction in which property owners allow or prevent the use of their real property by another party. Typical examples of easements are allowing gas and oil companies to use a portion of your land or farm to run gas and oil pipelines or letting utility companies use a part of your land or farm to run power lines or sewer lines that they are responsible for maintaining. Contact our Columbia easement lawyer today.
There are two kinds of easements:
- Appurtenant – One that benefits the real property owner, is isolated to a specific piece of the property, and is transferable within that particular piece of the property. Power lines and sewer lines are an example of this kind of easement.
- In Gross – One that benefits the easement holder only. This is an easement in which property owners are paid to allow another party to use a portion of their property for use which brings no benefit to the landowner. Allowing gas and oil companies to install pipelines is an example of this kind of easement.
Usually, easements partially or fully limit the property owner’s rights on the easement property. Easements are generally irrevocable and transferable. Some easements give exclusive rights to only one other party, and some do not.
What Is a Lease?
A lease, on the other hand, describes a real estate transaction in which owners of real property give another party the exclusive right to inhabit or occupy their property for payment. Typical examples of leases include renting a home, an apartment, or an office building.
A lease is a contractual agreement where the property owner receives benefit from another party by giving them exclusive use of their property. Leases are usually time-delimited, and they often have clauses that require both the property owner and the renter to fulfill the terms of the lease and to give adequate notice when either party decides not to renew the lease.
Unless explicitly stated otherwise in the lease agreement, leases are transferable and irrevocable. Contact our Columbia lease lawyer today.
Concerns Property Owners Should Consider Before Entering a Lease
Gas, oil, and, increasingly, solar and wind companies typically approach farm owners for permission to use a portion of their farms for either pipeline easements or oil, gas, or solar leases because open spaces make more sense for installing the equipment used by these commercial energy companies.
Most oil and gas companies will offer the farm owner a standard easement lease agreement. These standard agreements should be carefully reviewed. Solar farm lease agreements tend to be very complicated.
One concern with commercial energy easement lease agreements is that typically they have wording that allows the energy companies to use their pipelines for products other than gas or oil and it gives them the right to install additional pipelines on the easement property anytime they want. In other words, they pay a set lease amount and increase their profits at no extra expense.
Another concern is that the size of the pipelines that are going to be installed is usually unspecified. There is a per-foot-to-lease-payment ratio that should increase as the size of the pipeline increases.
Timber and brush removal on the easement property should be considered as well. If there are trees that could be cut and sold, then the fair market value needs to be established and paid. Additionally, the farm owner should be able to specify what should be done with the timber and brush that is removed.
Property owners should also make sure that the ingress and egress (entries and exits to the easement property) are identified since most standard easement lease agreements give the energy companies the ability to enter and leave the easement property at any location on the property.
It is also important to discuss how the easement lease agreement will be enforced. What if the energy companies break the terms they agreed to? What if their installations went beyond the easement property onto the property owner’s private farmland? What if they exceed the size of the pipelines or installed additional pipelines without permission?
This is only a summary of a few issues that property owners need to consider before entering into an easement lease agreement. A qualified attorney who has successfully handled lease agreement negotiations and enforcement with large energy companies can help farmers get through the complexities of these kinds of agreements and ensure that they get an airtight and fair agreement and that the energy companies stay in strict compliance with the arrangements.
Gas Line Easement Compensation
In most cases, the compensation for a gas line easement for farm owners is a formula that calculates the current market value of the land being used for the easement. Included in this formula is compensation for the agricultural output farm owners are losing because of the easement.
However, it is crucial to consider additional compensation from the gas energy companies for physical changes they are making to the easement property, such as right of ways, structures that sit above ground, and lost timber, among others. It is also critical to understand how the pipes are measured: linear feet (12”) or linear rod (16.5’). Contact our Columbia oil and gas line lawyer today.
Natural Gas Pipeline Right-of-Way
Natural gas pipeline right of way agreements need to be negotiated separately from the easement lease agreement. Natural gas companies often use right-of-way clauses in their standard contracts that lack specificity and give the companies much more authority to operate on farmers’ property and to install as many pipelines as they want without telling the farmers anything. This represents not only a breach of how the easement property was designated to be used but also a lack of equitable compensation for the additionally installed pipelines.
Contact Us for Legal Help with an Easement Issue in South Carolina
Jeffcoat Law Firm has the practical background and experience to successfully handle easement and leases matters against big energy companies on behalf of small farmers throughout South Carolina.
Mr. Jeffcoat has built his practice and reputation on providing thorough, aggressive, and competent representation for his clients. We believe that maintaining an open attorney-client relationship with each client is essential to developing and executing effective legal strategies.
Call us or contact us online today to schedule a confidential review of your property easement lease agreement.