Friday, March 14, 2008

Howdy Neighbor! ... Cont'd

Billy K. Lemons is a professional oil and gas consultant at Resource Analyt(SM) & Management Group. I appreciated that he took time to comment and clarify some issues on my previous post by the same title. As you will see he is very thorough and precise in his answer to my question.

Question: Is it true that if a pipeline company has acquired an easement from a landowner, either by voluntary conveyance or involuntary conveyance (through condemnation), the pipeline company can place pipelines and other facilities, such as above-ground facilities, on the easement property without the consent of adjoining or neighboring landowners?

Answer: That may be a legal question that an attorney is more qualified to answer. But speaking as a landman in an educational way only, I’d say that the answer is generally, "Yes." Under typical circumstances, the pipeline company needs no approval of adjoining or neighboring landowners to exercise its rights acquired under the easement conveyance.

When a pipeline company acquires an easement on or across a piece of property, it acquires rights in that property, a portion of that bundle of rights referred to as real estate. It is free to exercise whatever legitimate rights it acquired under the conveyance, subject to: 1) the terms and conditions of the conveyance; 2) any superior rights owned by others in that same piece of property; 3) federal, state and local law; and perhaps 4) any restrictive covenants covering the property.

Under the typical “standard” right-of-way easement agreements that pipeline companies convince most surface owners to sign, the pipeline company has rights of ingress and egress across the entire property that is subject to the easement, and it has the right to exercise those rights at any time without any prior or contemporaneous notice to the surface owner. The recording of the easement conveyance in the official public records of the county where the land is located is notice enough. If you own the land upon which the easement is located, the company operating under such a standard easement can come and go in your backyard, or whatever, whenever it wants and not even show you the courtesy of first knocking on your door, much less your neighbor’s door.

Also under the typical standard pipeline easement agreement, the company has the right to install “surface facilities,” which can be any kind of above-ground system of pipes, values, gages, etc., without need for any further authorization from or notice to the owner of the property, much less the owner’s neighbors. But again, such things are subject to the terms and conditions of the easement conveyance, to federal, state and local law, and perhaps to any restrictive covenants covering the property.

So typically, if a pipeline company sticks some big, ugly gathering system facilities across the street from your house, you generally have nothing to say about it unless it’s in violation of law or is a bona fide nuisance of some sort.

The pipeline easement agreements we use with our clients in selling right-of-way and easement to pipeline companies are much more restrictive than the standard easement. Plus, we have two versions, one which excludes the right to install surface facilities (the version we use most), and another that includes rights to install specific, restricted surface facilities. In my view, one should never sign any standard or other easement presented to him by the pipeline company, unless for some reason he just has to. (Never believe the pipeline company when they tell you that you have to do this or do that. Always seek qualified outside counsel.) Neither should one ever accept the purchase price originally offered. It is always low-ball. Most any landowner gets burned badly who tries to represent himself in negotiations for pipeline rights-of-way and easements.

It seems to me that to protect yourself and your neighbors from unsightly pipeline facilities, your best bet it through better local ordinances. If the damage has already been done and the facilities are a bona fide nuisance of some sort, the courts may be your only recourse.

If a problem exists or is apparently forthcoming, the best advice I could give would be to take the matter up with your local real estate attorney. He or she can better advise you of your options.

Billy K. Lemons
Principal Consultant
Resource Analyt & Management Group
P. O. Box 632507
Nacogdoches, Texas 75963
936-569-7228 Office
936-569-7220 Facsimile


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