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Transmission Lines & Pipelines: Routing-
Condemnation-Easements
Wednesday, May 28, 2014
Texas Association of Realtors
Big Picture
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• Phase 1: Company study• Phase 2: Routing• Phase 3: Land acquisition
(condemnation)• Phase 4: Construction
Routing Process Transmission/Pipeli
nes• Regulated Formal Process–Powerline Company Files
CCN–Heard by SOAH/PUC
• Non-transparent Process–O&G Company/Railroad–Private/Threat of
Condemnation
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Powerlines in SOAH
• Intervene or Comment• If Intervening, Provide Written Direct Testimony
• Critical Difference: Protestors are Not Parties and Comments Are Not Evidence
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How Experts Can Help You
• Analyze Routes and Segments
• Recommend a Route• Support or Rebut Routes Chosen By Routing Agency
• Provide Testimony at Hearing
Big Picture
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• Phase 1: Company study• Phase 2: Routing• Phase 3: Land acquisition
(condemnation)• Phase 4: Construction
Steps in Eminent Domain/Condemnation
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• Phase 1: The Call, Visit or Letters from Landman
• Phase 2: Negotiating Your Terms and Compensation
• Phase 3: Special Commissioners’ Hearing
• Phase 4: District Court/County Court at Law Appeal
Phase 1: The Letters• “Bona fide offer”
required• Condemnor’s “initial
offer”• Generally, includes a
30-day deadline• Law requires a written
appraisal and 14-day “final offer” before any hearing
• Critical time to have consulted with an attorney
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Phase 2: Negotiating Your Terms & Compensation
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• Company landman makes the written offer
• First offer typically “low”
• Offer and terms are negotiable
• Landman and/or company lawyers discuss price, location, and terms
Phase 3: Commissioners’ Court
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• If no agreement, company files condemnation lawsuit
• Purpose of Commissioners’ Court is to assess damages and “award” a dollar amount to landowner
• Braun & Gresham continues to negotiate
• Company can begin building after award
Phase 4: Appeal
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• Objection to award
• Formal courtroom jury trial
• Decides price• Expensive• Should be used
as last resort
General Negotiations
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• Price of land taken• Other damages• Details of routes• Location of
structures• Temporary
agreements– e.g., Roads/Easements
• Permanent easements
Easement Negotiations
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• Restore/protect land
• Access points • Roads• Improvements• Fences and gates• Liability
protections• Landowner’s
future use• Limits on others’
use
Pipeline Specific Negotiations
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• Non-exclusivity• Limitation of number
of lines• Limitation of diameter
of pipe• Limitation of easement
width• Limitation of surface
facilities• Depth of pipe• Surface restoration
measures • Indemnity protection• Termination clause• Land/ranch specifics• Miscellaneous
provisions– No warranty, dispute
resolution, etc.
QUESTIONS?• Do transmission lines/pipelines
negatively affect property values?• Should the seller tell the buyer an
electric utility company has notified the seller the property may be impacted by the routing of a new transmission line?
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QUESTIONS?• Do transmission lines/pipelines
negatively affect property values?• Should the seller tell the buyer an
electric utility company has notified the seller the property may be impacted by the routing of a new transmission line?
• Should the seller tell the buyer a pipeline company has notified seller about the possible routing of a new pipeline across the seller’s property?
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QUESTIONS?• Do transmission lines/pipelines
negatively affect property values?• Should the seller tell the buyer an
electric utility company has notified the seller the property may be impacted by the routing of a new transmission line?
• Should the seller tell the buyer a pipeline company has notified seller about the possible routing of a new pipeline across the seller’s property?
• Should the seller disclose whether the property is under the threat of potential condemnation?
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Bad Old Easements• Blanket easements by past failure to
negotiate• Undefined ingress and egress locations• Undefined width of permanent
easement• Undefined number and sizes of
pipelines• Undefined number of transmission line
circuits, etc• Undefined use of additional temporary
work space• Payment for new lines at 1930’s prices
-- or worse!!– Example $0.25/rod for each additional line (1 rod =
16.5 feet)
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Harrington v. Magellan Pipeline Co., L.P. (2011 Waco Court of
Appeals)• An easement agreement in 1919 that
grants the pipeline company the right to lay multiple pipelines “over and through [Grantor’s] lands” is ambiguous as to whether it means multiple pipelines in the same ditch as the first pipeline, or multiple pipelines at different locations and in different directions on Grantor’s lands.
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Natural Resources Code Sec. 111.0194
• Applies to easements prior to January 1, 1994
• Applies to pipelines laid under threat of Condemnation or Eminent Domain
• If width of easement is undefined in old easement then “extends only a width of 50 feet as to each pipeline laid”
• Company may rebut with evidence it needs more
• Statute is unfortunately ambiguous33
Exceptions to Title Policy
• Buyer should request the documents and carefully review the language before closing
• Without a careful review by buyer and his/her attorney, the buyer man not realize the extent of the burden of a bad old easement`
• Company may decide to “maintain” an old easement and remove all trees/growth in a 50-100 foot strip of land -- or lay additional lines anywhere on the property
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Patrick L. Reznik
www.braungresham.com