PIPELINE EASEMENTS

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Landowner Considerations in Survey Permission and Pipeline Easements

Dick Emens & Craig Wilson Emens & Wolper Law Firm Columbus, Ohio Held on Wed., August 27, 2014 at Coshocton County Career Center 23640 Airport Road, Coshocton, Ohio 43812 © 2014 Emens & Wolper Law Firm 7/29/2014

Landowner Considerations in Pipeline Easements and Survey Permission

2  There continues to be a significant amount of infrastructure development in Ohio.

 Many companies continue to try and acquire Rights of Way/Easements (“ROWE”) for pipelines.

 Many landowners across the State of Ohio have been or will soon be contacted about signing a Pipeline ROWE © 2014 Emens & Wolper Law Firm 7/29/2014

Survey Permission

3    When a new pipeline is proposed, often the pipeline companies will initially contact landowners to sign a survey permission. License to enter your property and conduct certain surveys and tests. We have seen a number of the survey permissions and believe they often do not cover:  The timeframe for which permission is granted;   Adequate provisions for damages and indemnity; and Reclamation of the property.

© 2014 Emens & Wolper Law Firm 7/29/2014

What is an Easement?

4    An easement is a right to use your property.  However, you will not allowed to use that land in any manner you see fit, there will be restrictions. ROWE’s are NOT the same as oil and gas leases.    The ROWE that a pipeline company will propose is likely a perpetual easement A perpetual ROWE is PERMANENT and could last forever; an oil and gas lease is for a limited duration.

A perpetual easement can be extremely difficult to remove from your title even if the pipeline company is no longer using it and has removed all of its equipment.

When you sell the property, the easement will go with the property. © 2014 Emens & Wolper Law Firm 7/29/2014

How Does a Pipeline Company Get an Easement?

5  Typically, the company will ask you to sign a new easement (they may call it a right of way, but those terms are interchangeable).  However, the pipeline company may try to use an existing easement on your property. © 2014 Emens & Wolper Law Firm 7/29/2014

Company Claims Rights Under Existing ROWE

6     Pipeline companies will often ask you to sign additional documents and may offer some additional compensation (although not always)

Do not sign any documents prior to becoming informed about your rights.

Ask the company to provide you with a copy of the existing easement if company claims there is one.

The old easement may not give the new company the rights it is claiming.

© 2014 Emens & Wolper Law Firm 7/29/2014

The First Questions to Ask!

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G O I N T O T H E T R A N S A C T I O N W I T H Y O U R E Y E S O P E N – K N O W T H A T T H E L A N D A G E N T A T Y O U R H O M E I S T H E C A R O R T R A C T O R S A L E S M A N R E P R E S E N T I N G T H E S E L L E R A N D I S T R Y I N G T O G E T T H E B E S T T E R M S F O R T H E P I P E L I N E S C O M P A N Y F O R T H E L E A S T M O N E Y !

© 2014 Emens & Wolper Law Firm 7/29/2014

New Easement: First Questions to Ask

8  How large is the proposed pipeline going to be (how many inches in diameter)?  Does the company want the right to install more than one pipeline?

 What materials does the pipeline company plan to transport through the pipeline?

  Where on your property will the pipeline cross? How many feet across your property will the proposed pipeline run?

© 2014 Emens & Wolper Law Firm 7/29/2014

New Easement: First Questions to Ask

9     How wide is the proposed easement?

Does the pipeline company want any additional space?

 Temporary work/construction space    Additional construction space Access Roads Valves, compressors, meters, etc. What is the construction timeline? Who is the pipeline company? What is the financial strength of the Pipeline Company? © 2014 Emens & Wolper Law Firm 7/29/2014

Things to Know Before Trying to Negotiate

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DON’T BE A LANDOWNER WHO HAS BUYER’S REMORSE. ASK THE ESSENTIAL QUESTIONS FIRST, AND HIRE THE MOST EXPERIENCED ATTORNEYS TO ADVISE YOU.

7/29/2014 © 2014 Emens & Wolper Law Firm

New Easement: Things to Know Upfront

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There is more to terms than just money.

Do not sign anything until you have become fully informed about your rights and until you understand every word in the proposed ROWE that you are signing.

The land agent represents the company, NOT YOU!

© 2014 Emens & Wolper Law Firm 7/29/2014

New Easement: Things to Know Upfront

12    The Pipeline Company representative may attempt to use pressure tactics or the threat of eminent domain to try and obtain your signature on the spot.

The pipeline ROWE that is first offered to a landowner does not typically include many of the landowner protections that you will want.

Remember that every word in a proposed pipeline easement is negotiable.

© 2014 Emens & Wolper Law Firm 7/29/2014

Essential Terms of a Pipeline Easement

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THERE IS MORE TO TERMS THAN JUST MONEY!

© 2014 Emens & Wolper Law Firm 7/29/2014

New Easement: Essential Terms

14      Abandonment Language Pipeline    Limit Maximum Size (diameter) Limit Maximum Pressure Materials that may be transported Limit Number of Pipelines  If ROWE not limited to one pipeline landowners need to make sure that language allowing for additional pipeline is very carefully drafted.

Location Depicted   Location Shown on Map Limit Width Temporary Work/Construction Space, Access Road   Location Shown on Map Factor Into Compensation © 2014 Emens & Wolper Law Firm 7/29/2014

New Easement: Essential Terms

15  Construction Language  Protect Topsoil    Drain Tiles Temporary Crossings Restoration Requirements   Time Re-Seed  Pipeline Burial  Depth © 2014 Emens & Wolper Law Firm 7/29/2014

New Easement: Essential Terms

16  Use of ROWE After Construction  Specify uses  Limitation of Pipeline Companies Rights   Access   When Where Rights to Use of Property  Surface Facilities  Damages Language © 2014 Emens & Wolper Law Firm 7/29/2014

New Easement: Essential Terms

17  Title Warranty  No Warranties of title by landowner  Indemnity  Minimum Insurance Requirements  Landowner named as additional insured  Assignment  Taxes  Maintenance  Compliance with Laws © 2014 Emens & Wolper Law Firm 7/29/2014

New Easement: Essential Terms

18  Obtaining landowner friendly terms takes negotiations.

 We strongly recommend landowners join together to form a group represented by the same attorneys. © 2014 Emens & Wolper Law Firm 7/29/2014

New Pipeline: Compensation

19  Typically the only compensation a landowner is paid for a pipeline ROWE is a one-time payment agreed to at the time of signing.  That means a landowner has one-shot to receive adequate compensation.

© 2014 Emens & Wolper Law Firm 7/29/2014

New Pipeline: Compensation

20  When Thinking About Compensation a Landowner Should Keep the Following in Mind:  What is the Fair Market Value of the property covered by the ROWE  How Will the ROWE Affect the use of property  During Construction  After Construction  What Increased Costs will Occur  Crop loss  Use of additional land  Taxes © 2014 Emens & Wolper Law Firm 7/29/2014

New Pipeline: Compensation

21  When Thinking About Compensation a Landowner Should Keep the Following in Mind:  How Will the ROWE Affect on value of rest of property  How Will the ROWE Affect future development potential of the property © 2014 Emens & Wolper Law Firm 7/29/2014

Eminent Domain

22       Company may threaten eminent domain if you do not sign.

DO NOT let threat of eminent domain cause you to accept terms and conditions that are inadequate.

Pipeline companies right to eminent domain depends on the type of line being installed.

Even if company has right to eminent domain, this is typically last resort for company.

  Takes time and can delay project.

Adds costs.

Rights company can acquire through eminent domain much narrower then rights given to company in most landowner unfriendly pipeline ROWEs.

If property taken through eminent domain landowner has right to value of the land at its “highest and best use.” © 2014 Emens & Wolper Law Firm 7/29/2014

Educational Purpose

23  These materials have been prepared by Emens & Wolper Law Firm for informational purposes only and are not legal advice. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. No person should act upon this information without first seeking professional counsel. While every effort is made to keep the information accurate and up-to-date, Emens & Wolper Law Firm makes no representation as to the accuracy, reliability, timeliness, or completeness of the information contained or referenced herein and the information is subject to change.

© 2014 Emens & Wolper Law Firm 7/29/2014

Thank You For Your Attention

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Questions?

© 2014 Emens & Wolper Law Firm

Dick Emens Craig Wilson

Emens & Wolper Law Firm One Easton Oval, Suite 550 Columbus, Ohio 43219 614-414-0888

Email [email protected]

[email protected]

7/29/2014