Transmission Lines & Pipelines: Routing-CondemnationEasements Wednesday, May 28, 2014 Texas Association of Realtors 1 Big Picture • • • • Phase 1: Company study Phase 2: Routing Phase 3: Land acquisition (condemnation) Phase 4: Construction 2 Phase 2: Routing 3 Routing Process Transmission/Pipelines • Regulated Formal Process – Powerline Company Files CCN – Heard by SOAH/PUC • Non-transparent Process – O&G Company/Railroad – Private/Threat of Condemnation Powerlines in SOAH • Intervene or Comment • If Intervening, Provide Written Direct Testimony • Critical Difference: Protestors are Not Parties and Comments Are Not Evidence 5 Powerline Critical Fact! “RECOMMENDED ROUTE” DOES NOT MEAN MUCH 6 7 Roles and Strategies of the Team Experts: Landowners: Lawyers: Routing Alliances Legal 8 How Experts Can Help You • Analyze Routes and Segments • Recommend a Route • Support or Rebut Routes Chosen By Routing Agency • Provide Testimony at Hearing 9 10 Critical Conclusion! “INTERVENORS” INFLUENCE ROUTE SELECTION 11 Big Picture • • • • Phase 1: Company study Phase 2: Routing Phase 3: Land acquisition (condemnation) Phase 4: Construction 12 Steps in Eminent Domain/Condemnation • • • • 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 13 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 14 Phase 2: Negotiating Your Terms & Compensation • 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 15 16 17 18 19 20 Phase 3: Commissioners’ Court • 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 21 Phase 4: Appeal • Objection to award • Formal courtroom jury trial • Decides price • Expensive • Should be used as last resort 22 General Negotiations • • • • • Price of land taken Other damages Details of routes Location of structures Temporary agreements – e.g., Roads/Easements • Permanent easements 23 Easement Negotiations • Restore/protect land • Access points • Roads • • • • • Improvements Fences and gates Liability protections Landowner’s future use Limits on others’ use 24 Pipeline Specific Negotiations • • • • • • • • • • • 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. 25 QUESTIONS? • Do transmission lines/pipelines negatively affect property values? 26 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? 27 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? 28 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? 29 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) 30 31 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. 32 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 ambiguous 33 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 34 Q&A 35 Stay informed and connected… Join the: Stay informed on issues affecting landowners and their land. This free e-mail service comes out once every two weeks and gives subscribers exclusive access to alerts on transmission lines, announcements about important changes in the law, and upcoming educational seminars. Anyone interested in land will benefit from a subscription. 36 Stay Informed and Connected • Join our Landowner Alert System http://www.braungresham.com/contact-us/#contact • Like us on Facebook www.facebook.com/BraunGresham • Follow us on Twitter twitter.com/BraunGreshamLaw 37 Patrick L. Reznik 512-894-5426 preznik@braungresham.com www.braungresham.com 38