What is a Utility Easement Agreement?
A utility easement agreement is a legally binding contract entered into between a utility company and a private individual or corporation. The purpose of the agreement is to provide the utility company with the right to access the private real estate for the purpose of maintaining and/or installing utility infrastructure. For instance , an electric utility may install multiple power lines on private property. The installation of the power lines requires clearing site access for the electric company so that the utility is able to maintain and install the electric power lines without delay. The day to day maintenance of the electric power lines is also performed by the electric utility company. Consequently, the utility must be allowed to access the private real estate on a regular basis and remove any obstructions within a limited space surrounding the electric power lines.
Different Types of Utility Easements
Electric utility easements, which allow utility companies access to install and maintain power lines, are the most common type of utility easement. On private property, electric easements can be either underground or overhead. Electric easements often permit removal of debris, but also discuss other types of maintenance that may take place.
Gas utility easements permit installation of lines that carry natural gas or propane. Like electric easements, gas utility easements can be either damaged or undamaged. Gas utility easements often provide special rights to the easement holder regarding repair and access. In addition to preservation of plants and ground cover, maintenance may also authorize tree trimming for maintenance.
Water utility easements are usually required in order to cross property for the purpose of taping into or bringing water to residential areas. A water utility easement draft should contemplate right of access to nearby pipe lines and wells.
Sewage utility easements typically permit easement holders to build sewer lines for a neighborhood, or run sewerage from a house to a municipal sewage system. Like many utility easements, it permits ancillary activities to complete the easement granted.
Telecommunications utility easements (like electric easements) often grant access for cabling and phone usage. Telecommunications easements can have a wide variety of applications because television and telephone service has such wide spread use.
Rights and Obligations of the Parties
Property owners retain the rights of ownership over the area covered by an easement agreement. However, an easement contract grants a utility company and its employees the right to access and study the subject land on a temporary or permanent basis. When an easement agreement is enacted, property owners must adhere to several limitations for the duration of the contract.
Your land is not your land. With a utility easement agreement, the property subject to the easement is no longer entirely under your control. Although the utility company has limited rights to the land, this agreement does limit the ability to enter into other contracts or convey ownership of the land.
You can’t do anything you want with your land. Because the utility company has been granted an easement to traverse your agreement, you must avoid creating barriers or obstructions around the area. You may still own the surface land, but the easement land is restricted from professional and recreational activities.
You must protect the easement area. Property owners are obligated to keep an easement area clear of obstructions, vegetation and any other natural and man-made material that may interfere with a utility company’s access and study of the area. Informing the utility company of your intent to build or otherwise obstruct the utility’s use of your land will help both parties avoid additional legal action.
Legal Considerations of Utility Easements
As utility companies have the right of eminent domain, there are instances in which these companies may condemn private property interests if the parties can’t agree but have the lawful right to do so. As such, a bona fide private property interest having value that is greater than zero suffices as grounds for condemning an easement. Furthermore, an easement obtained by condemnation may not be used for a purpose that is inconsistent with the easement’s purpose. Condemnation is generally uncommon, but the threat of it can be used as leverage to negotiate with property owners.
With respect to a lawsuit, either party may seek judicial intervention when a landowner denies the utility company access to its property on several grounds including the landowner being prohibited from denying such access due to the existence of an easement agreement. The most common example is when the easement grants the right-of-way for an above ground power line and the property owner attempts to plant a tree or fence that would obstruct the power line.
Judicial intervention may also be sought when it comes to an easement modification. A common example is where an easement is set to end after a certain amount of time, but it is discovered that the utility company needs to maintain its right-of-way longer than the period provided for in the original easement agreement. In these circumstances, a lawsuit is initiated to modify the easement terms before they expire so that the utility company can maintain the easement as necessary. Well-known law firms have performed extensive research and have the knowledge to handle cases related to condemnation lawsuits and easement agreements.
Utility Easement Agreement Negotiation
When approached by a utility provider to sign an easement agreement, property owners should not assume the terms and conditions are set in stone. Just like any other contract, an easement agreement for a sewer line, water service, or even a solar lease can be negotiated to achieve an outcome that best serves both the property owner’s interests and the utility company’s needs. As with proposed lease agreements, which are the subject of another article, there are often funds available to incentivize owners to negotiate a mutually advantageous agreement. We include the following as fundamental areas of the agreement that may be negotiated with utilities to benefit the property owner:
One caveat: The rules for easement agreements vary from state to state, and accordingly you should consult with an attorney in the state in which the easement is being granted for guidance on what may be negotiable . Even so, most states allow for some latitude in how the easement is described, where on the property the utility’s access will be, whether it can be relocated by the utility, how the utility must go about doing any digging or construction on your property, and whether any damage to your land must be remediated by the utility. A good rule of thumb is to remember that in most utility easement negotiations, the value of the easement will be a function of the amount of disruption it will cause to the property, the amount of space the utility will need, and the financial remedies it agrees to compensate the owner in the event there is a problem with the utility’s use of the property.
Modifying or Terminating a Utility Easement
When the need arises to modify or terminate an existing utility easement agreement, the parties involved should follow a process that adheres to their agreement and to California law. The procedure may differ based on the terms of the agreement and the desires of the parties, but generally requires that they first meet and confer in an effort to reach an agreement. If this informal dialogue does not result in acceptance by both parties to the modification or termination, then a more formal procedure utilizing alternative dispute resolution methods, such as judicial actions or arbitration, may be required.
It is commonly accepted both by parties entering into a public utility easement or by courts when determining their validity, that easements are created for the benefit of the public and are a means for public service agencies to provide utility services. Accordingly, the courts will uphold public utility easements freely granted for public service agencies unless there is an unlawful or fraudulent purpose for acquiring it.
Any changes to an existing utility easement will require at a minimum the consent of both parties, a notice of intent to vacate the easement and confirmation that the modification or termination complies with the California Government Code section 65402, 65906, and 66014.5. A utility easement will only be changed or terminated if:
• When the modification is requested solely for the benefit of the utility easement holder that the use of the property be consistent with any specific plan adopted in compliance with a local coastal plan.
• When the modification is requested solely for the benefit of the utility easement holder outside of a coastal zone, that the land use is consistent with a general plan adopted in compliance with Government Code sections 65860-65864.
If the titleholder of the easement seeks to modify its boundaries, the titleholder must file a written notice of intent to modify with the legislative body of the county or city with jurisdiction over the affected property. The notice must identify the public agency requesting the change and how it will affect the boundaries of the township. The affected principal must be given an opportunity to agree to the proposed change through written consent, approved by the appropriate authority. The legislative body may also withdraw its previously granted irrevocable consent to the easement if the proposed change would render the easement useless for its intended purpose at any point.
The courts will uphold the titleholders right to an irrevocable consent granted by the public agency as long as the easement is used for a public purpose, is consistent with the specifications in the original grant, is for a public purpose as it was intended at the time of the original grant and is utilized as stipulated in the original deed. In determining whether an easement is irrevocable for public use, the California courts will consider the benefit to the public, how the easement is used, the language of the deed and if the use of the easement changes the highest and best use of the tract.
The courts have considered the following when determining if an easement has been used and so it remains irrevocable:
• If the easement is used down to its full capacity
• If the easement is being employed for the purpose it was originally intended
• Whether the easement permits such benefits beyond that of the original grant; and,
• Whether the easement has changed the best use of the tract.
The intent of the parties is determinative of whether fee titleholders convey an easement to a public agency. Any express language will control when interpreting a conveyance of an easement, including where it is made subject to the local ordinances and state law. Courts will not presume a utility easement was granted for exclusive use when it expressly stated that it was for its combined use and benefit.
Additionally, a public utility easement granted for the construction and maintenance of hydrants will continue to benefit a water provider that takes over municipal fire protection functions within the area. Evidence of this intention is found in the contract between the municipalities regarding the transfer and in the actions of the subsequent municipality.
Public utility agencies were granted the power of eminent domain in order to facilitate their provision of utility services. However, if the public utility easement is not being used in a manner authorized by statute, the public agency is without authority to hold the easement.
Utility Easement Agreement Best Practices
A utility easement agreement is a specialized form of real estate agreement. It has unique legal requirements that can vary depending on the applicable jurisdiction. In order to be effective, the agreement must allow the utility services company to not only use the property, but also to have appropriate rights of ingress and egress for service installation and service personnel. Therefore, clear language must be used, and precise definitions and descriptions should be provided.
Every property is unique, and different service installations and service routes require different elements . Accordingly, the specific language in the easement should be tailored to the specific, intended use. In addition, the following elements are important:
• Type of use – full use of the property, limited use, for specific purpose
(e.g. utility lines, cables, pipes, drainage);
• Location – what areas of the property will be used by the utility
company;
• Easements – for ingress and egress and to access facilities; and
• Improvements – means of ingress and egress; surface or subsurface
pipelines, conduits, wiring, cables, drainage systems, and related
improvements and facilities.