The following explains many of the most important terms to consider in a pipeline easement. This list is a summary and does not contain all the provisions that may exist. A landowner should understand each provision and determine whether it applies to the landowner`s situation and should be a point of negotiation with the development corporation. In addition, I considered it imperative to define that the use of the pipeline is limited to easement and permanent easement, and that any other activity outside this defined area is considered trespass with damage. The practical reason is that the bosses park their trucks under the nearest oak tree in the shade and the riders go on tourist expeditions and adventure on a 4 wheels. Because most lawyers charge by the hour, a client can save significant fees by doing as much work as possible before heading to the prosecutor`s office. For example, a landowner could collect the necessary documents such as the legal description or sketch of the property, which would save the lawyer time to find this information. In addition, a landowner could use this checklist to create an initial draft of the easement agreement. This would save the lawyer from starting from scratch and allow him to easily edit the project prepared by the landowner. This error could arguably be listed as the ”#1 Landowner`s Biggest Mistake.” Doug announces several times each week on his radio show: ”The compatriot works for the gas or pipeline company and NOT for the landowner!” If in doubt, ask the compatriot to show you his business card. Read it carefully, but you will not find your name on the compatriot`s business card.
There are two approaches to meeting the construction needs of the pipeline. A company can take structural needs into account when determining the width of the easement. In this situation, the landowner would grant building rights as a permitted use of the pipeline easement and the width of the easement would be wide enough to accommodate construction activities. Alternatively, a peasant knocks on your door. The gas company he represents does not want to lease your oil and gas rights; however, it wants to lay a pipeline through your country to transport its gas and possibly other substances. Do you need a right of way agreement? What are the things to consider to protect you and your country? The Federal Income Tax Code treats proceeds received for the granting of easement (the sale of a share of the property) as long-term capital gains if the landowner owned the property for more than one (1) year before granting the easement. This income is subject to federal income tax for the year received. But the proceeds received as compensation for damage to the property caused by the presence of the pipeline reduce the landowner`s base in the property (the amount the owner paid for the property). Federal income tax on the portion of the damage to the proceeds is not due until the landowner has sold the property. Therefore, by dividing the payment between the subsidy and the damages, the landowner may be able to delay the payment of federal income tax on the portion of the compensation until he sells the property. See IRS Publication 544 for detailed information on the taxation of pipeline easements (called involuntary conversions) (www.irs.gov/publications/p544/).
The purpose of the easement is to specify which substances the pipeline is authorized to carry. In general, the landowner would be wise to limit the use of the pipeline to natural gas and its components and to prohibit the use of the pipeline for other substances such as sewage, sewage and oil. In many cases, a landowner`s gas lease can allow a single pipeline to be installed to the wells from which they receive royalties. Keep in mind that in almost every case where a company applies for a pipeline right-of-way agreement, much more authority is requested for operations on your property and for permission to install pipelines that are not authorized under your gas lease. Easement may be planned for lands subject to restrictive agreements that may indicate the location and required depth of pipelines. Review any restrictive covenants to determine how they might be applied. Another company might want an easement on this pipeline easement (power lines, water pipes, gas pipelines, etc.) in the future. The landowner should include a provision that he or she may grant all other easements on the property and in the easement area that do not unreasonably affect the use and enjoyment of the easement by the pipeline company. Assessing landowner leverage is essential in any pipeline negotiation.
Landowners need to understand that there are countless oil and gas lease forms and additional gas lease terms that come into play in pipeline negotiations. A single sentence or clause buried in a gas lease or addendum can completely change the impact of pipeline negotiations in favor of the landowner. Recently, we were faced with the bankruptcy of a company that owned oil and gas leases and pipeline rights of way. We discovered that the receiver can abandon an easement and the pipe in the ground. Legally, there is no recourse to the pipeline debtor company to obtain funds for the removal of the pipe. Most easement agreements require the Pipeline Company to bury the pipeline underground by at least thirty-six inches (36 inches). In order to maximize a landowner`s future development options, the landowner should ask the Pipeline Corporation to bury the pipeline underground by at least forty-eight inches (48 inches). This will meet some local, state, and federal development regulations. If a landowner had to choose between a pipeline that carries gas or other substances at high or low pressure, they would choose low pressure. What for? Because it`s safer..
.