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Family Ranch and Easement Agreements

by | Jul 26, 2022 | Commercial Property |

Around this time two years ago, I attended a family wedding that stands out in my memory for a few reasons. First, it was a “deep pandemic” wedding – rescheduled twice, outdoor-only, with a drastically scaled-down guest list and favors of hand sanitizer reading “in sickness and in health.” But more importantly, the rescheduled locale was 30 acres of ranchland that had been my grandparents’ homestead, which I thought I would never see again.

It seemed inevitable then that the cow pasture and live oaks planted by my grandparents would soon make way for a residential subdivision like the ones cropping up on all sides. As it turns out, the ranch had some development issues that made it a little harder to sell than expected. And, though I’m still on board with selling it to a developer, part of me was glad I didn’t have to say goodbye so soon.

I think about my attachment to that land every time I negotiate a pipeline easement for a ranch owner, or any other property owner for that matter. While many easement provisions apply categorically to benefit different types of property, every piece of land is ultimately unique, and each landowner has different priorities shaped by the individual current and potential future uses of that land. I approach every easement agreement with sensitivity to each property’s uniqueness and history.

Private pipeline companies are often much more willing to negotiate easement terms than public entities, partly because they are not affected by the constraints and privileges of governmental immunity. For example, they are able to indemnify the landowner from claims caused by the pipeline, which is difficult for public entities to do. As of January 1, 2022, the Texas Property Code requires private pipeline easements to include many common provisions that can help protect landowners, including:

  • A limitation on the number of pipelines, their dimensions, the type of substances they can convey, their burial depth, and the easement width;
  • A provision specifying whether the pipeline installation will use the double-ditching method, which preserves topsoil;
  • A provision specifying whether the easement is exclusive or non-exclusive;
  • Provisions specifying whether the landowner is entitled to additional compensation for any damages resulting from initial construction or subsequent pipeline work;
  • A provision describing the pipeline company’s obligation to restore the easement area after construction;
  • Prohibitions against use of the easement for purposes other than those described in the agreement;
  • A provision specifying the pipeline company’s access rights over adjoining property, if any; and
  • A provision requiring the pipeline company to carry certain insurance coverage.

While these requirements are a great start for landowners, they cannot take the place of experienced and individualized easement review. First, many of the new requirements only mandate that a certain topic be addressed but do not require it to be written in favor of the landowner. Second, additional provisions that almost always benefit a landowner, such as the aforementioned indemnity clause or a provision requiring notice of entry, are not included.

Finally, as mentioned, the individual needs of each property will dictate additional protections that may be necessary. For a developed property or one about to be developed, strong protections for the landowner’s existing and planned surface improvements often take priority. Limiting the impact of construction activities is always a top concern, but this can look very different for an urban business than for a property used for ranching, which can in turn differ substantially from a commercial hunting operation. In some areas, security protections are critical, while other landowners may be most concerned about erosion or making sure the easement surface is successfully restored in line with the surrounding vegetation.

In negotiating easement terms, timing is critical. The sooner you react, the easier it will be to negotiate these terms to suit your particular property’s needs.