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  1. #1

    Default What's a Reasonable Value for Granting a Utility Easement

    My question involves an easement in the state of: Washington Puget Sound Energy wants a 290'x15' electrical utility easement how do i determine value of the easement?
    How I determined value of easement.
    I determined the value of the affected property as a whole parcel (290’ x 15’ of road frontage). Price per square foot as per Pierce County Tax Assessors land value ($180,000 for 98446 sq. ft. parcel)
    I then divided the total tax assessed value of the affected property parcel by the total number of square feet contained in the parcel to obtain a value for our property per square foot.
    I calculated the square footage of the property affected by the easement (4,350 sq. ft. easement).
    I finally multiplied the square footage of the easement by the per-square-foot value of the property to provide the tax assessed value of the easement ($ 1.82 per sq. ft).
    They offered .53 cents per square foot. Are they fair? Total value land with home approx. 320,000 should I calculate square footage with land and home?

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  2. #2
    Join Date
    Aug 2010
    Location
    Maine
    Posts
    201

    Default Re: Easements - Pse Wants a 290'x15' Electrical Utility Easement How Do I Determine V

    I would negotiate for whatever you can.

    I'm not an expert in real estate valuation, but the dimensions of the easement would most likely never conform to a marketable parcel, ie there is no practical way to build a house on a 15' wide parcel. This may be the reason that the offer is $0.53.

    Are you under any obligation to grant an easement? If the price wasn't right, I'd have no qualms about walking away.

  3. #3
    Join Date
    Oct 2007
    Location
    Ohio
    Posts
    2,357

    Default Re: Easements - Pse Wants a 290'x15' Electrical Utility Easement How Do I Determine V

    If they have the right to appropriate a right of way, and fail to reach a negotiated agreement, they will be able go to court in a condemnation proceeding and sue you for it.

    It may go something like this:

    They will hire a certified appraiser to determine the value. The appraiser may come up with a value for your overall parcel which is greater or smaller than the tax valuation. Then a determination will be made as to what percentage of the value of the property burdened will be reduced. As they are not taking all of the rights to the property, it will be less than 100%. Since they are only looking to take a 15' width, they are not going to be installing a major line. Perhaps it may be underground. You can ask and find out.

    If you disagree with the valuation of their offer you can negotiate. You can hire your own appraiser and get an independent appraisal. If they take you to court, their offer goes off the table and you will get what the court decides. It will usually be exactly what their appraiser has determined. If they have deposited the full amount of the appraised value with the court beforehand (sometimes required by the court) the court will give you a settlement check and you are all done at that point.

    Of course you can get an attorney, ask for a jury trial, bring in your own expert witnesses, but they will get the easement in any case. Your legal costs will likely far exceed any additional funds you will get from a better valuation.

  4. #4

    Default Re: Easements - Pse Wants a 290'x15' Electrical Utility Easement How Do I Determine V

    It is overhead line 115kv Transmission lines and will also encumber 15 foot wide road frontage for other property owners for miles. They told us they are going to use 60 - 70 foot poles.
    Irvin Parrett

  5. #5
    Join Date
    Apr 2008
    Posts
    176

    Default Re: Easements - Pse Wants a 290'x15' Electrical Utility Easement How Do I Determine V

    Please be sure to read the document. They usually include lots of land rights they don't need now. If it's for a 115 KV line then they must have more area, road right of way area etc. 15 feet isn't wide enough for a 115 KV line. Look for things like fiber optic rights, telephone, cable, etc. Look for the right to relocate the line, now where is that relocated line going to go and are they going to pay you for the new area to be used, are they going to pay for any additional damages, trees? In most states, the money you get out of court is taxable. The money you get from the court is damages and not subject to taxes in most states. Are you dealing with a contract agent or an agent of the utility? The document will also give them the right to assisgn the rights either in whole of in part. Now ask yourself this question, if you sign that document "how many people, companies, utilities, etc can use that easement? Its not the money, its the language in the document.

  6. #6

    Default Re: Easements - Pse Wants a 290'x15' Electrical Utility Easement How Do I Determine V

    I understand most of the contract, but I am having a problem or concern with #5 the indemnity clause (i'm not understanding it at all) and #7 Successors and Assigns (do they have the right to assign the easement with other utility companies and any else?). It is also a nonexclusive perpetual easement.


    1. Purpose. Grantee shall have the right to use the Easement Area to construct operate, maintain, repair, replace, improve, remove, and enlarge one or more utility systems for purposes of transmission, distribution and sale of electricity. Such systems may include but are not limited to:
    Overhead facilities: Poles, towers and other support structures with crossarms, braces, guys and anchors: electric transmission and distribution lines; fiber optic cable and other lines, cables and facilities for communications.
    Following the initial construction of all or a portion of its systems, Grantee shall have the right of access to the Easement Area over and across the Property to enable Grantee to exercise its rights hereunder. Grantee shall compensate Grantor for any damage to the Property caused by the exercise of such right of access by Grantee.
    2. Easement Area Clearing and Maintenance. Grantee shall have the right to cut, remove and dispose of any and all brush, trees or other vegetation in the Easement Area. Grantee shall also have the right to control, on a continuing basis and by any prudent and reasonable means, the establishment and growth of brush, trees or other vegetation in the easement area.
    3. Trees Outside Easement Area. Grantee shall have the right to cut, trim remove and dispose of any trees located on the Property outside the easement area that could, in Grantees sole judgment, interfere with or create a hazard to Grantee’s systems. Grantee shall, prior to the exercise of such right, identify such trees and make a reasonable effort to give Grantor such prior notice when trees are cut, trimmed, removed or otherwise disposed of in response to emergency conditions:. Grantor shall be entitled to no compensation for trees cut, trimmed, removed or disposed of except for the actual market value of merchantable timber (if any) cut and removed from the Property by the Grantee.
    4. Grantor’s use of Easement Area. Grantor reserves the right to use the easement area for any purpose not inconsistent with the rights herein granted, provided, however, Grantor shall not construct or maintain any buildings, structures or other objects on the Easement Area and Grantor shall do no blasting within 300 feet of Grantee’s facilities without Grantee’s prior written consent.
    5. Indemnity. Grantee agrees to indemnify Grantor from and against liability incurred by Grantor as a result of Grantee’s negligence in the rights herein granted to Grantee, but nothing herein shall require the Grantee to Indemnify Grantor for that portion of any such liability attributable to the negligence of the Grantor or the negligence of others.
    6. Abandonment. The rights herein granted shall continue until such time as Grantee ceases to use the Easement Area for a period of five (5) successive years, in which event, this easement shall terminate and all rights hereunder, and any improvements remaining in the Easement Area, shall be deemed to have occurred by reason of Grantee’s failure to initially install its systems on the Easement Area within any period of time from the date hereof.
    7. Successors and Assigns. Grantee shall have the right to assign, apportion or otherwise transfer any or all of its rights, benefits, privileges, and interests arising in and under this easement. Without limiting the generality of the foregoing, the rights and obligations of the parties shall inure to the benefit of and be binding upon their respective successors and assigns.

  7. #7
    Join Date
    Apr 2008
    Posts
    176

    Default Re: Easements - Pse Wants a 290'x15' Electrical Utility Easement How Do I Determine V

    On the fiber optic make the document say " fiber optic and any other communication system or systems shall be for intra company use only".
    Some of 5 is OK. The second part of 5 isn't at least I wouldn't sign it.
    7. Change to- the rights herein granted are assignable to the successors of the Grantee only.
    Remove enlarge from number 1.

  8. #8

    Default Re: Easements - Pse Wants a 290'x15' Electrical Utility Easement How Do I Determine V

    I modified PSE's contract to read as follows.
    1. Purpose. Grantee shall have the right to use the Easement Area to construct operate, maintain, repair, replace, improve, remove, and one or more utility systems for purposes of transmission, distribution and sale of electricity. Such systems may include but are not limited to:
    Overhead facilities: Poles, towers and other support structures with crossarms, braces, guys and anchors: electric transmission and distribution lines; fiber optic and other communication systems shall be for intra company use only.
    Following the initial construction of all or a portion of its systems, Grantee shall have the right of access to the Easement Area over and across the Property to enable Grantee to exercise its rights hereunder. Grantee shall compensate Grantor for any damage to the Property caused by the exercise of such right of access by Grantee.
    2. Easement Area Clearing and Maintenance. Grantee shall have the right to cut, remove and dispose of any and all brush, trees or other vegetation in the Easement Area. Grantee shall also have the right to control, on a continuing basis and by any prudent and reasonable means, the establishment and growth of brush, trees or other vegetation in the easement area.
    3. Trees Outside Easement Area. Grantee shall have the right to cut, trim remove and dispose of any trees located on the Property outside the easement area that could, in Grantees sole judgment, interfere with or create a hazard to Grantee’s systems. Grantee shall, prior to the exercise of such right, identify such trees and make a reasonable effort to give Grantor such prior notice when trees are cut, trimmed, removed or otherwise disposed of in response to emergency conditions:. Grantor shall be entitled to no compensation for trees cut, trimmed, removed or disposed of except for the actual market value of merchantable timber (if any) cut and removed from the Property by the Grantee.
    4. Grantor’s use of Easement Area. Grantor reserves the right to use the easement area for any purpose not inconsistent with the rights herein granted, provided, however, Grantor shall not construct or maintain any buildings, structures or other objects on the Easement Area and Grantor shall do no blasting within 300 feet of Grantee’s facilities without Grantee’s prior written consent
    5. Indemnity. Grantee agrees to indemnify Grantor from and against liability incurred by Grantor as a result of Grantee’s negligence in the rights herein granted to Grantee.
    6. Abandonment. The rights herein granted shall continue until such time as Grantee ceases to use the Easement Area for a period of five (5) successive years, in which event, this easement shall terminate and all rights hereunder, and any improvements remaining in the Easement Area, shall be deemed to have occurred by reason of Grantee’s failure to initially install its systems on the Easement Area within any period of time from the date hereof.
    7. Successors and Assigns. The rights herein granted are assignable to the Successors of the Grantee only.
    Will this language be better?

  9. #9
    Join Date
    Apr 2008
    Posts
    176

    Default Re: Easements - Pse Wants a 290'x15' Electrical Utility Easement How Do I Determine V

    Looks better. Now see if they will accept it. It generally cost the utility up to 20K to condemn an easement. Not including the award to the condemnee. See if they will negotiate.
    Let us know.

  10. #10

    Default Re: Easements - Pse Wants a 290'x15' Electrical Utility Easement How Do I Determine V

    Change #4 to read other "obstructions" instead of other "objects".

    Most utility companies will balk loudly at changing their documents some will flat out refuse and will go to court. I understand it's your property and you have rights they should respect. In their defense, they have rights too. Try to put yourself in their shoes and imagine managing thousands of miles of right of way and each owner has different rights. Don't cut Mr. Smith's tree here, don't enter from the right side on Mrs. Jones there. From a practical standpoint, it's almost impossible for the maintenance, construction, and forestry folks to properly adhere to - especially in an emergency. The crews don't have an attorney and surveyor in the truck.

    Non exclusive is good. That means you can convey the rights to other utilities. Let's say someone wants to run a sewer line in front of your property. You can grant that right. It will then be up to the pipeline company to coordinate with the electric utility to make sure the sewer line doesn't interfere with their existing rights.

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