In December 2015, PennEast started sending “easement acquisition offer letters” to impacted landowners along their proposed route. Given the seriousness of the endeavor, and tremendous burden it’s going to place on property owners, you might think that they’d send out a detailed, complex proposal. I got a chance to look at a few of them for properties here in NJ, and I can tell you this is not the case.
Instead, the document is surprisingly short and relatively easy to read. The message is clear: for a very small one time payment, PennEast is asking you to more or less sign your rights away to them and give them carte blanche to do whatever the heck they want on your land.
Some of the details are probably what you’ve heard or suspected. Others might shock even the most jaded among you.
Here’s some notable features of these letters. Please note that I am not a lawyer and this does not constitute legal advice. This is simply my opinion of what the PennEast materials are offering, and the issues I see with the wording. If you’ve been offered a contract by PennEast I urge you in the strongest possible terms to contact a lawyer immediately, and if you cannot contact one of the citizens groups (or me) and we’ll get you in touch with someone who can help you.
- PennEast reserves the right to enter any part of your property at any time for “survey” purposes. Not just the ROW – any part at all. They have to give reasonable notice – but you can’t refuse, or even offer a time more acceptable for you. They simply tell you they’ll be showing up on date X and there’s nothing you can do about it. And I repeat – this is anywhere on your land. If you’ve got a 200 acre farm, PennEast is reserving the right to survey the whole thing for future projects any time the whim strikes them.
- No mention of consulting a lawyer. They include an offer letter that summarizes what PennEast wants and is offering, a contract, and a memorandum. They urge you to read it, call them if you have any questions, and then sign and notarize it and send it back, and PennEast will cut you a check. No where in the letter do they indicate what you’re truly giving away, and no where do they suggest you should consult a lawyer. Just give it a read and then sign away your rights!
- The letter is contradicted by the contract. They are offering a purchase price for the easement, and a “damage” price for damage they’re going to cause to your property. In the non-binding, not-a-contract offer letter, they indicate that their offer is a premium based on your land value. In the actual contract they state bluntly that the offer is based on what they think they can get away with, and specifically is not a statement about the value of the land they want to take. So people who can’t read legal documents and just go by the letter may think they’re getting a deal – when they are not.
- The values are far below market value for the size of the easement. Prepare to be massively underwhelmed by the offer.
- The contract is irrevocable and perpetual e.g. it’s forever. You’ll pay taxes on the land as long as you own it, but the easement is owned by PennEast for ever (unless they sell it to someone else).
- They reserve the right to add more pipelines into the easement. Or dig up the PennEast pipeline and make it bigger or smaller. And add or remove any kind of equipment or machinery they feel is “necessary or convenient”. There is also mention of other types of pipeline, opening the possibility of more than just natural gas running through your land.
- Use the ROW anyway they feel like it, whenever they want, without notice. So long as PennEast says it’s “reasonable” for their business, they can do construction, repairs, inspections, use vehicles, etc etc in the ROW. Any time they want. Without notice. Nothing you can do about it. So you are more or less losing your total right to the easement ROW.
- Unlimited land/road/driveway access. Go across your land, including all roads on your land, when ever they feel they need to if they feel the use of the pipeline is (in PennEast’s sole opinion) interfered with or endangered.
- Do whatever they want in the ROW. More than just do all of the pipeline things mentioned in other sections, one section notes that PennEast expressly has the right to do whatever is necessary or convenient to them within the ROW. Yes, that’s right – if PennEast thinks it’s “convenient” for their purposes, they can do it. If they want to put a pressure relief valve next to your house? They an do it. How about a monitoring shack with a 24 hour guard? Yes they could do that too.
- There is no guaranteed route on your land. The contract only stipulates the dimensions of the ROW. It includes a diagram of the potential route across your land – but that route is only an example and is not binding. PennEast explicitly says they can change the route on your land for whatever is necessary for “efficient” construction of the pipeline. If you sign this contract as is, you’re allowing PennEast to put the pipeline anywhere on your land they’d like, and you can’t say boo about it if they put it somewhere you don’t like.
- You can’t make any changes along the ROW without PennEast’s approval. Pretty much anything more ambitious than mowing the grass will require PennEast’s approval. And they can say no, and you are probably stuck if they do.
- You have to give PennEast additional temporary work space if they want it during construction. If PennEast thinks they need more space for construction beyond what’s in the contract, you have to give it to them.
- Yes, there’s a save harmless clause.
- They can sell the easement to another company or individual. You have no say in this at all.
- They don’t have to build the pipeline. If the pipeline is defeated – PennEast still owns the ROW and can do what they like with it.
- Confidentiality clause. If you sign the contract, you can’t tell anybody any of the terms of the contract.
7 thoughts on “Signing your rights away”
Great advice to talk with your lawyer.
This document has some terms you might consider:http://msue.anr.msu.edu/uploads/235/29659/Sample_Pipeline_-_Easement_and_Right_of_Way_Agreement_Ohio.pdf
And doesn’t the secrecy clause apply only after the contract has been signed by both parties?
Jeff, yes, you’re right. None of the clauses are in effect unless the contract is actually signed and executed.
This is exactly what I thought when I read and reread the contract when it arrived. Beware of what they don’t say in it but is implied.
Joan, yes, exactly.