6.3.4: Value of Rights-of-Way
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Payments to landowners for granting right-of-way easements can vary significantly between pipeline operators, type of pipeline, and from location to location. Most payments for gathering lines involve a set dollar amount per linear foot (or per “rod,” which is 16.5 feet). In Pennsylvania, easement agreements for gathering lines have ranged from less than $5.00 to more than $25.00 per linear foot. Payments to landowners for interstate transmission pipelines are generally based on a value per disturbed acre and can be highly variable based on the prevailing property values in the area.
Easement payments may include restitution for damages to timber, crops, etc., or damages may be paid over and above the quoted value per foot or per acre. It’s important for the landowner to know exactly what is being offered and whether this offer includes damages. Some pipeline operators will also offer a “signing bonus” (a fixed dollar amount for signing an easement agreement) in addition to the payment per linear foot. Be sure to get the amount and terms of payments in writing before signing an easement agreement. Many pipeline companies use “bank drafts” that may look like a negotiable check but often will have stated conditions and limitations that prevent release of funds to the easement grantor. Study bank drafts carefully for all stated conditions and limitations on payment of the agreed funds.
- Payment terms
- Is it an option for an agreement?
- Easement income and damage may be taxed differently
- Consult with an accountant
- Always have an attorney review any contracts or agreements before you sign them