What is a Utility Easement?
A utility easement is an easement that provides the necessary right of access and other rights to a utility provider such that the utility provider will be able to provide essential public services to the community. For instance, in Tennessee, the utility easement is necessary for the construction, installation, operation and maintenance of sewer systems, water lines, natural gas pipelines and electric power transmission lines.
On a personal property level, the easement gives the utility company the right to enter your property without notice and in the event of an emergency , without permission. Nonetheless, the easement does not grant the individual utility company the right to fragment your property by providing easements to other utility companies. It is important to consult a property attorney in regards to utility easements so as to understand the scope of your utility easement and to ensure that the utility company does not fragment your property by partitioning off parts of your property and providing easements to other utility companies. This is especially important if you plan on developing your property or subdividing your property.
Types of Utility Easements under Tennessee Law
Tennessee law contemplates several different types of utility easements: permanent, temporary, and blanket. All types of easements require a legal document to be filed with the appropriate county register to make them legally binding.
A permanent easement is essentially the permanent right by an easement holder to enter on, use, and occupy a specific area of the servient estate of the burdened estate. Permanent easements often contemplate the general right to locate facilities. They may contemplate changes in the location and/or size of the facilities throughout the duration of the easement. Some utility easements even require compensation payments, usually in the form of periodic monetary payments.
Although a permanent easement is "permanent," and while it may not be revocable in whole or in part, a permanent easement is not an easement in gross. That distinction is critical. The permanence of a permanent easement underscores the importance of ensuring that the precise scope and rights granted are clearly delineated in the easement. That will minimize boundary disputes when the owner of the servient estate and the utility holder differ on the rights granted. It will also guard against a potential argument that the utility easement holder has exclusive possession over the easement area if the owner contends that an easement was granted for the owner’s benefit but the owner’s benefit has been defeated.
The second form of easement is a temporary easement, which grants a party an interest in real property for a limited time. A temporary easement does not alter the use of the land at the end of the limited period. The temporary easement terminates by its own terms based on the duration of time set forth in the easement. One common example of a temporary easement is a temporary construction easement, which permits the easement holder to access the property for a limited period of time for construction activities. Another example of a temporary easement is a temporary site easement which allows for a parcel to be used temporarily for an activity such as storing equipment and materials necessary to support construction projects or other activities.
The third form of utility easement is a blanket easement. A blanket easement permits the easement holder to place above ground or below ground fixtures and facilities in virtually any area of the subject property, and it allows for the easement holder to relocate any currently installed fixtures or facilities, without the need for specific notice or consent. While easement holders rarely utilize such broad blanket easements in practice, their potential for abuse is serious. For example, a blanket easement could be used to authorize the easement holder to install a transmission line across the property in a location that would effectively sever or cut off access to part of the property by the owner. When granting such easements, property owners should ensure that the purposes of the easement and the scope of the rights authorized by the easement are very clearly delineated. Otherwise, the owner may have little recourse if the easement holder seeks to take action outside the scope of the owner’s intent.
Easement Statutes: The Tennessee Utilities Code
Utility easements in Tennessee, like in most jurisdictions, are governed by a combination of statutory and common law. These laws aim to set a clear, fair framework for how easements should be granted, maintained, and terminated.
The most relevant statutes in Tennessee can be found in Title 54 of the Tennessee Code. Specifically, T.C.A. § 54-5-103 governs the rights of utility companies to lay down power lines across land owned by another party. The statute essentially allows utility companies to construct and use power lines and other utilities in, on, or over land owned by another person, as long as they first obtain the written consent of the landowner. This section grants certain rights to utility companies which may not apply to other types of utility easements on private land.
The Tennessee Constitution also plays a crucial role in utility easement laws in the state. Article 1, Section 32 of the Constitution provides for the protection of private property, ensuring property owners are compensated for any damage to their land from the exercise of eminent domain, for example. This right is applicable when dealing with easements over private property, although note that an easement is not a taking.
Easements of all kinds are also governed by the common law; in fact, before the passage of Title 54, 54-5-103 was a part of the common law. Judges interpret the meanings of statutes and clarify legal rules in their rulings so that all lawyers and people who own easements are bound by the same rules. The courts also refer to precedents from other jurisdictions when considering issues with easements.
Property Rights with Easements
A utility easement gives utility companies the right to use a portion of your property, known as the easement area, for their equipment and operations. But this does not mean that the utility company has carte blanche over the rest of your property. You retain full control and rights to everything outside of the easement area.
This area is not meant for the construction of any major structure that would interfere with the utility company’s access to their equipment or their ability to operate it. Your ability to build outside of the easement area may be further limited by what is being placed in the utility easement area itself.
You are allowed to build on your property, so long as you do not interfere with the utility company’s access to their equipment. However, building on the easement may require utility company approval:
An easement does not give the utility company the right to bring other parties onto your property without your consent. This means that the utility company cannot send other contractors to your property without first asking for permission.
Whenever you sell your property, even if the utility company has previous work on your property, anything being done in the utility easement area must be disclosed on the property transfer documents.
Resolving Easement Disputes
Disputes between utility easement holders and property owners tend to follow a familiar pattern. The utility company will be performing work on the easement, and it will cause damage to the underlying property, such as cutting down trees, damaging the drainage system, or even causing flooding on the property. Often times the damages will leave the property owner with a diminished value of his or her real estate. Every Tennessee lawyer who functions as a title company agent has likely heard every combination of run-on sentences in the English language that you can think of, the end result being a frustrated property owner who is angry about almost everything in life. From the standpoint of representing the property owner, you have to keep your cool and do your best to help them see the situation rationally.
Where known damages have occurred, it is best to notify the utility company of the damages right away, and to itemize the damages and attach receipts for all money already disbursed. Utility companies will want to negotiate these damages rather than arbitrate them or litigate them. In such an instance, the utility company is likely to give a little but is going to take a little, too . For instance, if the utility company agrees to reimburse the owner for flood damages of $10,000, it is likely to request that the owner execute a General Release in favor of the utility company to cover damages that may occur again in the future.
One of the most common issues with easements is that the utility company builds its line, and it encroaches upon the neighboring landowners property by several feet. In that situation, the landowner should contact the utility company immediately, and obtain an assessment of the lot including the area encroached upon, and photographs of the encroachment. It can take years to get the utility company to relocate the utilities, so the key is to be diligent and active about contacting them.
Nobody expects that a storm will bring down a communication tower and then tear the utility lines apart, but when it does, homeowners may find parts of a pole across their driveway, and utility lines wrapped around their trees. In that situation the homeowner needs to contact the utility company right away because the utility company is going to be interested in billing the insurance and making sure the lines are cleared and safe as soon as possible.
Finding Easements on Property Prior to Purchase
Tennessee property purchasers should review the following items to determine whether a utility easement or other subordination has been placed on their property:
(a) Plat, which is the supplementary map or plan of a subdivision, showing access to a public road, sidewalks and/or easements for common use and easements for utility lines. Many times, a plat will show utility easements which may be recorded later by the utility company.
(b) Title Commitment, issued by a title insurer, which will reveal generally any easements and/or subordination instruments on record with respect to the subject property.
(c) Title Policy, which will also reveal any easements and/or subordination instruments on record with respect to the subject property. In Tennessee, it is not uncommon for easements to not appear in the title policy, but to appear in the title commitment.
(d) Deeds to the property, by examining the "chain of title," or the succession of ownership, granting, and/or trust interests to the property through which the right-of-way passes.
(e) Subordination instruments: Since 1979 Tennessee has a recorded subordination statute which allows for the subordination of a utility easement so that the easement does not create a cloud on a subsequent lender’s or buyer’s title.
(f) Deeds of Trust: In Tennessee, when a lender places a mortgage or deed of trust on the property and the prior recorded easements are not subordinated (see (e) above), the easement will be subject to the deed of trust, or vice versa, if the easement was created prior to the deed of trust.
Changing or Ending an Easement
In some instances, utility easements in Tennessee can be modified or terminated under certain conditions. The utility may seek a modification through a legal request that is supported by a statement prepared by the utility engineer or a registered land surveyor auditioning the proposed change, which states the location, dimensions, and purpose of each portion of the utility easement in the affected area. A beneficiary (known as "the developer") may also seek the termination of an existing utility easement, so long as they (or their predecessors) have been in continuous control of the property for at least 20 years without any interference or objection from the utility. A court decree may be necessary to declare the termination.
The statutory provisions that govern the termination of prior estate easements in Tennessee require an action at law or in equity to quiet title. The party seeking enforcement of, or modification to, a utility easement would file a complaint in Chancery Court to establish the rights afforded by the easement in question (or the right to seek modification or termination of the easement). All parties with an interest in the land subject to the easement (whether they are known or unknown) must be added as defendants to the suit pursuant to Rule 71 of the Tennessee Rules of Civil Procedure. All owners and claimants of the property must be notified as otherwise required in Rule 71.03. The court will determine the extent to which rights or conditions of the easement may have been violated, if applicable, and whether the easement may be extinguished due to non-use at the hands of the beneficiary. If the court determines that the rights or conditions of the easement have been violated, an order may be entered to terminate a portion of the easement and modify its estate and estate rights to reflect the change.
Easements and Property Development
In navigating the complexities of property development, Tennessee attorneys must often address the critical issue of how utility easements can affect a client’s plans. Knowing where utility easements are located can save developers from costly missteps that would occur if construction or installation activities are not carefully planned.
The most direct impact of utility easements on property development is the placement of improvements. For example, there may be limitations on what and where structures can be built. On public land, building restrictions must comply with both local zoning requirements and utility easement agreements. Restrictions could include height, size and aesthetic considerations. Complying with these restrictions helps to avoid the more immediate risk of having a structure removed—a very real problem for the unadvised or uninformed.
Zoning compliance is another area of concern, particularly if the easement is located on rural land where zoning laws may be less stringent than they are in urban areas. Purchasing land subject to an easement can also have a ripple effect on later stages of development. For instance, even if structures are built on the land subject to the easement, the owner may find that zoning restrictions on the easement prevent them from receiving zoning permits to add additional structures or make alterations to existing ones , hampering their growth.
Though it may seem impossible to mitigate the impact of easements, the adroit attorney may still find ways to appease their upper management stakeholders. One obvious solution would be to ensure that the client engages in careful and complete due diligence in locating all easements on a property before closing. A title search by a well-informed legal professional can help to locate and identify all easements. It should be noted, however, that easements on public land do not always appear on title searches, and therefore require other means of locating them, such as by searching publicly available land records.
After a search is complete, the developer may also consider acquiring land subject to a utility easement on behalf of another. A frequently seen model for doing so is a sale of land subject to an easement from a property owner to a well-connected entity—such as the utility company or an affiliated company—that will then lease back the same land to the owner who sold it—although often at a reduced rate than would be normal for land without the restrictions of an easement. Because the utility company may, to an extent, control the conditions on which land subject to an easement is used, they can determine whether they will allow another party to use that land, and may benefit from being able to sell or lease the land they occupy in order to offset their costs.
No Responses