Written By: Clif Little, OSU Extension Guernsey County, firstname.lastname@example.org or 740-489-5300
Temporary right-of-way grants and temporary waterline agreement are becoming more common in the shale development regions of Ohio. These documents involve important considerations on behalf of the landowner and should always involve your attorney. Below are a few of the points for the landowner to consider.
Negotiation-Landowners can start with the company’s grant contract or their own but always consult with an Attorney. Some companies work with two documents; a waterline grant and right-of- way grant.
Location-mark the area and obtain a map of the pipeline course. Be compensated if the line and right-of-way are moved. A landowner should be consulted prior to line movement and preferably approve any movement of a pipeline.
Have a clear Starting and Ending date for the construction installation and ending date for the grant. Agreements sometimes describe a means for grant extension, review this. There should be a described process to have pipe and equipment removed when the grant is complete.
Assignment in part or whole of right–of–way grant or sale of water- Can your agreement be assigned or sold to another company? Can the grantee assign the agreement in part and in whole? Can your water be resold at a higher price to a 3rd party? Landowners may not want the resale of water or may want the right to approve third party sales.
Width-Companies will ask for 50ft temporary right-of-way. Landowners may want to keep this width as small as possible: 15-30ft.
Temporary- Companies often have in the document the word permanent, be careful not to include these words in a supposedly temporary agreement.
For what purposes can the right-of-way be used? – Landowners assume water, this is a mistake. There may be in the document items that allow for the use of the right-of-way for other purposes, such as access to well pads, transportation of equipment/materials, etc. Landowners should carefully consider other uses of the area and receive compensation for this or negotiate these items separately.
Number and size of Line- the water line is usually 8 inches. Sometimes companies want a 12in or more than one line.
Landowners may want indemnification & arbitration clause – this is often left out of the initial offer. Check the location of arbitration. Landowners should be careful in the phrasing of arbitration clauses so that they may also take the matter to local court as an option.
What if the line breaks or leaks? Landowners may want the water meter at the water site and not at the destination. Landowners may want a contact person for the leasing company.
Payment- Can be on an annual basis or lump sum. Prices range for a temporary right-or-way and pipeline but typical price is $2 per foot per year for the two combined (waterline and right-of-way). Specify when payment is due and consequences of nonpayment. Water often sells for .7ths to .75ths of a cent per gal. Price of water could be graduated in the contract based on a rising scale as value of water increases.
Water-Landowners can indicate drawdown level of their water source.
Damages & reseeding – There is some damage when installing the line particularly on steep ground. There can also be damage to timber. There should be a statement of compensation for these damages. In addition, a written description of reseeded method and forage varieties should be included in the document.
Bury the Line- where you may want to cross the waterline with heavy equipment, it can be buried.
Where are the points of ingress and egress? Are there gates?
Where are water pumps to be located? If close to a home, they can be low decibel models.
A landowner should not sign anything until they and their attorney has reviewed all documents associated with their agreement. This includes the “order of payment” and/or the “bank draft”.