Easement Contract Tips

Nov 20, 2023

November 2023

See the printable pdf of this page here.

East Kentucky Power Cooperative (EKPC) is sending out land agents — sometimes referred to as “landmen” — who may approach you to sign a contract that will grant EKPC a powerline easement in exchange for a monetary payment. No matter how land agents present themselves to you, they will be acting 100% on behalf of EKPC. Their goal will be to get you to sign an easement contract quickly and at the lowest possible cost to EKPC. Making sure you get a fair price is not on their list, regardless of their claims.

Some of our neighbors in Jackson County and Madison County have already had visits from land agents, and you too may soon be visited. This paper will arm you with some facts, so you can negotiate with EKPC from a position of strength and not succumb to any fear-mongering or sketchy tactics a land agent might use to pressure you into a bad deal.

NOTE: This document does not provide legal advice, only pointers for you to do your own investigations and make your own well-informed decisions.

Basic Principles

A land agent may claim to be a neutral party, saying he’s only there to help make sure your interests are met. But that is not true — these folks are paid by EKPC and are there to serve their employer’s needs.

If you resist a land agent’s early offers, he will reach deeper into his bag of strategies. At some point, he may say things like:

  • “If you don’t sign today, you may not get as good a deal when you’re eventually forced to sign. Remember, I’m only in the area today.”
  • “Your neighbors have already signed and they thought the deal was fine.”
  • “You can get the check, or your neighbor can get the check. Which do you want?”
  • “You like having electricity, right? You don’t want to stand in the way of someone else getting electricity, right?”
  • “Sign now, or we’ll take what we need through eminent domain, and you’ll get nothing.”

These are largely empty threats — tricks to get you to sign quickly and at a low cost. Not all land agents are hustlers, but they all use various tactics to ensure the best deal for the company. They are not neutral, and as friendly as they may seem, they are not your friend. You do not need to speak with them, give them information, or allow them on your land.

Whatever a land agent says is not legally relevant. Any calculation sheets or information handouts they give you are also not legally relevant. Only what goes in the signed easement contract counts. An easement contract is legally binding; the land agent’s verbal assurances, flyers, and calculation sheets are not. Interacting with these folks verbally serves little benefit for landowners, and any information a land agent gathers during conversation may ultimately be used to undermine your best interests.

If you have signed a contract already and feel you were unfairly pressured into it, reach out to us or share your concerns with an attorney. The exact wording in your contract matters.

STRATEGIES FOR LANDOWNERS

(1) Understand that you CAN negotiate terms. At any point before signing a contract, you can negotiate and counter-propose. Ensure all contract terms are favorable to your interests. Here are some additional points to consider.

(a) Value: EKPC may use a couple of different strategies when they offer you a reimbursement amount:

  • A per-foot or per-pole price, standardized across the project. You would get the standard price times the feet of powerline or number of poles on your property. A one-price-fits-all method is unfair, since poles, powerlines, and easement areas will impact each property and its buildings differently. It’s also a poor method because your land value is not in the equation.
  • A percentage of the difference in before/after value. This is a more accurate method, in general. However, EKPC may try to base their calculation on the county property-tax valuation. In most cases, that amount is far less than the potential sale value of a property, so this approach already ensures EKPC is giving you a lowball offer.
  • Consider hiring a professional appraiser to estimate the current likely sale value of your property. Estimating the impact the powerline will have on the future sale price of your property is not easy, but just knowing what your property is worth now — and knowing that a powerline coming across it will reduce the future sale value by some amount — will better prepare you to negotiate with EKPC.

(b) Powerline position, size, and access routes: Require EKPC to add language to the easement contract specifying the physical size of the installed equipment and the electrical capacity of the powerline. This will prevent them from back-dooring a larger line into the easement in the future without renegotiating easement contracts.

(c) Easement maintenance responsibilities and methods: Because of the known health impacts of chemical pesticides/herbicides, you may want to stipulate that EKPC and its contractors cannot use them anywhere on your property. EKPC may counter that you would need to control vegetative growth under the powerline on your property yourself, but that is negotiable. Ensure the contract guarantees your own access to the easement area.

(2) You can say ‘no’. If you don’t want the transmission line on your property, or you decide EKPC is only willing to offer you a bad deal, you can refuse to sign the easement contract. EKPC may simply move the powerline to a route that does not cross your property, or you could eventually have to go to court in an eminent domain case. Consult an attorney. EKPC wants to avoid eminent domain because each case adds expense and delay. Stand your ground.

(3) Consult an attorney experienced in easement matters. See our separate handout on, “Finding Legal Representation”

CONTACT INFO:

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