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Greetings all,

I work for a local municipal utility in IL & am looking for feedback regarding how landowners are compensated for easements - whether it benefits them or not.

Do you compensate per linear ft, sq ft, how many poles/manholes are placed upon the property, etc?

Thanks,
Dale J. Giardina
Springfield, IL

Hi Dale!

I work for a utility here in WA. If a property owner is requesting service, we obtain the easement from them at no charge. If we are installing at our request, we usually compensate them based on square footage. The percent of fee value varies depending on the type of facilities and the location of the easement. For example, an easement inside building setbacks would be worth far less than an easement running throught he middle of a property.

Thanks!

Ira

Dale,

I am currently working for a number of utilities in the St. Louis area. If an easement is required at the request of the utility, compensation is normally paid on a price per square foot basis. A percentage of fee value is applied, in the same manner that Ira discussed. Recent land sales in the area are used to determine the fee value. Compensation is also offered if trees, landscaping or other site improvments will be disturbed.

There is a local electric cooperative that only compensates for easements when needed from owners who are not members of the cooperative. If an easement is required from a landowner who is in the cooperative, no compensation is provided.

Good luck!

Dale;

If you are interested; the local Illinois IRWA Chapter 10 is holding Course 403 "Easement Valuation" on December 10, 2007 in Springfield! Its a 1-day course that sounds like just what the doctor ordered. The course contact is Omer Moore at ILL Department of Natural Resources in Springfield at 217-524-3758.

I think the instructor should be very good also. Thanks.

I've worked all over the country for various utility companies and generally they pay from 50-100% of fee value based on comp sales for that type of property. Also based on zoning, engineering, etc. This is for the easement only. If construction is occurring, then additional temporary work space will be needed and that is based upon a 10% per anum rate of fee and looked upon as a rental. Revegetation and additional damages are another portion of the payment, again, depending on the circumstances of the affected property.

I'm actually working on a utility right of way/easement (overhead line)here in Louisiana. We typically give 90% of the fee value for drainage easements, but I'm not sure what to put on a utility easement. Since the utility easement is permanent in nature, and similar to a drainage servitude in that regard as well as the ability of the property owner to utilize the acquired property on a limited basis (ingress/egress,etc.) I would think a similar percentage would be applicable in this case. Can anyone offer some support or advice in this case?

The way I view it is how it impacts the property. A drainage easement would most likely limit all potential use of the underlying real estate. An overhead utility line might limit construction of buildings, and take space where the poles are, but may not limit use of the land underlying the easement for parking, landscape buffers, sidewalks, etc.

As mentioned above, the placement of the easement affects the percentage of fee as well. If it is along the frontage, and doesn't significantly restrict the use of the overall property, it has relatively little impact. If it traverses the center of the site, it dramatically reduces potential uses for the site overall, and therefore has a higher percentage of fee value and may have damages as well.

So, in short, there is no pat answer, it is situational and varies depending on property, local codes and regulations, and restrictions required by the specific easement.

Thank you very much. That was very helpful. I think your insight is spot on, so I guess I'm going to have to look at this project on a parcel by parcel basis.

I have just been approached by my telephone company. They want to have an easement through the front portion of my property. As they have written in the easement proposal, and have stated in conversation, they will pay me $1.00 for the transaction. Yes.....$1.00. I asked why that amount, and they basically told me it was just a token amount that may have been required many years ago to make the transaction legal. After reading some comments on this site, I really question if they are being honest with me. Does the utility company have to compensate me at all? Or, do they have to by law pay me fair market value for the easement area? Any advise would be greatly appreciated!

Todd,
I have been acquiring easements for 10 years now and it varies with each phone company. I have those that pay nothing, "for valuable consideration", to $3-5 per linial foot for a 4 - 10 foot wide easement. Is there a reason, such as lack of room in the public right of way, for them to want the line on your property?

Todd,
Eminent Domain is a constitutional right for a public good. Having said that, when a public agency condemns they are required to pay you market value .... the disagreement is always... what is market value.... don't sign the proposal until you ascertain what market value is.... $1.00 for a telephone utility line was market value a long time ago :) .... if you sign the proposal/agreement then you ahve given up your right ... also if they make an offer and you take it... you've just negotiated a sale of an easement....

What you are struggling with is the difference between negotiating an agreement to sell... which the utility company can do... they can make you an offer and you can accept or reject.... and being condemned for market value of the easement....

Typically the market value of the easement is a percentage of the market value of the whole property on a $/SF basis....

example.... your property is valued at $100/SF. The easement across your property can be worth 25% to 90% of that $100/SF based on the size of the easement and if the easment gives the utility company the wholesale right to put other utilites within the same easement or if you are only selling them and easement for this one telephone line.... (this is tricky and utility companies are very good at including language that lets them put multiple transmission lines in one easement)

Hope this helps...

GR

Todd wrote:I have just been approached by my telephone company. They want to have an easement through the front portion of my property. As they have written in the easement proposal, and have stated in conversation, they will pay me $1.00 for the transaction. Yes.....$1.00. I asked why that amount, and they basically told me it was just a token amount that may have been required many years ago to make the transaction legal. After reading some comments on this site, I really question if they are being honest with me. Does the utility company have to compensate me at all? Or, do they have to by law pay me fair market value for the easement area? Any advise would be greatly appreciated!