Street vacations or closures of public ways can be very problematical to utilities, Telco’s and cable companies. If one of the above organizations is occupying a public right of way it is usually because of a franchise right or license.

If a property owner requests that a street or alley be closed. They petition the local governing agency (village, town, city, county, etc.) If the governing agency agrees that the public way could be closed then the process begins.

Now comes the important issue for occupants of the public way: a reservation must be requested of the governing agency. This means that when the agency completes the closure, a reservation for an easement is part of the resolution.

Special Note

Most states, not all, have enacted state statutes making it mandatory for governing agencies to notify all occupants of a public right of way before any closing or vacation can occur. You can get on your state’s web site and type in street vacation or road closures to find out what the law is in your state.

If you have any questions or comments please e-mail Jerry Moran at nmi@flash.net

Lack of awareness of the underlying fee can create very expensive problems. What is the underlying fee? When you purchase a piece of real property you receive “fee title.” When you grant an easement over a portion of your property, the easement holder has a “non-possessory interest” in it and you still own the land, the “underlying fee.”

Following are some examples of problems that occurred because of the lack of awareness of just who owns the land a company or agency is crossing.

A few short years ago in Indiana, AT&T had a fiber Optic cable in railroad right of way. The AT&T right of way agent had acquired a permit from the railroad and AT&T was paying the railroad large annual fees for use of the property. Subsequently, the railroad decided that revenue from this stretch of track was not profitable and decided to abandon the right of way that included removing the track and ballast. The AT&T cable remained in place. AT&T was contacted by an attorney for one of the abutting property owners and was asked to remove its cable. AT&T countered that they had a permit to be there, granted by the railroad company. It turned out that the railroad only had an easement and the abutters owned the underlying fee. AT&T agreed to pay landowners $45,000 per mile in exchange for a permanent easement. The figure of $45,000 is the average payment per mile, which is net to the landowners. AT&T would also pay the landowners’ attorneys’ fees and all class action costs.

The next case occurred in San Diego County, California. State highway 76 (a two lane blacktop highway) crossed through the middle of a ten-acre parcel owned by the Pauma Band of Mission Indians. This was a satellite parcel of the main reservation and was used for agricultural purposes. It turned out that the state had acquired the roadway from the county in the 1920’s. The reservation was created by the Federal Government in 1886. Pacific Bell and San Diego
Gas & Electric shared a joint pole line within the right of way of the state highway. The utilities each received a Summons and Complaint from the U.S. Attorney demanding payment for the trespass. Each company paid a significant dollar amount in exchange for a license to remain in place. The ten-acre parcel was not receiving service from either company. The state also paid a large fee to keep the roadway open.

The issue in the above case was that when the county paved the road in the early 1900’s there was no awareness of who owned the underlying fee. Someone may ask why prescriptive rights were not attempted. A prescriptive right cannot be claimed against a governmental entity. Remember, Indian land is sovereign and the U.S. government is the trustee.

I welcome your comments.

During a ten year stint as a right of way agent for a telecom, a frequent refrain heard from the outside plant engineers was something like “Let’s put the pole line on this property, I’m sure that we have prescriptive rights.” Or even better, “let’s build the pole line here, nobody owns this property.” Of course they were wrong on both counts. An article about the latter issue will be in another article.

What are the requirements for obtaining a prescriptive easement?

We must have an explanation of where Prescriptive Rights come from:

Adverse possession is the acquisition of title to real property by continuous possession for the prescribed period of time. Interestingly, a person’s right to acquire real property by adverse possession begins with the wrongful occupation of another person’s property. In addition to the elements listed below for prescriptive rights the claimant must pay the property taxes.

The underlying philosophy of the doctrine of adverse possession is that land use has historically been favored over disuse, and therefore he who uses land is preferred in the law to he who does not, even though the latter is the rightful owner. Hence our laws of real property have sanctioned certain types of otherwise unlawful taking of land belonging to someone else, while, at the same time, with respect to other types of property have generally taken a contrary course.

Before continuing, it must be pointed out that a prescriptive easement cannot be taken from the following entities:

♣ Convicts
♣ Incompetent owners (under age or mentally incapacitated)
♣ Anyone who is physically unable to visit the property regularly
♣ Any governmental agency

Probably the most misunderstood of all the kinds of easements. Prescription is the shakiest type of easement because most legal departments and independent attorneys find that it is too difficult to defend. The elements involved to claim a prescriptive easement are:

• Open and notorious
• Continuous and uninterrupted for the statutory period of time
• Hostile to the true owner
• Under a claim of right
• An “Action to Quiet Title” court action must be filed to “perfect” the prescriptive right
• Let’s boil each item down one at a time.

Open and notorious: visible to the real property owner with no special knowledge needed to recognize the presence of a claimant. i.e., a roadway, driveway, utility pole, fence, etc.

Continuous and uninterrupted use for the statutory time: the claimant must occupy the land for the statutory time; see below, with no interruptions of the time required.

Hostile to the true owner: if the fee owner of the land attempts to eject the claimant and fails then that is truly hostile.

Under a claim of right: the claimant is attempting to exercise a right in the form of an easement.

Action to Quiet Title: this action occurs when the claimant has fulfilled the previous four items and the court finds in favor of the claimant. The court essentially grants the prescriptive easement.

XXX

If it was always as cut and dried as we have seen above, then there would be a lot more prescriptive easements. Let’s use a power company as an example. The XYZ power company has a pole on your vacant land. Since the land is vacant there is no power being provided to your property. The pole has been on your land for the statutory time frame. It is obviously visible; the company is claiming an easement right. The company decides to file an action to quiet title. You have made inquiries to the company about removing the pole from your property, but no demands, no letters. You are subpoenaed for the trial. You testify that you really didn’t have an issue with the pole, in fact, whenever you working on the property and some power workers were doing work there you always offered them a soft drink during warm time or hot coffee in the winter. You were essentially giving the power company verbal permission to stay there.
The above scenario brings out two issues:

1. Since you have given verbal permission, a license, to the company there is no hostility. See the third bullet above. Remember from real property law, a license is revocable!
2. If you had given the company a license then the statutory time does not begin until now because you are now revoking the license.

Most utilities and telcos very rarely go to court. Most of the time they bluff. The property owners just figure that it is the utility or Telco and they must know what they are talking about. Now that is not an indictment against those companies nor are we going to get into a discussion on ethics.

The majority of cases filed for prescriptive easements have to do with access via a roadway or driveway. A recent case in Montana was over a road that crossed a section of land; we’ll call it parcel A. There had never been an easement granted. The adjoining parcel, which is owned by a farmer, used the road as its only access. This roadway has been in use for over sixty-years. A new owner now has possession of parcel A and he put a gate across the road, blocking the farmer. The farmer filed an action to quiet title and won in the court.

CAVEAT: Please consult an attorney for legal advice. Laws in the United States differ from one jurisdiction to another. Any law stated herein is for educational purposes only and may not apply to your particular circumstance.

Prescriptive Easements, Time Of Occupancy Required

State               Years

Alabama 20
Alaska 7
Arizona 10
Arkansas 7
California 5
Colorado 18
Connecticut 15
Delaware 20
District Of Columbia 5
Florida 20
Georgia 20
Hawaii 20
Idaho 5
Illinois 20
Indiana 20
Iowa 10
Kansas 15
Kentucky 15
Louisiana 30
Maine 20
Maryland 20
Massachusetts 20
Michigan 15
Minnesota 15
Mississippi 10
Missouri 10  (Not available for utilities)
Montana 5
Nebraska 10
Nevada 5
New Hampshire 20
New Jersey 20
New Mexico 10
New York 10  (Not available for utilities)
North Carolina 20
North Dakota 10
Ohio 21
Oklahoma 15
Oregon 10
Pennsylvania 21
Rhode Island 10
South Carolina 20
South Dakota 20
Tennessee 20
Texas 10
Utah 20
Vermont 15
Virginia 20
Washington 10
West Virginia 10
Wisconsin 10
Wyoming 10

We in the right-of-way profession deal with many issues that sur­round our specialty. We talk about appraisals, relocation, property management, leas­ing, and more. There is very little de­voted to the issue of the lowly easement and the rights we acquire from private property owners and franchise rights from governmental agencies. I am going to address these topics from the utilities viewpoint. I suppose we could also call this a right of way agent’s primer.

What exactly is the right right of way?

1. It is the correct easement form, properly executed and notarized by all of the legal owners of interest in the property?
2. The description of the property on the easement form is exactly as that de­scribed in the deed.
3. The location of the easement on the property is adequately described and leaves no room for interpretation by others.
4. The grantors of the easement were fully informed of what would be placed within its boundaries.
5. The easement is not a blanket ease­ment. A blanket easement allows the easement holder to place their facilities anyplace on the property they wish.
6. The easement is properly recorded in the recorder’s/registrar’s office in the county/parish in which the prop­erty is located.
7. Your plant is installed within the boundaries of the easement.

Let’s address each one of the above items and see what they really mean.

• Legal Owners
• How do you know who has an inter­est in the property? Some might think that it is a simple matter of checking the deed or the tax assessor’s records. This couldn’t be farther from the truth.

• Here are some reasons why:

• Deeds do not have to be recorded until the current owner(s) sell the prop­erty.

• Other transactions could have oc­curred after the current deed was recorded.

• There could be a contract for deed in motion and not recorded. Some juris­dictions, not all, require that the con­tract be recorded.

• If the property is leased when you ac­quire your easement, the lessee can keep you from exercising your ease­ment rights under some circumstances if the lessee doesn’t sign a release.

• If there is a life estate on the property, do you know who must sign the ease­ment?

• The tax records are always a good place to start looking for ownership; however, that is all that they can really be used for. In most jurisdictions the party paying the taxes is the name that appears in the records. It is not neces­sarily the owner(s) name that appears.

• Is there one or more mortgages/trust deeds on the property? When do you take subordination from the lender(s)? Do you realize that without subordination, your easement could be made invalid if the lender takes the property back due to default by the property owner(s)? The lender has as much to say about the property as the current owner(s). Sometimes this infor­mation comes as a shock to some right of way practitioners.

Correct Property Description

The correct description of the piece of land that you want an easement on is critical. A land description is unique to:

• that particular parcel, to the exclusion of all other parcels of land in the world. An incorrect description may invali­date the easement taken.

The following are the most common ways to describe real property.

•    Metes and Bounds (measurements and boundaries)

•    The rectangular method (section, township and range)

•    Subdivision (lot and sometimes block)

•    Using the State Plane Coordinate Grid System

Location of the Easement

• The easement may be described in many different ways. The most com­mon is metes and bounds, which re­quires a survey.

• Next is a sin­gle, two- or three-way call, which may sometimes be accomplished without a survey if the property boundaries are clearly evident.

• Sometimes an exhibit “A” is used, which is just a pictorial of the area encumbered.

Owner(s) Fully Informed

We have all experienced “buyers re­morse” at one time or another. Imagine how a property owner feels after he or she has granted an easement to the local utility for a buried line and one small above ground device. On the day of construction the owner is confronted with the largest Caterpillar tractor made instead of a light duty Ditchwitch trencher, and a crane lowers a huge manhole into place instead of the small device. The easement document may allow for such equipment, but imagine how the property owner feels. This can happen, and if it does, someone’s tele­phone is going to start ringing at the utility.

Handling Trespass Complaints

Frequently an attorney is con­sulted—which can be very expensive (even in-house attorneys cross charge the expense to your department in most companies now)—on right-of-way matters when it could easily have beentaken care of by someone properly trained in such matters. In fact, a frequent prob­lem for many utilities is the following sce­nario:

A property owner calls to complain about a pole on their property that they never saw before. They are absentee own­ers and recently decided to build their re­tirement home on the property. They can’t find anything in their title report or deed that indicates that your utility has any rights to be there. What are your options?

Try to find some sort of easement or per­mit in your files. None can be found. Then you must weigh the cost of moving the plant versus hiring an attorney to defend your presence on the property. Without some documentation, the attorney is likely to say that it is very difficult to de­fend in court and what appears to be trespass.

Perhaps the pole was placed with verbal permission years ago. It probably was be­cause you know that your company has never trespassed. You do some investigat­ing and discover the pole was placed there 22 years ago, but the current owners bought the land six years ago. You won­der why they never noticed the pole be­fore. However, when they bought the property they really hadn’t thought about where they would ultimately build their home until now. The pole is in the middle of the proposed house, and they want you to remove it at your ex­pense.

You might consider an optional ap­proach. It doesn’t always work but it’s worth a try. There is something in the law called Laches. It means “failure to act within a reasonable period of time.” This can be interpreted to mean that the owner, upon purchase of the property, did not inquire as to the rights of the utility and therefore has given “tacit” permission to leave the pole there. Will it stand up in court? Not likely, but it has worked as a bluff on innumerable occasions.

Another tactic to use is “Prescriptive Rights.” Prescriptive rights can be in­voked if your plant is clearly visible (open and notorious), in continuous use for the statutory time (five to 30 years depending on which state you are in), under a claim of right, and it must be adverse to the property owner. The use of prescription is much stronger than laches because it is a real­istic possibility if it is taken to court and all of the conditions for obtaining a pre­scriptive easement have been met. The court can actually grant the easement. The exception to this is in New York State, where utilities are prohibited from exercising prescriptive rights.

Sometimes, the inclination is to just move your plant, at your company’s expense, without any fight or negotia­tion. It is more cost effective in the long run to have a staff or engineering per­son, well versed in right-of-way mat­ters, than it is to refer it to an attorney every time a question arises about ease­ments or rights of way.

Remember: when asking property owners for an easement, put yourself in their place. Would you grant the ease­ment if this were your property?

First of all, what is the difference between an easement and a right of way? Many experts have given their opinion. The one I like the best is this: an easement is the legal granting of the right to use the land of another. The textbook definition of an easement is “ A non-posessory interest in the land of another.” A “Right of way” is what you build your plant upon. Think of a railroad right of way.

For years power companies and telcos got along with getting verbal permission from property owners to cross their land to place distribution power and Telco facilities of every stripe. When they were erecting pole lines they cut across large tracts of farm and vacant land. The engineer would ask the owner if it was ok to put the pole line up. With a nod of the head, a shake of the hand, and sometimes a bottle of the owner’s favorite beverage the companies were off and running delivering top quality service to the masses.

Of course the wireless communications industry woke the public up regarding the value of their land when a leasing agent from a wireless carrier offers a large monthly check in exchange for the right to erect a monopole and a hut on an owners property. When this happens the owner frequently eyes the local power company’s or Telco’s pole line and asks him/herself: I wonder how they got here in the first place? And why aren’t they paying me too!

Times have changed but has your company/co-op changed? We receive calls weekly from former students who have attended our right of way seminars with questions about how to handle various trespass issues. Sometimes they are talking about facilities placed within the last few years including Sectionalizers, large overhead transformers, Telco cross connect boxes, remote terminals, etc.

Let’s talk about verbal right of way first. Under the law of this country “any interest in real property can only be granted or transferred in writing.” That is called the statute of frauds and has its origin in England in 1677. Why does this apply in this country? Because our laws are based on British common law, unless, you are in Louisiana. In Louisiana, Napoleonic law prevails.

So what does it mean when you get a verbal right of way? It means that you have a license. A license is revocable! A good example of a license is a ticket to a movie theater or a sporting event. You are given permission to occupy a certain seat for a specific time and date. If you do not comport yourself in accordance with the rules, i.e.: loud and obnoxious behavior! The management has the right to revoke your “license” and remove you from the premises. If your “license” is revoked by a property owner, that means that your organization is faced with removing its facilities at its expense.

How much of your outside plant budget is spent on relocation due to right of way issues? We did an informal survey of about two dozen companies a couple of years ago to find out what that percentage was. We spoke with engineering/construction managers/directors. The percentage of their budgets ranged from a low of twenty-two percent to a high of thirty-eight percent! We tried keeping the figures to private property issues and not public right of way relocations. If you do some quick math and arbitrarily use thirty percent as the average, what was your total outside plant construction budget last year? The result is usually very surprising.

We taught our one-week basic right of way course to a medium size company in the eastern U.S. last year. This was a company that only used engineers to obtain easements. During the week I asked to see one of their easement documents. After reading it I determined that it was a “blanket” easement. A blanket easement allows the easement holder to place their plant or facilities anywhere on the property they desire! Why do companies write blanket easements? Because almost anyone, even with no expertise can do it! There are two large problems with this kind of easement:

1.     It is a terrible disservice to the landowner because the location of the easement holder’s location is not defined. This can create difficulty for subsequent owners of the property in getting title insurance!

2.     The courts have taken a very dim view of this “unreasonable burden” on the land. Picture yourself on the witness stand during an action against your organization. The property owner’s   attorney might ask you: “You work for a multi million/billion organization. Don’t they provide you with proper training before you go out and encumber someone’s land?” How would you respond?

Back to my story. After determining that the only document this company had was this blanket document, I asked the group “How do you get landowners to sign this?” They slapped their knees and in unison responded, “We don’t!” so I asked them this: “You have paid the land owner ten-thousand dollars to place a large ground mounted facility and then taken a “verbal” right of way. What happens to that facility when the next owner of the property moves in and tells your organization to move it at its expense because you have no recorded easement? The engineers’ response? “We’ll be gone by then and it won’t be our problem!”

One thing in favor of the company in this case is that the facility would probably be visible. This constitutes “Actual Notice” to the new owner. This means that the facility may stay at its present location but no change in size nor location are permitted. The company is only entitled to maintain its plant at its current location. Maybe. It depends on the courts if it goes that far.

The stories go on and on about right of way issues and how much it costs companies across the country. It is not limited to power companies and telcos. Gas, water and others have similar problems with their distribution network.

I mentioned a recorded easement two paragraphs back. Let’s discuss that. You can obtain a written easement and it is valid as long as the grantor of the easement owns the property. So that is what we’ll do for this example. We get a properly written easement document and instead of recording it, that is, recorded in the office of the County Recorder/Registrar of Deeds/Courthouse, etc. making it a matter of public record, we put it in a file in our office. Let’s say that we are placing a conduit run that transits through the property. To keep it interesting we will not be placing any manholes on the property. This way there will be nothing visible on the property. Now, a new person buys the land, and gets title insurance. Title insurance covers only encumbrances that are of record. This new owner has no “notice” that your organization has any facilities on their land. Depending on your local court, you might be forced to relocate even with a written easement!

By now you may be confused. Don’t feel alone. Right of way is an extremely complex field. If you would like to e-mail me any questions, I will be happy to help. My e-mail address is nmi1@prodigy.net. I may be reached by telephone at 510-530-9342. Our web site is www.nmitraining.com.

Next month I will address some of the ways to handle trespass issues and some potential problems using public utility easements.

Jerry Moran is Vice President of NMI Management & Training Services in Oakland, California, which specializes in right of way training. Jerry spent twenty-five years with Pacific Bell in various management & craft positions. He co-founded NMI in 1991.

Jerry’s professional background is:

• Five years in the U.S. Air Force as a telecommunications specialist
• Twenty-five years with Pacific Bell specializing primarily in Right of Way             Acquisition
• Taught the Bell System/Bellcore Right of Way schools
• Certified instructor for the International Right of Way Association
• Past president of Chapter Two (1998) International Right of Way Association
• Chapter Two’s “Professional of the Year” 1998
• Author of several magazine articles that appeared in technical magazines
• Author of numerous specialized training courses in right of way

Subordinations

Let’s say that we are acquiring a 50-foot by 50-foot easement on a five-acre parcel with only a single-family residence (SFR) on it. The local water agency is going to put a 10-foot by 20 foot building on the easement with room for parking.

The subject property is situated about one mile from the edge of a rapidly growing town.

The property owners are Dan and Marilyn Smith. The Smiths have owned the land for sixteen months.

The fair market value of the property is $700,000.00 and the balance of the mortgage is $561,000.00. Taxes are current.

The offer to the Smiths is $7500. They accept the offer and sign the easement. The document is recorded immediately.

Let’s say that for some reason we don’t take a subordination from the lender.

Fast-forward a year: The Smiths find themselves out of work and default on the mortgage. The lender visits the property and decides that an SFR on five acres is underutilizing the potential of the parcel and sells the land to a developer. The developer demands that you remove your facility from the property at your expense.

Can your facility be required to move at your expense? Most probably.

The chain of title on the subject property reads:
1. The Smiths
2. The lenders mortgage
3. Your organization’s easement
4. The developer
Notice where your easement is in the chain. The lender has a superior interest in the property. When a default on the mortgage occurs the lender(s) are first in line and if you didn’t get them to subordinate their interest to your easement you do not have an enforceable right!

All hope is not lost. Since the Smiths signed your easement, you are not in trespass. That means that condemnation is a possibility. You of course would have to weigh the economics.

So, back to the question: when do you consider taking a subordination?
When the subject property is likely to change its use (farmland for example)
When the current owners of the subject property have a high mortgage to FMV ratio
When your facility has a high dollar value and you don’t want to be required to move it

How do you get a subordination agreement? You contact the lender and ask for one. Beware if they ask you what you are paying for the easement. Sometimes they demand that the money be given to the lender and they apply the amount to the borrowers account.

Following is an example of a subordination agreement that you are welcome to use. Caution: make sure that your legal counsel approves its use for your organization.

The following format may be used for a subordination agreement

The undersigned Trustor/Mortgagor, Trustee/Mortgagee, and Beneficiary(ies), in that certain deed of trust/mortgage recorded on the ____ day of ________, 20____ at Book____, Page____, (or File Number________) in the office of the county recorder of ________________, State of _____________. Said deed of trust/mortgage, being on the same property described in favor of (your company/agency) dated the ____day of __________, 20___, concurrently herewith, do hereby consent to the execution of said grant of easement and to all the terms and conditions thereof; the undersigned further agree that the lien or charge of said deed of trust/mortgage will be and it is hereby subordinated to said grant of easement.
Executed this______day of _______, 20___.

(Borrower)
Trustor/Mortgagor