Investor · Pacific Northwest · Member since 2018 · 71 posts · 19 votes
Dear all,
A neighboring mixed-use development is requesting to modify an existing easement we have with the electric supplier in our area. The aim is to enable the electric supplier to make modifications to the electrical circuit that runs underground through our property. The neighboring project would be connected to that circuit.
I have no experience in this matter and ask for help to be not taken advantage off.
Is this a normal everyday business requests? Is it the industry standard to usually grant those requests for free? Or do they usually come with a financial compensation for the burden involved?
Than you for helping me understand this request. The property is located in Oregon.
Real Estate Agent · Houston, TX · Member since 2021 · 1k+ posts · 715 votes
2y
Neighbor requests to modify existing easements are not uncommon, especially in mixed-use developments. In this case, the request is to modify the easement for underground electrical circuit modifications. Deciding whether to grant it depends on factors like the nature and impact of the modifications, your relationship with the neighbor, and potential benefits or drawbacks. Consult a real estate attorney for legal guidance. Compensation depends on various factors, such as how the modifications affect your property. Remember, you can refuse, negotiate terms, and ensure all agreements are in writing. When in doubt, seek legal advice.
Real Estate Agent · Houston, TX · Member since 2021 · 1k+ posts · 715 votes
2y
Neighbor requests to modify existing easements are not uncommon, especially in mixed-use developments. In this case, the request is to modify the easement for underground electrical circuit modifications. Deciding whether to grant it depends on factors like the nature and impact of the modifications, your relationship with the neighbor, and potential benefits or drawbacks. Consult a real estate attorney for legal guidance. Compensation depends on various factors, such as how the modifications affect your property. Remember, you can refuse, negotiate terms, and ensure all agreements are in writing. When in doubt, seek legal advice.
Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
2y
A friend of mine owned some property , a builder bought the land next to him 6 lots platted in the 1940s . The builder found out that the road easement was "over and above " My friend owned the road . Water and sewer was 30 feet from the builders property . The builder wanted an easement for underground so he could connect to water and sewer , and offered $5000 . My friend told the builder $20K per lot . Builder said no .
Lots are still empty , and for sale . Without the easement they are worthless .
( when the lots were platted the whole area was rural and well and septic , water and sewer were not even a thought )
Investor · Pacific Northwest · Member since 2018 · 71 posts · 19 votes
2y
Gentlemen,
thank you very much for your replies. It helps me to understand the situation better - I don't want to take advantage of my neighbor but also make sure he doesn't take advantage of me. Great advice here - as always.
Investor · Clairemont, CA · Member since 2011 · 3k+ posts · 2k+ votes
2y
I've been able to see these conversations as a Civil for the developer working with the dry utility consultant regularly. It's common when both parties are sophisticated to request and obtain 1) an appraisal for the value of the easement 2) a comparison of costs with and without the change (typically the existing option is significantly more expensive) 3) an appraisal for the value provided to the 'other' party (meaning if we underground does that make my parcel more valuable or developable?).
Then the consideration becomes using those three numbers where do we negotiate compensation? If the easement is worth $5K, the savings is $100K and the value to my property is $20K then maybe $30K is a reasonable number. The developer saves $70K total and I receive $50K in cash and 'value' equivalent. He realizes more savings than my value because he's also got the risk of actually constructing the facility. Without those three pieces of info though the conversation has no foundation to discuss from and usually falls apart due to perceptions of value vs reality.
Who would I contact to get those three points done - is that what a dry utility consultant is for? In your experience, how open is the other side to engage in those three points?
Or can I just request them to provide those three points as a basis for compensation?
Investor · Clairemont, CA · Member since 2011 · 3k+ posts · 2k+ votes
2y
As with just about everything 'it depends'...
Who completes this? There are appraisal outfits that have experience in more nuanced appraisals like public condemnation, ROW acquisition, future value attributable to highest and best use etc. So that is the kind of appraiser you would look for. The dry utility consultant may also provide some info on the cost of the improvements in option 1 or option 2...as well as maybe how much of a future savings (or it could be a future cost for you) from the work the developer does today.
Who provides this? Whoever wants it, and is willing to engage the necessary consultants. If you have the other party complete it then you end up trusting who they hire and what information they provide to you. If you hire them then it costs you money to do that...and maybe you include that as part of your compensation discussion...
It also depends on how 'much' of a change we're talking. A four foot wide 10' long easement on a corner of your property that is already a setback? Or a 10' wide 200' long easement across the middle of the site? One may easily be identified as little to no impact and you just say 'give me $5K and we're good. The other has significant implications to your future ability to redevelop the lot...so maybe its worth evaluating all the nuances before agreeing...
A neighboring mixed-use development is requesting to modify an existing easement we have with the electric supplier in our area. The aim is to enable the electric supplier to make modifications to the electrical circuit that runs underground through our property. The neighboring project would be connected to that circuit.
I have no experience in this matter and ask for help to be not taken advantage off.
Is this a normal everyday business requests? Is it the industry standard to usually grant those requests for free? Or do they usually come with a financial compensation for the burden involved?
Than you for helping me understand this request. The property is located in Oregon.
Hey Nikolas - my company does dry utility work and this is something we deal with every day. Why don't we setup a quick call to discuss the project/ask so you can negotiate a deal that works for you and you get something in return for granting them the easement.
Most likely the power company built out the infrastructure back in the day and failed to obtain an easement for their primary/main line. That means today that in order for them to modify / add new connections they must obtain an easement from the current property owner. They don't need an easement just to maintain their line BUT if they are adding a tap/upgrading/making money on that line that WASN'T a pre-existing condition then an easement must be granted.
Then you have to think about being a neighbor for the next XX years. You have every right to make a reasonable ask but you could also kill their project or make it so they find another POC further away and just connect to that if your ask ($$) is too high.
Just shoot me a DM if you want to have a quick chat.