Considerations Before Accepting a Utility Easement Offer: How to Protect Your Land

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Land improvement easements can be a profitable income stream for farmers and ranchers. Across the U.S. we’re seeing an increase in opportunities for both surface and subsurface infrastructure and with additional tax credits and funding for energy efficient improvements from the Inflation Reduction Act, we will only see more of them.

However, you want the right easement terms for your land, your future plans and even your neighbor’s so the agreement is to your long-term benefit and not just your short-term gain.

“There is a way to diversify your land value while protecting your property and ag operations for years and generations to come,” encourages Quint Shambaugh, Pinion land advisory lead.

If you do receive an easement opportunity, here are three critical steps Shambaugh recommends you take to cover your bases:

1. Consider every acre your farm touches or crosses.

Farms are not islands with isolated impact. Acres around you also impact your farm and your farm impacts the land around you. Neighbors share water and water infrastructure, both surface and subsurface. Understanding and embracing that allows you to plan for a proper drainage system that coincides with a utility project, while being a good neighbor.

    • Action: Connect with your neighboring property owners to learn about their infrastructure and communicate your plans. It may be mutually beneficial to engage in cost share opportunities. You also want to ensure your access to a proper outlet.

2. Ensure QA/QC is in place.

If any utility is going to cross your property, you need to have the proper steps in place for quality assurance and quality control for anything they may disrupt. It’s best to err on the side of caution.

    • Action: Take elevation shots, establish an engineered plan and ensure you have a written plan of remediation for anything that is broken or disturbed during installation. But don’t leave it there – during installation, have someone conduct a quality assurance assessment to make sure that plan is followed correctly, and any repairs are made timely, affectively and to specifications.

3. Work with a trusted advisor.

Bringing in a consultant to help work with the utility company will help cover your bases and safeguard the project.

    • Action: Make sure to work with someone who knows the process. They’ll know when it’s time to discuss certain aspects of the project and when you need to ask for certain things. They’ll raise questions or concerns that may not be on your radar. They’ll help walk you through the process, cross the t’s and dot the i’s, making sure nothing is left on the table and that you plan for everything you should be considering.

“Working with a trusted advisor will not only identify a credible opportunity, but it can also help evaluate a financial strategy, negotiate lease terms and profitability, as well as protect land values,” says Shambaugh.

For additional steps read, “Steps Every Landowner Should Take if Offered a Utility Easement” or reach out to Pinion’s land advisory team with questions or to request a consultation.

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