Chapter 6: Land Agreements
Land Agents or other company representatives may approach you to purchase your lands or obtain rights to them through a land acquisition agreement that allows the company to locate its pipeline or workspace on your lands. This chapter discusses land agreements. For information on compensation please see Chapter 7.
- What is a right-of-way?
- What is a land acquisition agreement?
- Can the company and I agree on a land acquisition agreement before a project is approved?
- What is an option agreement?
- What is an easement agreement?
- How long will the agreement last?
- Who controls the content of land acquisition agreements?
- What does section 86 of the NEB Act say?
- What must the company do before starting to negotiate for land rights?
- Can the company buy the land outright from me instead of seeking an easement?
- What if I want a lawyer to review the agreement?
- I don't have a copy of my land agreement. Where can I get one?
- What if I don't sign a land agreement with the company?
A pipeline right-of-way (ROW) is the strip of land in which the pipeline will be located. The width of the right-of-way may vary depending on factors such as pipeline diameter and the slope of the land, but it will typically range from 12-30 metres (approximately 40-100 feet) for the entire length of the pipeline.
A land acquisition agreement gives a pipeline company the right to use the land to construct, operate, and maintain the pipeline.
Yes, these agreements may be negotiated with landowners before a project has received NEB approval.
Because the company plans the general route before it files its application with the NEB, the company may begin to negotiate with a landowner at any time even though the landowner may not be affected when the final route is determined. This is called an option agreement. This agreement gives the company the assurance that it can obtain the land rights it needs if the project goes ahead. When you sign an option agreement, you are promising the company that you will sign a land agreement within a specified period of time.
If the specified period of time passes without the company exercising the option, the option agreement will no longer be valid. However, if the option is exercised within the time specified, the terms of the option agreement will come into effect. This means that the company is granted a right-of-way agreement automatically, according to the terms you and the company agreed to in the option agreement.
The option agreement is a legal contract. It contains certain required sections or clauses that cover various rights, but you can also negotiate other terms to meet your particular needs. Before you sign this agreement, it is important to read and understand all of the terms and conditions carefully, or have a lawyer review it for you.
An easement agreement is a written agreement between the pipeline company and the landowner. Usually an easement agreement allows the company to construct and operate the pipeline while the landowner still owns the lands. An easement agreement sets out the rights and obligations of both the company and the landowner in regard to the use of the lands for the location of the pipeline and will specify restrictions on the use of the land. The landowner usually grants the easement to the pipeline company for a negotiated amount of money. This money could be paid, at the option of the landowner, in a lump sum or in periodic or annual payments.
While the company may present a standard easement agreement, the final form and its contents may be amended by negotiation. The company has the right to use the lands to build, operate, and maintain the pipeline once an easement agreement is in effect. The company will then register the agreement with the local land titles or registry office.
An easement agreement may be known by other names such as a Statutory Right-of-Way Agreement, Pipeline Right-of-Way Agreement, or Utility Right-of-Way Agreement.
An easement agreement will usually contain a clause about how long it lasts. The pipeline company usually keeps its right to the right-of-way indefinitely unless it abandons the pipeline and releases (ends) its easement rights. Until the company removes the easement from the land title or deed, or it is removed by an order of the court, the land remains subject to the easement agreement. The pipeline company, the landowner that signed the easement agreement, and all future owners of that property (whether they buy the property or inherit it) must abide by the terms of the easement agreement.
Land acquisition agreements must comply with section 86 of the NEB Act. However, the parties signing the agreement control the final contents of individually negotiated agreements which may include additional content . The NEB does not regulate any part of the easement agreement content. Land acquisition agreements can be enforced by the provincial court in the province where the lands are located.
- compensation for all damages suffered as a result of the operations of the company;
- review of compensation every five years for annual or periodic payments;
- protection from all liabilities, claims or suits caused by the company’s operations, but not from liabilities, damages, claims or suits filed as a result of the gross negligence or willful misconduct of the landowner; and
- restriction of land use by the company to the line of pipe for which the land is specifically required, unless the landowner agrees to further use.
Before the company signs an option or easement agreement with you, it must first deliver a section 87 notice to you that must describe:
- what land is needed for the part of the pipeline that will cross your property;
- how the company plans to compensate you for the land it needs;
- a statement of the value of the required land;
- the NEB’s process for consideration of the detailed route of the pipeline; and
- a description of the options of negotiation or arbitration that are available if you and the company
cannot agree on compensation.
Yes, some companies will do this and it may form part of the negotiations. It is more common to see a company seek an easement agreement for a pipeline right-of-way than to purchase the land. However, it is common to see a company seek to purchase the lands outright if it is proposing to install a compressor station or a pump station.
It is your choice if you wish to have a lawyer or anyone else review your documents. You may negotiate with the company to receive reasonable costs for having the agreement reviewed by your lawyer. However, there is no legal right under the NEB Act that entitles you to have these costs covered.
If you do not have a copy of the land agreement, you may ask the company for a copy or you may request a copy for a fee through your provincial government office which handles land and property records.
It is a personal choice to sign a land agreement. Negotiating about the contents of the agreement may help to address your concerns. Negotiations should always be done respectfully and in good faith to ensure fairness. The Board generally encourages you to consider accessing its ADR services to help you reach a mutually acceptable outcome. Ultimately, you may choose not to sign an agreement. If you choose not to sign an agreement because you cannot agree on mutually acceptable terms, the company may apply to the NEB for a right of entry order as described in Chapter 8.
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