Market Rent For Underground Easements

[sebridges]

Does it make a difference when the easement is for a private entity versus a utility or government where eminent domain can apply? It seems like in that case you have a the buyer (person who wants the easement) who is pretty much at the seller's mercy. If they don't want their land used for an easement they can just tell the other person to pound sand until they make it worth their while. For instance, oil companies commonly pay a lot more than the underlying fee simple value of land for easements - though in their case a lot of that may represent damages to the whole of the remaining tract by having a road with traffic on it to go maintain a wellhead for instance.

I would think in such a case as described by the OP, it would be rare for a judge to not grant a prescriptive easement. It's just a matter of weighing the cost and time of going through the courts versus coming to terms directly with the owner.

 

[Howard Klahr]

Does it make a difference when the easement is for a private entity versus a utility or government where eminent domain can apply?

Yes, there are different definitions of value

 

[Mark K]

Does the fiber optic utility have the right of eminent domain? In this area all water/sewer/electric/gas utilities have that right although they will go to great lengths to avoid court action due to the cost. I'm often involved in condemnation cases and most utilities will pay far above fee value for an easement to avoid court. I've never been involved with a fiber or phone case so I'm unaware of the laws for them.

If the fiber optic company does not have the right to condemn then its going to be a negotiated value to acquire an easement; the value of the underlying land means little or nothing.

If this is a lease for the easement I've seen the annual lease value based on the linear foot/year; say $1 - $2 per foot per year, or $1,500 - $3,000 per year for the 1,500 lin ft. in your case.

 

[Michael S]

Does the fiber optic utility have the right of eminent domain? In this area all water/sewer/electric/gas utilities have that right although they will go to great lengths to avoid court action due to the cost. I'm often involved in condemnation cases and most utilities will pay far above fee value for an easement to avoid court. I've never been involved with a fiber or phone case so I'm unaware of the laws for them.

If the fiber optic company does not have the right to condemn then its going to be a negotiated value to acquire an easement; the value of the underlying land means little or nothing.

If this is a lease for the easement I've seen the annual lease value based on the linear foot/year; say $1 - $2 per foot per year, or $1,500 - $3,000 per year for the 1,500 lin ft. in your case.

They do not have the power of eminent domain in this case.

That's helpful information. I think that's a reasonable starting place for negotiations ($1-2/per lineal foot per year). The fiber optic provider is charging the customer for installing the line (estimated at $200,000) and amortizing it over three years. Then I'm sure they're charging hundreds or thousands of dollars a month for the service. If so, an extra $1,500-$3,000 per year is a reasonable amount for them to build into that cost.

 

[sebridges]

The

They do not have the power of eminent domain in this case.

That's helpful information. I think that's a reasonable starting place for negotiations ($1-2/per lineal foot per year). The fiber optic provider is charging the customer for installing the line (estimated at $200,000) and amortizing it over three years. Then I'm sure they're charging hundreds or thousands of dollars a month for the service. If so, an extra $1,500-$3,000 per year is a reasonable amount for them to build into that cost.

The fiber optic company may not have the power of eminent domain, but the company that owns the land that is seeking the fiber optic would more likely than not be able to secure a prescriptive easement from the courts.

IMO......If the company is willing to spend that much annually for a lease, I would think the better option would be to capitalize the $3k/year and blow the owner away with a $25-$30k offer for the easement. For the appraiser, the value is the same, but that would avoid the cost of administering a payment every year and avoid complications in the future.

 

[Howard Klahr]

the company that owns the land that is seeking the fiber optic would more likely than not be able to secure a prescriptive easement from the courts.

I guess that would be in the world where there is no fifth amendment, a requirement for due process and the concept of private property rights.

 

[sebridges]

I guess that would be in the world where there is no fifth amendment, a requirement for due process and the concept of private property rights.

Do you think land locked property owners have a right to physical access to their property and utilities?

Would it make a difference if the property owner trying to get decent internet was named Peggy Sue, and she was working two jobs while raising four kids on her own because her husband passed two years earlier due to a drunken driver and she needs decent internet so her kids can do their homework?

 

[Howard Klahr]

Would it make a difference if the property owner trying to get decent internet was named Peggy Sue, and she was working two jobs while raising four kids on her own because her husband passed two years earlier due to a drunken driver and she needs decent internet so her kids can do their homework?

Wow ... What a red herring. Maybe you should try that argument in court and see where it gets you

 

[sebridges]

Wow ... What a red herring. Maybe you should try that argument in court and see where it gets you

What do you mean? The law/courts will/should treat both in the same manner. We are talking about a handful of utility poles strung across scrub land valued at $1500/ac on its best day. Whatever happened to having good neighbors? Heck, the company locating to the land adjoining his probably makes his land worth $1800/ac.

 

[Howard Klahr]

What do you mean?

I was quite explanatory in my comments. Clearly you do not seem to be familiar with the applicable laws governing property rights in this country. Consequently, I would suggest that you discuss this with your supervisor to gain further insight