Utilities easements: it’s not just the cables that can give you a shock
6 June 2017
You may be approached by a developer perhaps in connection with a renewable energy project or a commercial or residential development. The developer or a Distribution Network Operator (DNO), such as UK Power Networks (UKPN) may wish to lay pipes or cables (conduits) over or under your land. It is important to seek advice before going any further.
Your land agent will be able to advise you on the value of the easement and your solicitor should review the terms of the easement or wayleave agreement. The key is to be clear and avoid granting excessive rights, which could mean not recovering the full value. Your costs in seeking advice will usually be paid by the developer or DNO, so there is often no cost to you.
When should you seek advice?
We recommend you seek advice as soon possible when you are approached and certainly before you sign any documents or any work is undertaken to install the conduits. Once the conduits have been laid there is less incentive on the developer or DNO to negotiate over the documents and the price they will pay.
The developer or DNO may initially seek to use a basic wayleave agreement, in advance of a more formal easement. A wayleave is a licence that gives the DNO the right to install conduits on your land. These are often simple documents that may not limit or define the conduits that can be laid. They may include the right to lay further conduits in the future, with the obligation often only to pay for any disturbance caused rather than the commercial value of the rights to install the further conduits. Depending on the nature of the development, the value could be significant. This could harm your future bargaining position for the more formal easement and slow the process down, because the DNO may already have gained many or all of the rights it needs, albeit that they usually prefer an easement.
How long does the process take and what are the common problems?
It will often depend on how urgently the new conduit is needed as to how quickly matters progress, but the standard documents are normally heavily biased in favour of the DNO (who will normally enter into any documentation rather than the developer). It is therefore important to consider whether you should agree with a developer to enter into an easement with the DNO on standard terms.
On their standard terms the DNO will usually seek rights to lay conduits:
- at any depth or height
- whenever it wishes in the future
- without any limit on the number or type that can be laid (although usually limited to a set utility such as electricity or gas).
DNOs usually also require access over any part of the owner’s land which could be a large area far beyond what they actually need rights over and unnecessarily burdens areas of your land for the future.
You will also potentially be agreeing not to do certain things on the land, such as not to carry out any excavations deeper than 35 cm, which could cause issues with ploughing, cultivating, drainage and other agricultural operations.
There are other potential issues in the initial drafts, which could create risks for the future. Whilst there are normally regulatory requirements that currently govern the laying of conduits, such as in relation to the minimum depth or height, these may not be sufficient for agricultural practices or machinery and are subject to being changed in the future.
The DNO is usually resistant to changing their standard terms and this can cause some delays. Nevertheless it is well worth seeking to do this to improve your position. It is important that you are aware of both the full extent of the rights you are giving and any associated risks.
Why would I want to enter into these documents?
With the right advice, and in a number of situations, there are opportunities to receive significant payments in relation to agreeing to have conduits on your land. They might also of course be necessary for developments that you are involved in but in either case it is very important to be clear about what rights are being granted.
We have also been contacted recently in matters where UKPN has been seeking to upgrade its wayleaves into easements and has been willing to make payments to the landowner for doing so. It may, therefore, be possible to obtain a payment without any new conduits being laid, and at the same time clarify the DNO’s rights which would appear to be a ‘win win’ situation.
The content of this article is for general information only. For further information on the consideration around utilities easements, please contact Ed Bellamy. Law covered as at June 2017.
The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at June 2017.