What is a Utility Easement?
A utility easement is a right-of-way granted to public utility companies allowing it to enter land owned by a private individual or business to install, maintain and repair underground pipes or utility lines. Such pipes and lines include natural gas, sewerage and water. In some cases, the easement will grant the utility company the right to install aboveground equipment, such as a cell tower.
A utility easement typically defines the rights of the private landowner and public utility company . A utility easement also defines the types of structures that can be placed on the easement, the location and the maintenance obligations of both the landowner and the utility company.
Although the utility company entering a landowner’s property may have a statutory right to do so, failure to obtain a utility easement would result in the utility company being liable to the landowner for trespass damages.
At Huntsman & Associates, PLLC, we have represented both landowners and utility companies in easement disputes and litigations. We understand easements and the importance of both the landowners’ rights and the utility companies’ rights.
Key Legislation in Arkansas
The foundation for Arkansas Utility Easement Law is primarily contained within Arkansas Statutes, with specific attention to Title 18, Chapter 15, which governs easements in general. A utility easement, as an interest in real property, encompasses the right of one party to utilize an area owned by another party for the purpose of providing services to the public. In Arkansas, utility companies may seek the right to use a landowner’s property through a right of entry agreement, as prescribed under Ark. Code Ann. § 18-15-213, without transferring any interest into their estate. If such an entry agreement is not reached, the easement may still be acquired, but only by condemnation proceedings, as explained in Ark. Code Ann. § 18-15-212. Title 18 does not expressly grant powers of eminent domain to utility companies; however, it does permit a utility company to seek this power by demonstrating that a "municipality would have such authority under Ark. Code Ann. § 18-15-201" and that "the utility easement is for public utility lines." Ark. Code Ann. § 18-15-212. In contrast to private easements, public utility easements are subject to a more exacting scrutiny. Specifically, a municipal corporation seeking to take land "for a public utility or public service purpose may exercise the power of eminent domain on behalf of a utility company." Ark. Code Ann. § 18-15-201. "[E]minent domain cannot be granted to a private utility unless it has been delegated expressly by the General Assembly." Central Arkansas Water & Sewer Authority v. Harris, 82 Ark. 385, 386, 101 S.W. 736, 737 (1907). All rights in an acquired easement are subject to certain nonexclusive guidelines, including § 18-15-215. This section enumerates the rights of both the utility company and the owner of the property with respect to laying the easement. The owner may designate "two (2) public places or roads" for the placing of an easement. The section further provides that, if more than one utility company seeks an easement on the same property, placement within reasonable bounds of the prior entity is mandatory. However, when dealing with an extension or alteration of a utility easement, the company may have the same options as the initial company that obtained the easement. Ark. Code Ann. § 18-15-218.
Landowner’s Rights and Obligations
In addition to the rights and obligations associated with the servient estate discussed above, under Arkansas law, a landowner also has the right to expect an unobstructed access to and usage of any public utility easement, whether by others or by the landowner itself.
For example, if a public utility company has an easement across landowner’s property for an electric power line, not only does a public utility company have the right to access the easement for maintenance of the line, but the landowner also has the right to access the easement for use of it. For instance, the landowner may plant a garden in the easement or build a fence across it, provided the landowner exercises its use in a way that does not interfere with the public utility’s use of the easement. However, any activities that would change the nature of the easement from one of access and usage to one that would limit a public utility’s ability to readily accomplish routine, ordinary maintenance operations ("substantially interfere with the maintenance of the public utility facilities"), or that is likely to interfere with or endanger a public utility facility, are prohibited.
Moreover, the much more substantive issue and limitation on the landowner’s use of a public utility easement is found in the Arkansas Case Law ("The general rule is that when land is conveyed subject to an easement, with or without consideration, the owner of the land cannot do anything to substantially interfere with the easement or the use thereof for the purposes contemplated when it was created." Hummel v. Virgin Valley Water Dist., 5 P.3d 1068, 1070 (Nev. 2000)(emphasis added)). Because property subject to an easement is encumbered (both legally and physically), the owner of the property cannot do anything to the property, concrete or otherwise, that would materially affect the use of the easement ("substantial impairment").
Utility Easement Establishment Process
The process of establishing a utility easement in Arkansas typically involves several steps, commencing with negotiations between the utility provider and the property owner. During the negotiation phase, the parties discuss the extent of the easement, compensation for the landowner, and any other terms or conditions they may wish to include in the easement agreement. Once the parties have reached an agreement, the utility provider will usually prepare a written easement deed that specifically outlines the parameters of the easement, including its purpose, dimensions, and any limitations on the easement holder’s use of the property. This deed must be signed by both parties and then recorded in the appropriate county recorder’s office where the property is located. Recording is crucial because it puts the public on notice of the easement, thus protecting the utility provider’s right to the easement over time. In some instances, Arkansas law provides for the use of condemnation procedures (also known as eminent domain proceedings) that allow a utility provider to obtain an easement over a property without the need for negotiation of a voluntary easement. The condemnation process generally requires the utility provider to file a petition with the appropriate court, stating its purpose for seeking the easement and requesting a determination of the fair market value of the easement. Once the court has heard the case and made a determination, the utility provider should be able to obtain the easement, even if the landowner objects. It is important to understand that, regardless of the means used to establish the easement, the utility provider is generally bound by the terms of the easement agreement or by the provisions of the condemnation order. Any deviation by the utility provider could be subject to legal action.
Resolving Disputes
Disputes arise between easement owners and utility companies because the rights afforded by easements are not always clearly defined. Disagreements can arise about how much land the utility company is allowed to use, what kind of work is "necessary," or the depth and width of the area that may be used to conduct work. Property owners often don’t know with certainty whether their property will be damaged, and an expert can be necessary to fix those damages or the need for future repairs.
Property owners have a number of legal remedies to resolve easement disputes: injunctive relief, nuisance, constructive eviction, conversion, trespass, and negligence, to name a few . Property owners can also reach out to the Arkansas Public Service Commission in some cases to obtain relief. Utility companies may have responsibilities under statutes or regulations to complete repair work and mitigate damage to the property. Arkansas courts have held that utility companies may also go on the land if needed to perform repair work, but other courts in other states have reached the opposite conclusion. Because the utility easement itself does not define the scope of the utility company’s rights in all circumstances, public policy and contract-governed nature of easements are two primary venues for dispute resolution.
Revocation or Amendment of Easements
In general, a utility easement may be modified or terminated in two ways: by written agreement between the easement holder and the servient landowner, or by court action under certain circumstances.
If the easement holder and the servient landowner are both abutting property owners (i.e., one owns the servient estate, the other owns the dominant estate), they are free to modify the terms of the easement by written agreement. The court will enforce their agreement if it shows that the real property it applies to was subject to the easement, and the modification in question conforms to the terms of the easement document, even if it involves modifying or eliminating the provisions requiring consent of the utility.
If the parties do not agree to modify the easement or if the servient landowner seeks to have the easement terminated, the servient landowner must first bring an action in circuit court to seek to have the court terminate the easement, usually because the servient landowner no longer has any need for it or the purposes for which the easement has been granted are no longer practicable.
The utility will be notified of this action and have an opportunity to present its case to the court. A termination of the easement will not be permitted where the utility can show that it still needs the easement in order to operate and maintain its facilities. The court also will consider whether the utility has failed to use the easement over the past five (5) years, but if there has been any use of the easement within the prior five (5) years, that is often sufficient to defeat the request to terminate the easement.
Recent Case Studies and Illustrations
As with any area of the law, providing illustrative examples of previous court decisions can provide valuable insight into how Arkansas utility easement law is applied in practice. In Graves v. Arkansas Valley Electric Cooperative Corporation, No. 09-1051, 2010 WL 5128873 (Ark.App. 2010), an Arkansas appellate court upheld a jury award for damages to a landowner who had claimed that an electric company had unlawfully placed utility poles along a right of way for which it had only acquired a gravel road easement. The jury had held that this construction interfered with the landowners’ agricultural production. The appellate court also upheld the award of attorney’s fees pursuant to statutory provisions for claims arising out of condemnations. Another Arkansas decision, Harris v. North Arkansas Telephone Company, 48 Ark.App. 49, 890 S.W.2d 274 (1995), similarly involved a dispute over whether a utility held an easement for underground cable and facilities in the center of a right of way over private land. Under the circumstances, the Arkansas appellate court held that the landowner had not given express consent for such an expansion of the utility, and further held that as the landowner had not given consent for such expansion of the easement, the telephone company had been required to obtain a condemnation of the additional property rights and an award of damages.
In Daniel v. Entergy Arkansas, Inc., 86 Ark.App. 414, 186 S.W.3d 290 (2004), the Arkansas appellate court rejected an argument that an easement to maintain overhead power lines and access to property terminated automatically when the surrounding wooded area was cleared to create a subdivision. In Williams v. Oklahoma Natural Gas Co., No. CIV-13-144 M/J, 2013 WL 5646489 (E.D. Okla., Oct. 16, 2013), the following year, the Oklahoma federal district court similarly rejected an argument that an easement previously granted for the purpose of constructing, installing, maintaining and operating pipeline gas service facilities had terminated automatically by virtue of the utility company’s failure to install its service lines or facilities within a 12-month period adequate to serve the property. Looking at two cases, Bardwell v. Southwest Arkansas Elec. Coop., 95 Ark. App. 17, 234 S.W.3d 323 (2006) and Van Wey v. City Utilities of Fort Smith Mun., 90 Ark.App 250, 205 S.W.3d 178 (2004), the Arkansas appellate court has further held that where electric utilities began but negligently failed to complete the relocation of utility poles in a timely period, the utilities could be held liable for any resulting property damage. Most recently, in City of Little Rock v. Hatcher, 457 Ark. 444, 355 S.W.3d 622 (2012), the Arkansas Supreme Court held that an easement provision for discovering and repairing leaks in a water line "in and under the real estate" included both visible and non-visible leaks that affected the immediately surrounding area, thereby giving the city explicit insurance that the water line would not be damaged as a consequence of non-repair.
Utility Easements Advantages and Disadvantages
Easements create certain rights for utility companies. They also impose a number of obligations on utility companies (including against utility companies in Arkansas). Likewise, easements – or the benefit of them – create certain advantages and disadvantages for landowners (including landowners in Arkansas). This section of the guide will look at some obvious and less obvious advantages of utility easements for utility companies as well as advantages for landowners. This section then will look at possible disadvantages or concerns of utility easements for utility companies and also for landowners.
Advantages of Utility Easements for Utility Companies
Of course, utility companies benefit from easements because they generally gain access to the landowner’s property that is needed for utility lines or other utilities activities. Likewise, utility companies are not required to pay the same amount in damages as they might have been without an easement.
Advantages of Utility Easements for Landowners
In determining the location and size of a utility easement, landowners may be able to select more favorable terms. The more favorable terms may be considered beneficial to the landowner over the utiltiy easement where in its absence the utility company would have selected a different (presumably less favorable) location or area for its utilities and other equipment. In other words, without an easement the utility company may have selected a different (and possibly more intrusive) area on the landowner’s property for its utilities or other equipment. Likewise , utility companies would likely pay the landowner more for an easement than it would without one.
Disadvantages or Concerns of Utility Easements for Utility Companies
A typical concern for utilities with easements is that the easement may not increase in size or area over time. In many easement agreements the utility company may be able to increase the size of the easement with notice, but the easement could have size limitations. Importsant to what this size limitation is may be state law, and possibly Arkansas law (particularly as it relates to public utilities). In addition, any funning or maintenance of the utilities in the easement area must be done by the utility. Any future expansion or relocation of the utilities in the easement area will also likely be done by the utility. (And not by the landowner.)
Disadvantages or Concerns of Utility Easements for Landowners:
A landowner may be concerned with the location of the easement on his/her property. For example, the landowner may be concerned that the easement is too close to a structure (such as a house, barn or shed). Or, the landowner may be concerned that the easement is along a portion of his/her property that he/she may frequently use (such as a private road). Additionally, landowners should be careful that easements that are offered adequately address the need and manner in which utilities may be able to utilize the easement.
