Pipelines are linked to many environmental issues. The easement agreement should require the pipeline company to comply with all local, government and federal environmental laws. The pipeline company should compensate the landowner for any environmental damage caused by the pipeline or its operation. And the landowner should also ask Pipeline Company to pay the costs of all environmental reclamations. The pipeline company is required by law to post certain signs along the pipeline route. A landowner should cooperate with the pipeline company in the facilitation agreement to determine where the panels will be installed. Otherwise, the pipeline company can post the signs anywhere along the relief. An excellent overview. I practice law at New York State, and although our governor has stopped almost all oil and gas drilling, pipeline companies have not stopped taking pipeline facilities or condemning them. The Federal Income Tax Act treats income from the granting of the facility (sale of a stake in the property) as long-term capital gains when the landowner owned the property more than one (1) year prior to the granting of the facility. These revenues are subject to federal income tax for the year received.
But the proceeds obtained as compensation for damage caused to the property by the presence of the pipeline reduce the base of the landowner in the property (the amount the landowner paid for the property). Federal income tax is only payable when the landowner sells the property. Thus, by dividing the payment between the grant and the damage, the landowner can delay the payment of the federal damage tax until the landowner sells the property. Detailed information on the taxation of pipeline facilities (called involuntary conversions) (www.irs.gov/publications/p544/) can be found in IRS publication 544. Since the pipeline will remain on the owner`s land for decades or more, it is very important that the landowner takes the time to negotiate a strong easing agreement on the front. A landowner should seriously consider hiring a lawyer to support these negotiations. Many lawyers dealing with these matters are willing to demand a down payment from the landowner, or even to offer free initial consultations. Since the pipeline company installs its equipment on the land owner`s land, the pipeline company should assume the risk if legal action is pending in relation to the equipment.
Suppose a customer passes over the landowner`s land and passes over a piece of the pipeline company`s mislabeled surface equipment. The fall injures the guest. In addition to the pipeline lawsuit, the client could also sue the landowner because the accident was caused by a dangerous condition on the owner`s property. Including a compensation scheme, the landowner may be protected from liability for actions related to the pipeline and other facilities. The landowner should limit the pipeline company`s ability to provide additional facilities in the facilitation area. Therefore, if another pipeline company or other distribution companies want to take advantage of this facility, they must look at the owner of the land and not the pipeline company and compensate them.