Overview of Utility Easements in North Carolina
An easement is a property right that gives one person the right to use a portion of another person’s land for a specific purpose. If you have seen a utility pole on someone’s property, you have likely seen an easement. A utility easement, then, is the legal right for a utility company to access your land—not necessarily for their benefit, but for the maintenance of their power lines and poles. One thing the public needs to know about a utility easement in North Carolina is that it is a written document. When an easement is executed, the utility has the right to use the property, within what is called a servitude (the space an easement uses). In other words, the utility can use the centermost part of the servitude to maintain the utility’s power poles , lines, underground cables, pumps, and other items necessary for the utility to operate.
In North Carolina, a utility easement is a property right granted by a property owner to a utility company, to give the utility the right to service and maintain their equipment and connections on property that is owned by someone else. Granting a utility easement essentially provides a utility company with the right to have an "easement" over a certain area of your property that they do not own, free of charge. However, just because granting this type of easement is free, does not mean it is legal. You need to consider whether or not the easement is actually in the utility’s right of way.
Different Types of North Carolina Utility Easements
In North Carolina, there are multiple types of utility easements, each serving a specific purpose and subject to different considerations. Some common types of utility easements encountered in North Carolina real estate transactions include those for electrical companies, water and sewer service, telecommunications companies, and those for private water users. These easements may be subject to additional restrictions or conditions depending on the type of utility involved.
Most electrical companies utilize large underground or above-ground rights-of-way to accommodate their power lines and equipment. Such rights-of-way tend to be relatively narrow and can sometimes be exclusive to the electrical company. For example, electrical rights-of-way agreements imposed by Dominion Energy show that the power company is permitted both to install and to maintain its power lines, related equipment, and facilities across all parts of the tract. Within their rights-of-way, electrical companies can prohibit blueberries from being grown, but they won’t restrict the planting of corn. In other words, the easement does not generally give an electrical company rights to exclude the landowner from using land within the easement but shall give it right of access to install and maintain its facilities. But it greatly restricts the landowner’s ability to use the land, to deny access to others, and to build permanent structures.
Water and sewer easements in North Carolina can run on either side of public roadways and usually extend directly in front of the property line over which they are granted. For example, the City of Raleigh maintains an existing easement for sewer purposes. The City has the right to construct and maintain its facilities across the entire width of the easement, so the property is neither locked in by the sewer line nor able to be used by another water user. In fact, certain cities will allow property owners in close proximity to extend a water supply line as long as the property owner properly insures the easement will be available for use by other water users.
Telecommunications easements are usually exclusive. For instance, Windstream Communications owns a 15-foot-wide telecommunications easement beginning at the center of the road extending 7½ feet in front and behind the right-of-way line on both sides of the road. The easement is "exclusive, perpetual and perpetual, binding on all successors and assigns . . . to all future landowners and all subsequent purchasers of the Property." No structures or fences may be permitted within 7.5 feet of the centerline of the road and no trees may be cut in a 10-foot wide area around the easement without the prior consent of the telecommunications provider. The easement gives the telecommunications company the right to install and maintain a network of poles, wires and other fixtures (such as cabinets) across the entire easement. The landowners can use the rest of the property but cannot interfere with the telecommunications company or with any other company permitted to install similar caches, poles, and wires.
How North Carolina Utility Easements Are Created
Establishing utility easements in North Carolina often begins with negotiations between the owner of the land and the company that intends to use the easement. In such negotiations, the parties reference the statutory requirements that work in tandem with the landowners’ rights under the North Carolina Constitution. Specifically, the relevant statutory provisions are found in N.C. Gen. Stat. § 62-158 through 62-161 and N.C. Gen. Stat. § 40-55.1.
After the parties agree to the essential terms of an easement, the utility company typically drafts an easement agreement for the landowner’s execution. Under the statutory provisions referenced above, the owner is not required by law to sign the agreement, unless the utility has already obtained condemnation authority. This can, of course, be a non-issue if the parties can reach an agreement without the condemnation process.
If the utility has condemnation authority – which it must obtain from the North Carolina Utilities Commission prior to commencing the condemnation process – then the owner must sign the proposed easement agreement or a proposed right of way plat map within thirty (30) days after the utility has transmitted the form to the last known address of the owner of the land, as shown on the most recent tax listing for the land. If the owner does not sign within the thirty (30) days, the utility may commence condemnation proceedings in Superior Court in the county where the land is located. Under N.C. Gen. Stat. § 62-158(a), the utility is entitled to recover attorney’s fees and costs of the condemnation proceeding, if it obtains the easement. The dispute will then proceed as a condemnation proceeding (resulting in a legal proceeding before a judge and jury if the matter cannot be resolved through consent judgment or settlement).
Easement agreements are recorded with the Register of Deeds in the county where the easement is located, and the Register of Deeds will return the original document to the transmitting utility after recording on the same day.
Property Owner Rights and Obligations
To balance and achieve their purposes and the rights of the companies that hold easements, North Carolina law recognizes detailed rights as well as responsibilities of property owners under utility easements.
For example, the statute provides that rights to an easement include the right to install necessary equipment within the easement. In addition, company owners have the right to cut down trees that interfere with the easement, mark the location of the easement, and shift the location of the easement into areas of the property outside the easement, within certain limits.
Property owners in a Metrolina neighborhood experienced an issue that illustrates the limitations of property owners’ rights with respect to how easements are marked. The neighborhood had signs identifying the easement locations for the utilities. When the signs were removed, the utility companies placed new signs in the new locations. This aggravated some property owners who objected to the location of the new signs because in their opinion the signs did not identify the correct easement location. However, because the law gives the companies rights to move easement signs to locations "no further than 10 feet from the previous location," the property owners were out of luck.
Among the many responsibilities of property owners are those in Section 62-144. Property owners are responsible for meeting vegetation maintenance responsibilities during the life of the easement. This means allowing companies access to the easement in order to remove existing vegetation such as trees and bushes and to keep vegetation out of the easement in the future. If an owner does not keep vegetation out of the easement area, the electric company can do the work itself and bill the property owner for the cost of the work.
Property owners who refuse to pay the bills may be taken to court and the company may also perform the work and charge the property owner a higher "reasonable charge" if necessary, to gain access for the crew.
Resolving Conflicts Related to Utility Easements
While the existence of a utility easement generally should not cause problems for a property owner, conflict may arise if the way in which the easement is exercised goes beyond the scope of what the grantor intended when the easement was created. A common dispute occurs when damages result from the exercise of an easement or when a landowner believes that a utility is not exercising the easement to the "fullest extent" possible. Sometimes a property owner will claim an easement was never granted or has been abandoned. Courts have the power to resolve many of these disputes. In some cases, all a party needs to do is bring a claim for declaratory judgment, having the court construe the easement and determining the rights of the parties. In North Carolina, the Declaratory Judgments Act provides that a person may "have determined any question of construction or validity arising under a statute… or under a contract or other written instrument." N.C. Gen. Stat. § 1-254. Declaratory judgments are proper where a party has a real and actual, as opposed to theoretical, present claim or grievance. Basically, a declaratory judgment may be used to establish parties’ rights under an agreement between them. Courts may also utilize a declaratory judgment to resolve a dispute regarding whether an easement exists. Courts may decide questions regarding abandonment by referring to the language of the easement grant, any context which can be construed from that language and any actions of the parties which may indicate intent. Where there is no writing creating the easement, courts may use oral testimony to determine whether an easement was created, but the case law shows that easements by prescription generally require clear and convincing evidence of a continuous, visible, uninterrupted, and adverse use . If a court finds that a utility has over-exercised an easement, a court has the authority to enter an injunction to prevent the utility from further over-exercising its rights. In Hughes v. N.C. Electric Membership Corp., the North Carolina Supreme Court enjoined the defendant from using an easement for anything other than its intended purpose and, among other things, removing the poles it had previously placed in the easement. 240 N.C. 324 (1955). More commonly, courts recognize that parties have considerable leeway in determining the location of an easement and may generally relocate the easement if the relocation does not affect the burdened property’s use or otherwise injure the landowners. North Carolina trial courts have held that a utility easement for a member of an electric membership corporation was validly relocated, even though the new location of the utility pole was more than 530 feet from the original location. Vandiford v. Tri-County Elec. Membership Corp., 48 N.C. App. 258 (1980). Courts have also ordered the relocation of gas utility piping equipment from a property owner’s front yard, despite his concerns about the location of the old piping being a nuisance to his customers. In Roto-Rooter Servs., Inc. v. Town of Carrboro, 34 N.C. App. 683 (1978), the plaintiff landowner acknowledged that the easement was never intended to give the defendant the right to use land not in the deeded easement for construction or placement of its equipment. The Court enjoined the defendant from using the blended area of the easement to access adjacent land, holding that the statute gave "governmental units special rights in easement easements for mains, pipes, conduits and other transmissions facilities along, across and within the public street" and that the statute did not allow for use of the easement beyond the scope of the easement grant. Id. at 697.
The Effect of Utility Easements on Property Value
One of the most common questions landowners in North Carolina have concerning utility easements on their property is how do these easements affect their property’s value? Whether partial government taking, complete government taking, or private easement, courts wrestle with a formula to calculate damages and courts are not uniform in their methodology.
Experts for the landowning client may claim that beneficial interest is subtracted from the taking. In other words, if the utility company has placed something on the property that may be viewed as a benefit, then the experts for the landowner may tell the court or jury to reduce the valuation by the amount of the benefit. This typically occurs when the utility company has paid (or offered to pay) to install a utility pole and/or other utility equipment.
Conversely, the utility company may argue that damages should be reduced by the cost of restoration to the property. In other words, how much is it going to cost to fix the fence or driveway that was damaged while the construction was occurring? This would be classified as temporary damages, i.e., temporary decrease in value during the construction in order to restore it to its original condition after construction is complete. However, the landowner would be responsible for any permanent damages, which is landowner’s fair market value before the taking minus landowner’s fair market value after the taking.
Some North Carolina courts, under some factual scenarios, have held that a utility easement on a landowner’s property does not lead to a significant reduction in property value. For example, in a case where an electric utility company placed power poles across a residential lot, the court cited to a high rent district for two pieces of real estate directly across the street from the subject lot, stating that "the poles were hardly visible to anyone crossing the street to the golf course" and thus "even an inexperienced investor would know that the impairment to a landlocked lot in a high rent district would not materially affect the price he would be willing to pay for the property." State ex rel. Utilities Com’n v. Forsythe, 245 N.C. 255, 260-61, 95 S.E.2d 579, 582 (1956).
Termination or Modification of an Easement
North Carolina state law provides some mechanism for terminating or modifying a utility easement that is no longer necessary or useful, ails the utility for providing the service it was intended to support, or that has been abandoned.
Further, a utility easement may either be modified or terminated by a written agreement between an owner of the servient estate (the grantor of the easement) and the utility company. This option is a straightforward means to modify the easement on agreed terms to the satisfaction of both the utility and the property owner.
Each utility company in North Carolina has different internal procedures and requirements that property owners must meet to modify or terminate an easement.
That said, many of these companies will ask for sufficient evidence in writing as part of the mutual modification or termination agreement to confirm that the relevant easement is a utility easement and that the easement no longer serves its intended purpose because the service that it "serves" has been terminated.
Some criteria that utility companies generally require for verification when the service that the easement supports still exists-but the easement may place an unnecessary burden on the owner of the servient estate-includes providing proof that the utility:
Utilities oftentimes also ask that property owners provide an explanation in writing describing how the easement is working a hardship on the property owner and explaining how without the easement, the owner would benefit from the easement’s release.
Statutory abandonment is another method by which a utility easement can be terminated in North Carolina.
While this option does not require consent from the utility, the conditions necessary to effectuate abandonment under the statute differ from those required for the termination of an easement or the modification of an easement by a mutual agreement with the utility. However, an abandonment cannot be shown if the utility has made use of the easement since the time the utility last made use of it. Thus, there is a rebuttal presumption that an easement has not been abandoned if it has been in use at any time within a period of seven years preceding the filing of an action or claim to recover damages for purported non-use of the easement.
Finally, a utility easement can be extinguished through the judicial process by filing a lawsuit against the utility.
Legal Resources
Experienced owners who have dealt with utility easements in the past may have a sense that they are protected against such problems. However, even experienced property owners should make sure that their existing easement agreements are still in compliance with the law. Original requirements regarding easements may have changed, and the owners’ knowledge of the issues may be out of date.
When it comes to finding legal advice about utility easements, the Internet provides a number of resources. For any legal issues related to property rights, the North Carolina Real Property Manual available from the State Bar website is an excellent resource. There are a number of explanations of utility easement requirements, law and conditions.
The North Carolina Utility Commission and the Office of Speculative Utilities also provide resources . For more specific legal advice about a property that has easement issues, or more active ways the law can take shape to protect property owners, the North Carolina Bar Association provides a public lawyer referral service. The North Carolina Bar Association’s Public Service Program offers a lawyer referral service. They match a lawyer with every specific legal problem submitted. The consultation lasts thirty minutes and costs only $50. In many cases, the problems that you will have relating to utility easements can be resolved in thirty minutes. However, if title harvesting and other problems are happening that may require detailed research on title, it is best to check on an attorney that can handle complex property issues immediately.
Finally, it is always a good idea to check with multiple attorneys or referrals prior to signing a retainer agreement. Lawyers have different styles and ways of doing things, and you should be able to find one that is a good fit.