ROW agreement or just an option

If you look closely at ROW agreements presented to you, you will see that payment will not be made until some time in the future. In other words this is just an option being taken by the company. If the company wants a true ROW agreement then stipulate un the agreement that payment is to be paid within 30, 60 days. And no assignments should be allowed.

A friend showed me a ROW agreement presented to him. According to the agreement he would not recieve payment for up to three years. That's just an option. I wouldn't accept this.

Just a thought, anyone else run into this situation

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Permalink Reply by Dexter Green on August 31, 2014 at 4:56pm

Most ROW contracts are option agreements.  They don't pay you because they want to have the line absolutely set in stone and be certain that they know exactly where it's going.  

Permalink Reply by Hunter on August 31, 2014 at 5:04pm
They send landmen out to get options then they work out details of exact location of line. My group told them to shove the option. They paid us 42.50 ft for a one year option upfront.
Permalink Reply by Dexter Green on August 31, 2014 at 5:20pm

If your group is large enough to give them geographic assurances then I'm not shocked they were willing to pay you up front.  If you're one landowner with 300' of a 25 mile long line then I doubt you're given the same consideration.

Permalink Reply by Hunter on August 31, 2014 at 5:45pm
Our group had 5 landowners with about 8000 ft of line. They had to go through us so they had little risk with paying upfront for option.
Permalink Reply by Dexter Green on August 31, 2014 at 5:58pm

Good for you guys.  Nice to see the landowners get what they wanted.

Permalink Reply by Barry D on September 1, 2014 at 8:47am

Dexter,

Don't you think some monetary compensation is do for allowing the option ? And shouldn't the time frame be short ?

Permalink Reply by Dexter Green on September 1, 2014 at 2:38pm

What I think and what these individual companies do are two very different things.  I get why they resist upfront payment.  It makes sense.  But that doesn't mean I necessarily agree with it.

Permalink Reply by Philip Brutz on September 2, 2014 at 5:25am

MarkWest paid me the entire amount before they started any activity.

Permalink Reply by Barry D on September 2, 2014 at 5:29am

Phillip,

How long did it take to get paid from the date of signing ?

Permalink Reply by Philip Brutz on September 2, 2014 at 5:33am

Less than one month.  They were in a big hurry to get all of the trees cut before April 1st because of the Indiana bat regulations.

Permalink Reply by Barry D on September 2, 2014 at 5:43am

Phillip,

So I guess a one size fits all answer may not be true for everyone dealing with pipeline ROW requests. Except of course getting good legal advice.

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