You should make yourself aware of pipeline and other easements when buying land in Texas. In this video, Landowner Rights Attorney Philip Hundl describes the typical process for buying land in Texas, and he describes how you can become aware of pipeline and other easements affecting the land you’re buying.
Call or text 800-929-1725 for an appointment. We have five offices in Wharton County, Fort Bend County, and Matagorda County, and we serve clients from all over Texas. Appointments can be in-person, online, or by phone.
Summary of Be Aware of Pipeline and Other Easements When Buying Land
Hi, I’m Philip Hundl. As part of this video series that I’ve been doing from time to time, I’d like to talk about how you can become aware of pipeline easements, and other easements, if you’re a potential purchaser of land. High voltage transmission line easements, road easements, and various access easements can encumber property. You need to be aware of existing easements before purchasing that property.
Typical Process for Purchasing Property in Texas
This is a summary of the typical process for purchasing property in Texas. It doesn’t always happen this way. There can be cash deals without title companies and title insurance involved.
But for the most part, when someone’s purchasing land in Texas, they will want to get a title policy ensuring that whoever they’re buying the land from is in fact the fee simple owner. So let’s talk about that process.
Title Examination Starts with an Earnest Money Contract
Normally the process starts with an earnest money contract signed by both parties. That earnest money contract is taken to the title company with the earnest money. That “opens title”.
Then the underwriters begin the title examination. The title examination goes back in time and documents the chain of title. That chain of tile details how the property passed from one owner to the next to determine the current owner of the property.
Hopefully, the chain of title establishes that the current owner of the property is who signed the earnest money contract as the seller. If not then you’ve got some issues.
A title commitment is created based on the title examination. The title commitment says that if these things are done, then a title insurance policy will be issued.
The title commitment includes certain schedules or pages. There’s a Schedule A, and it tells you the value of the title insurance policy that will be issued. It names the record title owner and provides a legal description of the property.
You need to make sure that the legal description of the property matches your understanding of what you’re buying. If you’re buying 10 acres, make sure the title policy describes those 10 acres.
Check Schedule B of the Title Commitment to be Aware of Pipeline and Other Easements
Schedule B is the one I really want to focus on. Schedule B talks about the different encumbrances on the property. This is where you’re going to be made aware of any oil and gas leases, utility easements, power line easements, road easements, and pipeline easements. If there are deed restrictions or HOA restrictions, they will be there as well.
Lots of times Schedule B has catch-all terms like “all leases recorded or unrecorded” or “tenants in possession”. Talk with your attorney about any terms you don’t understand or are unsure of.
The title company is going to have easement documents available for you. You should review these easement documents with an attorney who is familiar with real estate. Your attorney can help you understand the implications of the easement.
Obviously, you can see a high voltage transmission line if you go out to the property and look at it. But pipeline easements are sometimes not as identifiable. There should be pipeline markers at or near the boundary line of the property or where it crosses a road, but sometimes not.
As I mentioned in another video about Atmos Energy, there are these very old easements that actually may be inactive. However, because of the way they were written, they’re permanent. They still exist. A pipeline company could potentially reactivate them and install a new pipeline. That’s why it’s so important for you to be aware of pipeline easements even if they’re not visible from the surface or if they’re inactive.
Your Attorney Can Help You Understand How an Easement Will Affect Your Use of the Property
Not too long ago, a landowner purchased a property, and it was burdened by pipeline easement. The easement area was about 60 feet wide.
The landowner just wanted to build a driveway across the easement. According to the easement terms that were agreed to by the prior owner of the property, a road over that easement area needed to be approved by the pipeline company.
That sounds easy, but the pipeline company required engineering drawings, diagrams, and other documents from the landowner. So it was a burden on the landowner to get all that information to the pipeline company.
Then the pipeline company really wasn’t in much of a hurry in reviewing and providing approval. All the while the landowner was on a tight schedule to get this road built and to start his construction on his home. That created unforeseen delays and caused some problems for the landowner.
So you need to check Schedule B of the title commitment. Be aware of pipeline easements and any other encumbrances.
Now just for the sake of completeness, Schedule C of this title commitment talks about the things that need to be done by the parties to clear up any defects of title. Once these are done, then the real estate closing can happen and good title can be transferred.
That doesn’t mean that title will transfer without encumbrances. The title will transfer subject to those encumbrances on Schedule B, but at least the transaction can be done.
So hopefully that’s helpful. Again, please make sure you’re aware of pipeline easements and any other encumbrances affecting your land purchase. We strongly recommend that you review the language and any implications of these encumbrances with an experienced property attorney.
Get the Help of an Experienced Landowner Attorney
Call or text 800-929-1725 for an appointment with Attorney Philip Hundl. Appointments can be online, in-person, or by phone. We have law offices in Fort Bend County, Wharton County, and Matagorda County, and we serve clients all over the State of Texas.
