Dissecting Right of Entry Agreements: Essential Elements and Their Significance

What Is a Right of Entry Agreement?

At its core, a Right of Entry Agreement (the "Agreement") is a legal document that allows an entity (the "Provider"), in most cases a utility provider, the ability to temporarily use your property to perform specific work. The ability for entities to acquire the Agreement is granted under the legal concepts of easement and license. Common examples of an Agreement can include consent to enter the user’s property to install or maintain utility lines, as well as stationing a portable toilet on private property during construction in the area . It is expected that any such Agreement should outline the terms and conditions that will govern the rights of the parties in connection with the entry, use and restoration of the property. Since only temporary access is being sought, the Agreement should specify the short duration of the license. Generally, this type of Agreement will not require the Provider to compensate the property owner for the costs of entering their property.

Essentials of a Right of Entry Agreement

While the contents of right of entry agreements will vary depending on the parties and particular circumstances, there are some common conditions that are typically included in these agreements. The agreement should always identify the parties, address the scope of access (ie the property subject to the right of entry, the nature of the work to be conducted and set out the owners rights in respect of the area of the property that is affected) and address the term of the right of entry (ie the period of time in which the right of entry is granted). In addition to describing the general term, provisions are often included which require that the work be completed in a timely manner. Finally, restrictions on the right of entry are common, particularly with respect to access to certain areas of the subject property and with respect to the activities that the entering party can perform while on the property.

Implications and Specifics of Right of Entry Agreements

When entering into a right of entry agreement, particularly those which have an extended period of years, it is important to understand the legal ramifications involved and to consider certain factors that are implicated which may affect both your property rights and potential liability. A right of entry agreement is a contract, and subject to traditional contract law, including vagueness pitfalls which if not heeded, can result in an extended term even after the termination event occurs. This concept has been the subject of multiple land use matters, particularly those involving trails or paths to be dedicated to a local municipality or private land owner. Such agreements have been drawn too broadly and when the triggering event occurs for terminating the path or trail, the (former) trail or path is still on the property. The net result is an ambiguity which leads to the ability of the municipality or private land owner to maintain the status quo despite the termination of the agreement.
As a property owner one needs to consider the condition of the property to be used during the term of the right of entry agreement and the condition of the land at the end of the term. While no one expects the condition to be exactly the same, one does expect that general conditions would be maintained in accordance with the intended use or expressed specific terms of the right of entry agreement. This becomes more critical if there are improvements, enhancements or modifications to the property to be installed. There is much case law on point that a right of entry agreement without a clear and unequivocal language to restore the condition of the premises, may allow the developer to limit its obligation to the restoration of those improvements or installations caused by the failure to perform the right of entry agreement, so as to avoid consequential damage claims. Property at times passes to heirs, whether in the case of private ownership or private company ownership. It is important to think about that particular issue and build into the agreement a mechanism that ties restoration obligations to the term defined so that the rights and obligations inure and are binding upon not only the current owner but the future owner.
Liability for various activities is also an important factor when considering the entering into of a right of entry agreement. For example, who is going to inspect? Who is liable for personal injury on the premises and how is liability insurance to be protected or mitigated?

Advantages of Right of Entry Agreements

With respect to the owners of the land, the benefits of the right of entry agreement include that the moving party either agrees to or gives up rights that it would otherwise have with respect to compensation and in return get immediate access. For example, access to the land of a property owner can be given immediately with a limitation on duration (i.e. six months) in exchange for a party giving up the right to advance a claim for a right to make alterations to the property (or vice versa). As another example, the ability to either agree to or give up a right to pre-judgment interest. In many cases this consideration provides the property owner with some liquidity during a project.
In the case of an electrical utility, other benefits include the certainty of there being no court proceedings to compel access and the ability to more easily access the land.
Another benefit where there is an easement or statutory right of entry, is that the right of entry agreement can provide certainty to both parties about delay compensation and/or damages for dispute resolution (if any) and access restoration (i.e. in the event that the project is abandoned). Likewise, with respect to an easement, a right of entry agreement can provide certainty to the land owner about the timeframe of the project (i.e. if and when it is completed) within a set area of land.
In summary, there are many instances where the right of entry agreement is used and benefits both parties. A list of such scenarios includes:
• Compulsion of access: an existing agreement has expired or has become frustrated or a dispute has arisen and pre-emptive or defensive action is to be taken.
• Pre-emptive or offensive action: during negotiations for a contract right of access, before proceeding with an order to compel access.

Common Circumstances for Right of Entry

As an extension of the purpose of a Right of Entry Agreement, other common situations where a Right of Entry is frequently required are for the following:
(a) Construction Projects – This is self-explanatory and commonly exercised. For various reasons, a construction project may require entry onto a property for inspection; to remove debris, debris removal, or to conduct a survey for expansion or removal of structures (i.e. fences, buildings, agricultural improvements, etc.).
(b) Utility Repairs – Electric and/or Gas utilities commonly seek to enter property to inspect their lines; to preform repairs; to replace utility poles; to trim trees; or any other reason in order to ensure the integrity of the utility company’s service and reliability to the property. Water companies also may seek to enter to inspect and/or repair shut off valves , meters, etc. The telecommunications industry also may seek to enter a property for similar needs.
(c) Environmental Assessments – In accordance with applicable Federal and therefore State Laws, a Right of Entry Agreement may be required for Environmental Assessments to be conducted on a property. Environmental Assessments commonly are sought to determine the existing ambient environmental conditions of the property relative to background conditions of the property and surrounding properties.

Writing and Amending Right of Entry Agreements

A right of entry agreement (or temporary construction easement) should be drafted up during the due diligence process and should read just like a construction contract with all the necessary provisions, such as insurance requirements, warranties, indemnification, responsibility for costs and coverages in the event of floods, landslips, mudslides, the need to make sure the owner or contractor, as the case may be, provide as-built drawings, an end date, dates and times of entry and initiation of construction work, the right to enter onto the estate to do repairs or reinstate easement after expiration of the date, and default procedures. The parties should also consider whether the right of entry will have any impact on the earnest deposit or building loan fees.

Managing Disputes in Right of Entry Agreements

Disputes are inevitable in any business and industry and oftentimes these issues will come in the form of a dispute over a right of entry agreement. Disputes can occur in regards to the terms of the agreement including, but not limited to, terminations, renewals, adjustments, construction, etc. Here are some common areas of concern and ways to remedy those concerns:
Dispute Resolution Terms and Procedures
One area of dispute that various states have considered is whether to include binding arbitration provisions. For example, California Public Utilities Code, Section 710 provides that an operator shall offer binding arbitration as a method of resolving a dispute. However, if the landowner or lessee refuses the offer, then the operator cannot pay the landowner or lessee less than the fair market value of the land that is the subject of the agreement.
Timing of Excess Lands Payments
If the quick-take statute applies to the right of entry agreement, most states require the operator to pay the initial payment on the right of entry agreement 60 days after it takes possession of the land, but this may not be long enough to close the property if the local office of the U . S. Army Corps of Engineers is involved.
Termination Deadlines and Damages
In terminating an operator under a quick-take statute in most states, an operator must provide advance notice, as stated above, and generally damages may be available for the time between the issuance of the quick-take order and the final taking of possession. California, for example, limits the amount of damages to the difference between the fair rental value of the use of the property for the time it was in the possession of the operator and the rentals actually paid by the operator.
Construction Scheduling and Delays
Many of the issues regarding construction delays and scheduling by the landowner were perks offered by the operators when the parties entered into the right of entry agreement, but because they do not appear in the right of entry agreement, the operators deny liability. Including these obligations within the right of entry agreement, even if they are contractor warranties, is one way to resolve these issues in a manner that protects the landowner.