Negotiating Easement Request From Utility

[Krystle Khoo]

The local utility company is expanding services to our part of town and are requesting an easement on one of our SFH rentals in order to run a water main through the front of the property and a sewer line through the back. We are trying to find our negotiation position and power based on two perspectives:

1) What is the cost to us?

-The easement will restrict the building of structures, pools, decks, sheds etc at the back of 20 ft of our plot. What value should I give the lost use of this land?

-Our initial consideration is that it should be based on the market value of the land, not the tax value, and that we should consider not just the decreased sales price but also the opportunity cost of that easement for the years that we keep this property.

-What other risks or negative impacts will this easement expose us to?

-How should we appropriately compensate tenants for the lost use of both the drive way and backyard of the property? Property rents for $980 per month.

2) What is this worth to them?

-What do developers budget for easement purchases? What do utilities allocate for this?

-If we hold out for a higher price, I imagine at some price it will be worth the utility's time and money to re-route both lines through other properties instead of ours. What other alternatives could the city's utilities company have to avoid our property and exit the negotiation?

What else should we be thinking about ? We intend to hold this property as a long term rental, but would also like to know how it will affect us when we decide to sell it.

Any additional advice would be much appreciated. Thank you!!