You have a duty to know this, and disclose this!
While it’s a long way off, the multi-billion dollar Tennessee Gas Company pipeline expansion project proposes that a high-pressure, 36-inch gas pipeline enter Berkshire County in Richmond, and travel through Lenox, Washington, Dalton, Hinsdale, Windsor and Peru. There is a separate project seeking to add a 3.8-mile, 36-inch diameter storage loop to one of Sandisfield’s two existing gas lines. More than a dozen Western Massachusetts communities have passed non-binding resolutions at town meetings opposing a new pipeline.
Homeowners are being contacted to provide consent to survey their land for this potential pipeline. Many homeowners have resisted and are organizing against the possibly for a pipeline. The state Department of Public Utilities can overrule homeowners who try to block surveyors. The company, Tennessee Gas Company LLC, a subsidiary Kinder Morgan, is seeking easements through Massachusetts, starting in NY and ending in Dracut, MA. for their line. Depending on the land, typically the final right of way would be 50 feet wide, generally 25 feet on either side of the pipeline. During the construction, a temporary right of way between 100 – 150 feet would be required. Specifics will be discussed with each individual landowner during easement negotiations.
Map from Kinder http://www.kindermorgan.com/business/gas_pipelines/east/neenergydirect/projectmap.pdf
Clearly Buyer agents should be aware, when working with buyers in affected communities, about the proposal. It is difficult to say with certainty where the pipeline will run because everything is “proposed” and sometimes very generally at that. You can urge your buyers, if concerned, to investigate further, can ask the seller if they that received a request for surveyors to enter the land, etc. For those landowners seeking to sell their home, Seller’s agents may have a duty to disclose.
According to MAR Legal Counsel:
- The disclosure issues will be different for each individual property. For a property that has already agreed to an easement, that easement would arguably serve as constructive notice and should be disclosed to any buyer. If the company has accessed the property or requested access to the property to survey it then it would likely be a good idea to disclose that to any buyer before an offer is made. Keep in mind the Attorney General’s 93A regulation “. . . any person or other legal entity subject to this act, (specifically includes all real estate licensees) who fails to disclose to a buyer or prospective buyer any fact, the disclosure of which may have influenced the buyer or prospective buyer not to enter into the transaction.”
- Finally, disclosure questions related to properties nearby, but not part of, the pipeline would need to be viewed in light of Massachusetts case law, specifically the Urman v. South Boston Savings Bank case dealing with “off site” defects. Urman held that a broker has a duty to disclose: (1) physical conditions; (2) which are known to a business person (seller or broker), but not known and not readily observable by the buyer; and (3) be sufficiently important that they affect the value or use of the property.
In Lenox, two pipeline routes under consideration would follow utility corridors through the reservoir area on Lenox Mountain and the adjacent, town-owned Kennedy Park.
According to the chairman of the Sandisfield Board of Selectmen, that additional pipeline will run where two current lines rest, in the state-owned DCR lands of Spectacle Pond and Otis State Forest. While the pipeline location may not impact land use of current or future residents, the construction process is expected to run through the fall of 2016, impacting conservation land and will include draining over one million gallons of water from Spectacle Pond in order to test the pipe.
On June 27th, the Berkshire Eagle reported that legislators in north-central Massachusetts are encouraging Kinder Morgan to run its proposed natural-gas pipeline along state highways like the Mass Pike, rather than through rural neighborhoods. No one has yet to know if that is a real possibility or not.
MAR also weighed in on eminent domain:
- The pipeline company must first obtain a certificate of public convenience and necessity from the Federal Energy Regulatory Commission (FERC) for “the construction or extension of any facilities…for the transportation in interstate commerce of natural gas.” (15USC §717f(c)). A FERC certificate confers on the developer eminent domain authority. (15 USC §717f(h)). The FERC certificate provides a pipeline developer with the authority to secure property rights to lay the pipeline if the developer cannot secure the necessary rights-of-way from landowners through negotiation. I believe that this pipeline is intended to be underground so the company would be seeking easements from property owners. They may seek larger temporary easements for construction and then a smaller permanent easement (50’ or so) once the construction is completed. The easements generally prohibit the erection of buildings and planting of trees so as not to hinder access to pipeline. Eminent domain would be a last resort for the company. One other note is that the federal Natural Gas Act preempts any state or local law that would obstruct the federal law (siting or zoning…).
Stay tuned as more information becomes available. If you have information on this topic, please keep us up-to-date as well. Simply e-mail any news to Sandy@BerkshireRealtors.org Many thanks!