As some of you may have heard, there is a proposal for a natural gas pipeline to run from the New York border across Berkshire County and to Dracut, MA. I inquired of the Massachusetts Association of REALTORS for assistance with a clarification on the issue of eminent domain and REALTOR disclosures required. I received a fantastic response from MAR Legal Associate Counsel, Justin Davidson (and Lee, MA Native!) Below are his comments on each topic:
Eminent Domain: Issues Exist
- 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…).
Disclosures to be Made to Prospective Purchasers
- 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.
Stay tuned as more information becomes available. If you information on this topic, plese keep us up-to-date as well. Simply e-mail and news to Sandy@BerkshireRealtors.org Many thanks!