What is a construction easement?

August 19, 2024

FM Legal

The main purpose of a construction easement is to facilitate construction of a project (for example in the case of EnergyCo a high voltage power line) for a limited period of time. Generally for large infrastructure projects the length of time will vary from three to five years, with the ability to extend the construction easement if there is delays.

Key terms of the construction easement are included within a legal agreement between the Government agency and the private landowner. The most important part of the agreement is the Property Access Plan (PAP) and the money payable to the landowner for Government gaining the construction easement.

The PAP sets out the rules for EnergyCo or Transgrid or another Government agency accessing the land. Typical PAP’s address items such as:

• An overview of the estimated timing of the construction program
• Describe the construction works (ie a high voltage transmission line)
• Outline how access to the works area is to be achieved (ie through a access track or similar)
• What happens when there is damage to crops, stock or fences (usually it is reinstatement at the Governments cost)
• Biosecurity
• Consultation with the landowner (usually the provisions relate to both parties acting in good faith and ample time for the land owner to consider what is provided by Government)

Payment for the construction easement is by negotiation, and the land owner having excellent valuation and legal advisors (with the costs payable by Government) are imperative in achieving an outcome suitable for the landowner. The annual rental (noting the construction easement is for temporary access) is a generally set on a rental per cleared hectare per annum. The amount payable is included in the legal agreement.

If suitable terms for a construction easement cannot be agreed (or the landowner refuses to negotiate) then the Government can force construction access through court processes. This does not mean you don’t get an annual rental for your land but in the end the Government will gain access. The court process is long and complicated, and you need experienced legal and valuation advice (with your costs payable by the Government) in order to achieve the best possible financial outcome.

Most construction easements are concluded by negotiation but the courts are there for the benefit of all- if your expert valuation and legal advice indicates Government is ‘low balling’ you then taking a matter to the courts is a good option.