If your development projects fronts on a state road, then it is likely that you will need a Highway Occupancy Permit (“HOP”) from PennDOT. If you need a HOP from PennDOT, then it is very likely that you will need to improve one or more state roads. If you need to improve one or more state roads, then it is also likely that you will need to obtain right of way or easements from third party property owners. Well now . . . as most of you know who have been through this process . . . there is nothing more frustrating in the real estate development approval process than having to obtain right of way from third party property owners. Why is it frustrating? Because, as a developer, you do not have much leverage to force these property owners to grant you this required right of way, particularly when it is needed in order to complete roadway improvements that are being required by PennDOT or the municipality as part of your project.
In the past, developers would obtain right of way, in the form of a PennDOT deed, directly from the property owner to PennDOT. Now, in accordance with PennDOT’s Publication 282, the deed for the right of way must be conveyed from the third party property owner to the applicant, then a separate deed, using PennDOT’s form, from the applicant to PennDOT. In addition, no deed will be accepted without PennDOT’s review of a title search to confirm the owner of the right of way and that there are not any mortgages, judgments or other monetary liens recorded against the subject property. If there are any such monetary liens, then a release may need to be obtained from the mortgagee. Another issue faced by developers, when working to obtain the HOP from PennDOT, are easements that are required by PennDOT or the municipality beyond the right of way area. These include site distance easements (i.e., the right to remove all vegetation within the certain area of a third party property), drainage easements (the right to drain water onto the property of a third party owner), grading easements (the right to regrade the property of a third party owner), among others.
So, what happens when the property owner refuses to grant this required right of way or easement? If you are lucky, you go back to PennDOT and the municipality and explain, and they allow you to modify your plans so that you do not need this right of way or easement. If you are not so lucky, then you have to “beg and plead” either PennDOT or the municipality to condemn the property interest at issue. It is extremely unlikely that you will ever get PennDOT to proceed with this proposed condemnation, unless the proposed roadway work is part of a previously approved PennDOT plan that you are offering to do on their behalf. You have a much better chance at convincing a municipality to condemn the land but, to do so, you normally have to show the municipality that you had the property interest appraised and that you made fair offers to the third party property owner for this property interest. If you can convince the municipality to move forward to condemn the property interest, then you will likely need to enter into an indemnity agreement with the municipality to reimburse them for all costs incurred by the municipality in connection with any such taking. Many times third party property owners will file preliminary objections which can, at times, extend the time period to obtain this property interest for months, and, at times, for years. Putting a good plan in place to address and/or obtain these required third party property interests, up front, and having an open dialogue about the proposed roadway improvements with and without your ability to obtain the third party property interest, again up front, is the best way to handle issues related to obtaining these required right of ways and easements. That is, getting the municipality to “buy-in” to the roadway improvements will help you later to secure the required right of way and easements.
If you should have any questions on this topic, or should need our assistance to help you secure required right of way or easements, please contact Rob Gundlach at (215) 918-3636 or email@example.com.