16 Reasons Why a Right-of-Entry Order is Better than a Surface Lease or Easement

Once an agreement on location and compensation is reached with the operator, I advise my clients that a Right-of-Entry Order issued by the Surface Rights Board protects their rights better than signing a Surface Lease or Easement form prepared by the Company.

Some of the reasons for giving this advice are as follows:

1. Oil companies and power companies have standard form agreements which they expect landowners to sign. The wellsite, pipeline or powerline will affect the landowner for many years; however, it is impossible to draft an agreement to provide for all contingencies. Too often landowners who have already signed agreements say “if only I knew what I know now I would have done things differently.” Industry representatives meet every few years to redraft standard form agreements and attempt to bring them up-to-date. Unfortunately, this does not assist someone who has signed an agreement that is now out of date. A Right-of-Entry Order issued by the Surface Rights Board, however, is always open to review. The Surface Rights Act provides that the Board may “review, rescind, amend, or replace a decision or Order made by the Board”
2.  A Right-of-Entry Order may be terminated by the Board if the operator is not using the land.  The standard form Agreements cannot be terminated without the operator’s consent.
3.  The Board may place conditions in the order to protect the landowner with respect to matters such as soil conservation, drainage and weed control.  A breach of the Board Order should entitle the landowner to seek redress from the Board as opposed to having to go through the ordinary Courts.
4. A Right-of-Entry Order must have a survey plan attached. However, when companies obtain signatures on agreements, they may not attach the survey plan until later and landowners may complain that the plan shows a different location than they thought they had agreed to.
5. When the annual rental for a well site or power line is reviewed by the Surface Rights Board, a landowner under a Right-of-Entry Order is entitled to interest on the amount awarded.  But, a landowner who has signed an agreement is not.
6. In pipeline cases, the Board will not hold a hearing regarding damages if there is an arbitration clause in an agreement. The landowner is therefore faced with costs of private arbitration. Under a Right-of-Entry Order; the issue of damages can be reserved allowing the Board to settle the dispute.[
7. The company can stymie arbitration under a private agreement by refusing to appoint an arbitrator.  Under a right of entry order, the arbitrator (the Board) is already appointed.
8. Landowners may take advantage of favourable rulings by the Surface Rights Board.  e.g. that no distinction be made between permanent right of way and workspace on pipelines.
9. Right of entry orders are always on file and easily obtained from the Surface Rights Board.  Locating old private agreements can sometimes be difficult, for example, when the land is being sold.
10. Landowners can avoid situations where the Board has denied jurisdiction because a surface leases has been signed.  e.g. denying the right to a rental review for plant sites. If a plant site is covered by a right of entry order, there could be no such ruling.
11. In the case of Alliance Pipeline Ltd. v. Siebert 2003 ABQB 872, the Court relied upon a clause in the agreement signed by the landowner to grant an injunction allowing the pipeline company access to land outside the right of way without paying compensation.  This would not have been possible if there had been a right of entry order instead of the signed agreement.
12. A Right-of-Entry Order only permits the company to use the land for what it requires at the time.  It cannot, therefore, come along later to put in another pipeline, for example, using the same area covered by the prior Order. This is especially important because under a Right-of-Entry Order, the Company must pay the entry fee for all the land which they use a second time.
13. If an operator fails to pay the required compensation under a private agreement, the landowner would have to sue to recover.  An Order from the Surface Rights Board, however, can be filed directly as a Judgment with the court.
14. The company’s surface lease forms usually have a “default” clause stating that they cannot be considered in default until the landowner has given them written notice and time to respond.  I have had companies refuse to pay interest on overdue rent by using this clause to argue they were not actually in default. They would not make this argument with an order from the board.
15. The company cannot say “we have leased this area, we can do what we want.”  For example, companies with a surface lease for an access road will often sub-lease the road to a second company for the second company to access a different wellsite. This would not be possible under a right of entry order without a separate application to the surface rights board.
16. The landowner is in a stronger negotiating position by insisting on a Right-of-Entry Order rather than a form agreement.  It takes away the threat that land agents have used in the past that if the landowner does not agree with their proposal the company will “go to arbitration.” If it is the landowner who is asking to “go to arbitration,” the land agent no longer has any such threat.