This page explains what a land agreement is, the options available to the owners of the lands when they negotiate a land agreement, and what is usually covered in a land agreement.
The type of agreements a company uses depends on what the agreement is for and how long it is needed. This document only focuses on land agreements. Other types of agreements, such as a temporary workspace agreement or purchase agreement are not discussed.
Questions you may have
- What is a land agreement and why is one needed?
- How will you be notified about a land agreement?
- What is typically in the notice served by the company about lands it requires?
- What are option agreements and how do they relate to land agreements?
- How do you negotiate a land agreement?
- What does the CER expect to be included in a land agreement?
- How do you document damages?
- How long will a company typically need to use your land?
- What if you do not sign the agreement?
- Do you need a lawyer?
- What if there is an emergency?
What is a land agreement and why is one needed?
A land agreement gives a company the right to use land to construct, operate, and maintain a project, such as a pipeline or a power line. Companies work with the owners of the land to negotiate these rights. The results of these negotiations are included in a document called a land agreement, which is signed by both the company and the owner of the lands.
How will you be notified about a land agreement?
The Canadian Energy Regulator Act (CER Act) has legal requirements about how you must be notified that your land may be required.
You will receive a notice from the company about the land agreement it would like to negotiate with you. The company may have land professionals on staff or contract the services of land professionals. Land professionals help establish the relationship with owners of lands and perform the steps in the land agreement process. Interactions between owners of lands and companies, including their representatives, should be conducted with respect, transparency, and integrity.
The CER Act requires a company to provide a written notice to all owners of the lands needed for the construction of a project. This notice may be provided before a project application is filed with the CER.
What is typically in the notice served by the company about lands it requires?
- A description of the lands: A description of the lands required by the company. A drawing or sketch of the lands is usually included, along with a short description of the project.
- Compensation: Details of the compensation offered for the lands required. This may include options for payment of the proposed compensation, such as lump sum or periodic payments.
- A description of land value: A statement of the value of the lands required.
- A description of the detailed route process: A notice must describe the CER’s process for assessing and approving the detailed route of the project. The detailed route is the exact location of the project on the land, and the process also considers the methods and timing of construction. Not all projects require a detailed route process. Find more information about the detailed route assessment process on our website.
- A description of the compensation dispute process: Companies must give information about what steps to take if the owner of the lands and the company are unable to agree on compensation. See the CER website, www.cer-rec.gc.ca, for more information about land use compensation disputes.
What are option agreements and how do they relate to land agreements?
Because the company plans the general route before it files its application with the CER, the company may begin to negotiate with you at any time, even though you may not be affected when the final route is determined. This is called an option agreement. This agreement gives the company the assurance that it can obtain the land rights it needs if the project goes ahead. When you sign an option agreement, you are promising the company that you will sign a land agreement within a specified period of time.
If the specified period of time passes and the company has not exercised the option, the option agreement is no longer valid. However, if the company exercises the option within the time specified, the terms of the option agreement come into effect. This means that the company is granted a right-of-way agreement automatically, according to the terms you and the company agreed to in the option agreement.
An option agreement is a legal contract. It contains certain required sections or clauses that cover various rights, but you can also negotiate other terms to meet your particular needs. Before you sign this agreement, it is important to read and understand all of the terms and conditions carefully, or have a lawyer review it for you.
How do you negotiate a land agreement?
A land agent may be the first person you encounter during the consultation and negotiation process. The land agent will give you specific information about the project and seek input from you on the project and potential effects. This contact is an early and important opportunity for you to share details about your land and how the project could affect you and the use of your lands. Open communication and information-sharing by all parties throughout the life of the project is very important for building a positive relationship.
Take the time you need to review the entire agreement and be certain that you fully understand the details before signing (see below: do you need a lawyer). Land acquisition agreements can be enforced by the provincial court in the province where the lands are located.
If you have concerns about the project, express them to the company as soon as you are given information about the project. More time can then be devoted to addressing issues while the company is designing and planning its project.
Most land agreements result from successful negotiations. The CER encourages all parties to work together to negotiate an agreement. The CER also provides alternative dispute resolution (ADR), which is available at any stage during the life of a project. Email ADR-RED@cer-rec.gc.ca or visit our website for more information about ADR.
What does the CER expect to be included in a land agreement?
The content of a land agreement is negotiated between the parties. However, under Section 321 of the CER Act, a company must not acquire or lease lands for a pipeline unless the agreement includes, among other things:
- Compensation for the acquisition or lease of lands and payment options: Companies must provide details of the compensation offered for the lands required. This will include identifying which option the owner of the lands chose for payment (lump sum or periodic payments). Periodic payments are subject to review every 5 years. Periodic payments can be of equal or different amounts over a specified period of time.
- Compensation for damages caused by the company: A company is responsible for damages caused by its activities. You should document any damages (see below).
- Indemnification of liability: Indemnification from all liabilities, damages, claims, suits and actions resulting from the company’s operations, pipelines, or abandoned pipelines, other than those resulting from gross negligence or willful misconduct of the owner of lands and, in Quebec, the gross or intentional fault of the owner of the lands.
How do you document damages?
- Identify the company or contractor that caused the damage.
- Explain the damage done in writing, through photos, or both.
- Describe the location of the damage.
- Describe the duration and effect of the damage.
- Describe what the owner of the lands expected would happen (for example, the fence would be repaired, or reseeding would be done with a certain type of seed mix).
- Provide any supporting information, such as a quote from a local repair company.
- Send your documented information to the company, including your contact details and preferred method of contact, and keep a copy for your records.
How long will a company typically need to use your land?
After the company registers the land agreement on the title for the lands, it remains in effect even after the property is sold or developed.
What if you do not sign the agreement?
If there is neither a land agreement nor a land purchase, the company can apply to the CER for a right-of-entry order. For more information on right-of-entry orders, see our website.
Do you need a lawyer?
It is your choice if you wish to have a lawyer or anyone else review your documents. You may negotiate with the company to receive reasonable costs for having the agreement reviewed by your lawyer. However, there is no legal right under the CER Act that entitles you to have these costs covered.
What if there is an emergency?
Your lands will be accessed if they are needed to respond to and manage an emergency. Companies must compensate the owner of the lands for any damage that may happen as a result.
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