In commercial land agreements, seek advice to avoid undesired outcomes.
There are pitfalls which every farmer who has been contacted by a solar developer must watch out for.
In commercial agreements, to avoid any undesired outcomes concerning your land, you should seek the advices of a suitably qualified and experienced solicitor.
Your solicitor will guide you through the agreement process from beginning to end.
I would like to concentrate on three of the most unfair clauses I have seen in some solar agreements that landowners have been asked to sign.
Automatic right of renewal of the lease
Some leases contain clauses that give the developer the automatic right to renew the lease.
Some of the clauses allow for the terms and conditions to be renegotiated again between the developer and landowner, others provide that the renewal shall be on the exact terms and conditions as the current lease.
Remember that the term of the lease can be anything from between 25 to 35 years.
I hate to be morbid here, but you may not be around when this lease comes to an end. It may be your children dealing with this developer.
You are to a certain extent venturing into the unknown.
Unlike a neighbour renting your land to farm, you do not know the developer very well.
Will the relationship with the developer be a positive and mutually beneficial relationship?
Will the developer comply with the lease and be respectful towards you and your land?
I advise my clients that if the agreement is positive, and you are happy with it, then by all means renegotiate with the developer at the end of the term in relation to a new lease.
Rights extending to the use of land beyond what is reasonably expected for the operation of a solar farm should be examined closely and not agreed to unless clarified.
Reinstatement of land
Another important clause to look out for (or more importantly, to check that it is there) is that the developer will remove all equipment at the end of the lease.
The restoration of land is expensive, and you should not have to bear this cost, and be faced with this hassle, at the end of the term.
Access roads should be reinstated.
Some agreements contain clauses whereby the onus is placed on the landowner to notify the developer in writing that they require the access roads to be reinstated.
Watch out for this.
There are very strict time limits that you must comply with, to get the developer to reinstate access roads.
You may think you are covered when you have clauses in your agreement that confirm the land will be reinstated by the developer, but what happens if the developer goes bust?
Who takes down the equipment then?
It is critical that the developer agrees in the lease to have an insurance bond in place to look after you, in this event. Always ask for a copy of this insurance bond, every year throughout the term of the lease.
Right to assign to a third party
Lastly, there are almost always clauses in the option agreement and leases whereby the developer has power to assign the agreement to a third party.
I cannot stress the next point enough. Make sure you have the entitlement to be notified about the proposed assignment, and make sure your written consent is required before any such assignment takes place.
You would no longer be dealing with the current developer, and you are now faced with the prospect of a new developer taking his or her place.
Consequently, you are entitled to know who you will be dealing with it, their qualifications, experience, track record etc. and you are entitled to say no to the proposed assignee. Often, the devil you know is better than the devil you don’t know!
If administered correctly, a solar agreement can be a very good and fruitful land use. It does not fit in every situation, but depending on the farmer’s own circumstances, and location relative to the electricity grid, it may be a good option to look at with your land.
I have only touched on a few of the clauses to look out for, so it is important to obtain expert advice in advance of signing up.
© Irish Examiner Ltd. All rights reserved