Should you seek a clause entitling you to an Auditor’s Certificate to vouch the operating expenses?
Consideration should be given to seeking a payment at certain milestones, for example when full planning permission is granted.
If a new, more efficient turbine is erected on your lands, should a further payment be made?
A common fear for farmers is that when the lease comes to an end, they will be stuck with large machines on their land, and they are costly to remove.
Your lease should provide for the removal of the windfarm structures and roads at the end of the term.
The restoration of land is expensive.
Seek a bond to be put in place as coverage, should the developer fail, or cannot afford to clean up the area or reinstate the land once the lease expires.
What if the company goes insolvent?
If there is no bond in place, and the windfarm development company goes bust, you are stuck with removing the turbines, etc, yourself and you are prevented from suing the windfarm development company, as that company is no longer in existence.
Many wind farm agreements contain a clause that the developer can assign the benefit of the agreement to a third party.
This should not be done without your consent, and you could also seek an additional payment in that event. Notice should be served upon you in writing and within an agreed time period.
Most leases will have a voluntary termination clause in favour of the developer, on receipt of written notice. Should this be coupled by a payment? It is up to you to negotiate.
Ensure that the developer retains no rights whatsoever once the agreement has terminated.
An option for the developer to extend the term is not unusual — but a developer should have to re-negotiate rent again. Is it really essential for the developer to have an option to extend the lease? These are questions you need to ask yourself.
The developer should discharge your legal and engineering expenses in full. You should not be put out of pocket.
Communications between landowners and local communities by wind developers have been haphazard, and in some cases completely non-existent. Confidentiality agreements that are signed do not help. It is a good idea to form a group, so that you and your neighbouring landowners can negotiate terms collectively. If everyone agrees not to sign a confidentiality clause, you will strengthen your bargaining power and preserve relations with your neighbours.
A windfarm turbine or turbines on your land should be treated as an alternative enterprise, which will improve your quality of life and the income on your farm. You and your neighbours should pool your resources to get the best possible agricultural accountancy and legal advice to ensure a good return on such a new enterprise in the years to come.
Seek advice from someone with experience in advising farmers in relation to these matters, preferably someone who knows about the wind electricity business and the agricultural business.
A united approach will always achieve better results in comparison to each individual farmer fighting his or her own battle.
Essentially, the agreement between you and a windfarm developer is about striking the right balance between your rights and what the windfarm developer company needs in order to proceed.
Farmers’ most valuable asset is their land, and often, the farm has been in the family for generations. Do not give a developer power over your most prized asset and livelihood.
Before you put any pen to paper, take your time, do your research and seek expert advice.
If you do not have the right agreement in place, a windfarm may not necessarily be a windfall for you!
Karen Walsh comes from a farming background at Grenagh, Co Cork, and is a solicitor practicing in Walsh & Partner Solicitors 17 South Mall, Cork.
While every care is taken to ensure the accuracy of information in this article, Karen Walsh does not accept responsibility for errors or omissions howsoever arising, and you should seek legal advice in relation to your particular circumstances at the earliest possible time.
See walshandpartners.ie/blog for more!
Go to www.windfarms.ie for advice when entering into a Windfarm agreement!