It is generally accepted by the public at large that we all have an obligation to reduce carbon emissions to protect the planet and our way of life.
The Irish Government have given binding commitments in this regard and this has resulted in the publication of climate action plans and policies to meet their targets.
One major policy area that is being pursued relates to the prevalence of applications for renewable energy projects.
We at Tormeys have significant first-hand knowledge of the implications for land owners whose property may be subject to or impacted by these projects, more specifically wind and solar energy.
We have acted for many individuals and groups who have been approached by energy companies and we have worked tirelessly to ensure that we secure the best possible deal for our clients and fully protect their interests.
There is a degree of complexity involved in the documentation furnished at the outset of a proposed renewable energy project. Ultimately, the energy company wants to use a land owner’s property to facilitate the construction and maintenance of equipment and ongoing use of the lands to produce energy.
At the outset, the energy company will look to secure an option to enter into a long term lease with the land owner, which will give the energy company the time and space to secure planning permission and a grid connection to the electricity network.
This period would also give the energy company the opportunity to negotiate with other land owners, outside the immediate project area, for the right to place cables, ducts, and wires to gain a physical connection between the project and the nearest sub-station.
It is our job to make sure that our clients are fully aware of the contractual obligations prior to them committing to signing the option. The option and lease agreements will cover a multitude of issues relating to the rights and covenants affecting both the energy company and the land owner.
Each energy company and project will have different conditions and criteria and it is our duty to outline to our clients, in the clearest possible terms, what the legal and practical implications are for the land owner, not only during the option period, but the proposed lease period, in the event that the project gets the green light.
Some of the main issues of importance that need to be clarified and, indeed, negotiated on, include the following:
- Option fee payment.
- Rent payable under the terms of the lease.
- Rights of way secured over the project lands and adjoining lands.
- Security fencing.
- Restrictions on agricultural activity on your property during the lease term.
- Insurance and indemnities.
- Maintenance of hedgerows, ditches and drains.
- Impact of the project on your agricultural activities, including single farm payment implications.
- Capital gains tax, inheritance tax and income tax implications for the project.
- Curtailments on the development of your property during the option and lease terms.
- Consents from third parties (e.g. Banks or Building Societies).
- Restoration funds.
- Insurances and indemnities.
- Implications on forestry grants and entitlements.
- Community funds.
- Length of option term.
We have found that representing all of the land owners involved in a specific project leads to significant efficiencies in progressing the transactions. We can communicate with the legal representatives of the energy company in a manner that allows the land owners to act in a unified and coordinated manner.
At the outset of a project, there are often title issues which the land owners have to rectify, and we can look after this in a quick and speedy manner to avoid any chance of the land owner losing out on the prospect of agreeing a deal with the energy company.
In relation to the costs involved in finalising the legal documents for the project, in our experience, the energy company will generally cover the land owner’s legal costs. On occasion, they would agree to make a contribution in relation to any title upgrades that are required to the land owner’s property.
When the owner is approached by a representative of an energy company, the details of the scheme can be a little daunting and we take great pride in our ability to clarify, in a concise and easy to understand manner, all of the legal implications of the proposed arrangement.
If you have been approached by an energy company, please do not hesitate to contact us for guidance. We would welcome the opportunity to give you the benefit of our knowledge and experience in this area. We cannot overstate the importance of getting the right advice.
Tormeys Solicitors LLP, Castle Street, Athlone, Co Westmeath, N37 D960. Tel: 090 649 3456