Wind Farms – how should landowners protect themselves?
At Ezra Legal we have a large number of farming clients who may now, or in the the not-too-distant future, be impacted by the ongoing growth of wind turbines in regional South Australia. Wind farms are now an increasingly important part of the electricity network, but how does it work for those on whose land a wind turbine is located?
An important first issue is wind farm operators do not have any power to acquire a person’s land to operate wind turbines. They must either buy the land or – more commonly – lease the land from the land owner on mutually-agreeable commercial terms.
It almost goes without saying the wind farm operator will try to reach an agreement on terms that are as favourable to it as possible. Where a lease is being entered into between a wind farm operator and a landowner, it is vitally important professional advice is obtained, as wind farm agreements are generally long term commitments, often in the order of 25 to 30 years. Given the length of this arrangement, it is very important landowners know what they are signing up for.
There are a range of matters that need to be dealt with in an agreement to ensure a landowners rights are protected and they haven’t been overlooked during the initial period when the turbine is built and the subsequent period when it is operating. As a starting point, a landowner will need to understand while they will continue to be the owner of the land, there will likely be restrictions on how they can use the land – for example, not only will the plot of land where the wind turbine is placed be unable to be used, but the wind farm operator may seek to have restrictions on the types of activities that can be carried out on the rest of the land.
It is important for a landowner to review all the detail of any agreement to understand precisely how the rest of the property can be used. This lease arrangement may also have implications when it comes to selling the land or mortgaging the land as usually the wind farm operator will register the lease or place a caveat on the title of the property to protect its interests.
It will usually be necessary to obtain the consent of the bank before proceeding with a wind farm agreement and, if the property is sold in the future, it will require the new landowner to enter into a new, separate agreement. The details of the agreement are also important when it comes to the end of the term of the lease.
No landowner wants to be left with a large turbine taking up space on their land if they are not getting paid for it or, alternatively, wearing the cost for having the turbine removed. It will be important the agreement deals with removal of the wind turbine as well as anything else associated with the turbine, such as removing access tracks and making good any damage to the land.
It is also important consideration is given to what happens in the event the wind farm company encounters financial difficulties and can not meet its legal obligations, including if it is wound up.
There are a lot of matters that need to be considered by a landowner when entering into an agreement for a wind turbine. The issues will not be the same for everyone, but what is important is a landowner has considered all the issues and knows exactly what they are signing up for.
For more information and expert advice, ask to speak to Practice Principal Michael Fabbro at Ezra Legal on (08) 8231 6100 or email firstname.lastname@example.org
For information on the range of commercial legal services that we provide at Ezra Legal, head to:
- Services – Commercial Law – Ezra Legal
- Services – Farming, Fishing and Aquaculture
- Michael Fabbro – Practice Principal – Ezra Legal