OFA warns landowners about renewable energy leases

Step One: GET A LAWYER

October 30, 3024

The Ontario Federation of Agriculture has released a fact sheet on renewable energy installations, including Battery Energy Storage Systems or BESS.

While the OFA takes no position on whether farm owners should get involved with leases for wind turbines for example, the list of cautions and suggestions is really interesting: these documents are not to be taken lightly and there could be conditions in them that are not beneficial to the landowner.

Step number one before signing, says the OFA, see a lawyer.

Step two, call your bank.

Other suggestions are clear indications that landowners need to be very cautious signing up for any type of renewable energy project.

For example:

Some leases have clauses that appropriate development rights for aggregates, ground water, topsoil, sale outside of the family, and even non-disclosure clauses that restrict your right to speak in public. Remove such clauses from the agreement.

Lease vs. Easement – If you decide to grant access, try negotiating a lease, avoid an easement or conversion to an easement; as easements are hard to impossible to discharge.

Specific Rights Only – Do not allow any clause that gives the facility company a Right of First Refusal or an option for any purpose other than the specific renewable energy activity. Such clauses can encumber your ability to sell the property to someone, estate and succession plans, and your ability to develop other activities.

Building Restrictions – Include a map of the property as an appendix to the agreement that outlines areas where farm activities are prohibited, and the minimum distance that a turbine, solar array, or BESS will be from any home, barn, or other structure on the property.

There are 34 suggestions in all in the Fact Sheet, which is an update of the OFA’s 2010 document.

Read the Fact Sheet here. Agreements for Renewable Energy Installations on Your Land – Ontario Federation of Agriculture

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