Wind lease agreements should be look at closely

Electricity production by wind turbines is gaining in popularity and farmers are finding their land in increasing demand for turbine locations.
While leasing sites for wind turbines has potential to add income to a farm’s bottom line, there are a number of considerations farmers need to be aware of before signing on the dotted line.
The Ontario Federation of Agriculture has spent considerable time researching the various aspects of wind power leases. We know the prospect of earning income for the farm from wind power leases is an attraction, but our research has resulted in a number of red flags farmers need to consider.
  First and foremost, farmers should always seek legal advice. They are being asked to sign a long and unique landlord—tenant agreement that could have many pitfalls.
  Farmers should consider asking the wind power company to pay to have the agreement reviewed by a lawyer familiar with property rights. If the business won’t pay the costs of such a lawyer working for a group of farmers in the area, it may not be a good company for the farmer to deal with.
  Any agreement should have a clause that stipulates that the agreement cannot be transferred by the wind company to any person or company without approval from the farmer.
A reputable company might be expected to pay the farmer a fee for the privilege of transferring a lease. This should be spelled out in the agreement.
  Wind turbines, while they have an appeal for tourists, represent something the farmer, the family and neighbours could be looking at for years. Farmers exploring the idea of having a wind turbine on their property should consider a number of things that would ensure what they see daily won’t be objectionable.
They may want to consider a clause prohibiting any form of advertising on the tower, the colour of the tower and turbine blades, and a clause requiring the company to keep the painted finish in good condition.
A clause spelling out requirements for the termination of the agreement including a fund to cover costs of reclamation and restoration should provide needed protection of the farmer’s interests and rights.
  When farmers are contemplating signing agreements with wind power generating companies, they need to make it clear that any soil removed from the site during construction can’t be taken from the property. Because wind towers may have a reservoir of toxic lubricating oil in the generating compartment, farmers may want to consider a clause prohibiting the use of such oil on their land.
  Farmers entering into an agreement with a wind power company should consider adding a clause to the agreement covering liability insurance.
The power company should be expected to produce a certificate of valid insurance covering liability to the farm and others on an annual basis. Total liability coverage should be required for all damage caused by the wind tower.
  Wind power companies can be expected to require access to the tower for inspection and maintenance. Farmers signing an agreement should consider stipulating that access is during ordinary business hours and that weekend access is by permission only.
  The area of land covered by an agreement should be kept to a minimum size, and farmers need to consider limiting the agreement so it only applies to the actual lot leased. Any reference to adjoining lots should be avoided when the agreement is prepared, and only wind rights are part of the deal—all necessary considerations.
  OFA wants to ensure farmers achieve the best possible deal when signing a wind power agreement. Farmers need to proceed with caution and the best possible legal advice.
To review these considerations in more detail, look at the OFA website: www.ofa.on.ca

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