FCo Rural Estates Newsletter Spring 2022 - Flipbook - Page 5
Secondly, if the development is to be built out, how quickly can you get the land back?
Farm business tenancy tenants will usually need at least 12 months’ notice. Agricultural
Holdings Act tenants may have short notice provisions in their tenancies (and Case B may
theoretically apply) but we all know the difficulties involved if tenants are reluctant to give
up possession. The reality is that many tenants in this situation will need to be bought out.
Every situation will be different, but early attention to this issue is key. Most developers can
be persuaded to pay the money required to secure vacant possession, but this requires
careful negotiation and expectation management.
The impact on your land
How will the development affect your retained land? A solar development will sit within
a red line of a lease boundary, but remember the developers require a much wider
‘cordon sanitaire’ around the site in which development and planting are prohibited. The
easement corridor for the main cable will be subject to similar restrictions. Landowners
need to negotiate hard to limit these impacts on the surrounding estate. Solar farms may
require modification of rights of way, screening, environmental offset or the location of
a substation on your land – the extent to which you will have control over this (and be
rewarded for this use of your land) is a very important negotiation point.
You must also think of the future. The economic life of a solar development will end one
day. It is essential therefore that the lease contains restoration obligations and provision
for a restoration bond or other security. This is fundamental to ensuring that a landowner
is not left with the restoration (and potentially environmental) liability when the site stops
operating. This is particularly important as it would be very unusual for the final operator
of the development to be the same party who signed the option agreement. Good
relationships at the outset will be irrelevant when you seek to enforce the restoration
obligations against the party ultimately obliged to decommission the site 25 years later.
Get specialist advice
Solar farm leases are granted typically for 25-35 years and so for most landowners, these
developments are a once in a generation undertaking, with huge potential impact on an
estate. They are not to be undertaken lightly and require specialist advice to secure market
rents and ensure the landowner’s interests are safeguarded.
We deal with a number of specialist renewables agents and we cannot emphasise enough
the importance of quality advice - they will weed out the bad operators who might offer a
larger financial incentive but do not have the capacity to progress the development. They
will also ensure that robust heads of terms are agreed, which reflect the market trends and
which will make negotiating the documents immeasurably easier. Solar developers should
ultimately foot the bill for an estate’s professional costs, but they push hard for low costs
contributions, and thus fetter the ability of landowners properly to protect their interests.
With so much at stake for an estate you should insist they pay for the quality advice you need.
Rural Estates Newsletter
Spring 2022
5