Ask a solicitor: What is an 'Option for Right of Way?'
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Dear Reader,
The prospect of additional income, of course, is always welcome, but it is very important before entering into any legal agreement that expert independent legal advice is obtained.
The solar developer is essentially looking for an Option for a Right of Way from you. An Option for Right of Way is an agreement that gives the solar developer an option to take a right of way over your land for an agreed period for payment of a certain sum, and the Right of Way and the terms and conditions of the Right of Way are agreed at the time of signing the Option Agreement.
Generally, the payment terms in respect of the Option for Right of Way are small, as you can essentially use your land during the term of the Option, and you are not restricted in your use of the land i.e. that you can continue farming the land.
During the Option, while you can continue to use your land during the term, you must allow the developer to apply for Planning Permission and, if necessary, to carry out tests on the land. These might include archaeological studies, ecological studies, for example, that would be required to accompany a planning application.
The term of the right of way can range from a period of 25 years up to 40 years. Sometimes, in the agreement, there is an automatic right for the developer to renew the Wayleave. This should be removed from the agreement.
If you have a mortgage over your lands, your bank’s consent will also need to be obtained. If you are currently in a long-term lease, then a copy of this lease will need to be given to the solar developer and, if the developer wishes to exercise the Option, they might have to wait until the lease has expired or they might have to negotiate with the tenant to see if the tenant will vacate part of the property early.
Payment varies considerably. Some landowners can get paid per meter and can get an annual payment and some landowners will receive a payment on the construction of the roadway and the finalisation of construction of the roadway. Some landowners will also see a payment on foot of the grant of a successful Planning application.
It is important that any payments would be index linked from the date of the Option Agreement to adjust for inflation.
It is critical that the developer would have public liability and employer’s liability in place and evidence of this would be produced to you every year, and that they would indemnify you in respect of any accidents, claims, damages, etc., arising out of their use of your land.
This is just a general overview, and the agreements need to be examined in detail. There will be clauses in the agreement that they would have the right to maintain and repair the road by giving you reasonable notice, but, in the case of emergencies, no notice would be required.
It is important that you also obtain tax advice before signing the agreement.
The main thing is to seek independent tax and legal advice as the devil is in the detail, but they can be very attractive options, especially if you are coming near retirement and you have nobody to take over the family farm or you would like to have an additional income stream.
Email: info@walshandpartners.ie
- While every effort is taken to ensure the accuracy of the information contained in this article, Karen Walsh does not accept responsibility for errors or omissions howsoever arising. Readers should seek legal advice in relation to their particular circumstances at the earliest opportunity.
