Irish land is valuable. The reasons why are multitudinous, but include the compact size of this peaceful, blessed island, the warmth of her people and the exorbitant property prices she commands. Because what’s valuable is covetable, all Irish land is covetable. But some land is more covetable than others.
This is apparent now in ways that were not before. Towns and villages — some in the remotest parts of the country — are being visited by solar company representatives. For the most part, they’re scouting, then approaching farmers and other landowners to see if they can make a deal whereby their land can be used for the production of solar energy production.
Because land matters so much, and deals once done can be lasting, it’s vital for farmers and other landowners to get expert legal advice when contemplating dealing with developers, who will after all, have teams of lawyers guiding and overseeing their every move.
Having copious experience in this area, Ray Fitzpatrick, a partner at Augustus Cullen Law solicitors, is well versed on the legalities of renewable energy land deals.
“We act for a number of developers, and separately, we also act for landowners in renewable matters,” he says. “When acting for developers, we are involved primarily in putting in place, on their behalf, their legal agreements with individual landowners. This is done via the landowner’s solicitors.
“These involve option agreements for lease and leases, option agreements for the purchase of lands (for the construction of substations) and the putting in place of easements with landowners, for access, and for the cables required for development projects. These cover wind turbine developments, battery storage and solar farms.”
On the landowner side, Fitzpatrick and his team act for landowners where they have been approached by the developer.
“These are obviously in projects where we are not acting for the developer, otherwise a conflict would arise,” he says. “We review the agreements, which are those agreements referred to above, and we seek to negotiate anything that we feel needs to be amended or is overly onerous.”
Elucidating on the nature of the sort of Option Agreement that might arise in this type of work, he says: “This provides the developer with an option to take a lease at agreed terms for a particular period — normally for five or seven years, with a right to extend. In exchange for this, the landowner is paid an option fee.”
Clarifying that the lease period can be higher than this, Fitzpatrick says he has seen some agreements that are for a 10-year period, then continues: “The option will set out and define the lands that the developer feels have potential for renewable development. This will be defined and outlined in reference to a map/title. The option gives the right to exercise the lease-which is typically a 30-year lease — often with a right to extend for the developer, in exchange for a rent and subject to various terms and conditions.
“Included in these are the right for the developer to lease the necessary lands, access those lands, install roads, lay cables, and call for the right for the system operator to be granted access and given cable easements. Also included are obligations to reinstate the lands, typically to a depth of 1 metre. While the option gives the right to call for the lease to apply to all lands set out and defined, the developer is entitled to carve out of the optioned lands, the portion that they require.”
As planning permission must also be considered, Fitzpatrick explains that because the developer must arrange for this, it may become apparent that planning will not be forthcoming over the entire area, or that it may be refused.
“Therefore,” he says, “the flexibility is there to take less land.” Asked about the advantages for farmers and other landowners of making deals with renewable energy developers, he replies: “The sums involved for rentals, purchase prices and once off payments are in my view, very favourable.
“However, the landowner should consider the future intentions of the property. It is extremely important to have a proper understanding of the Option Agreement because of the implications of tying up the lands and restricting rights/activities. Some Option Agreements that I have seen prevent the transfer of lands without consent, and place restrictive covenants on activity on the landowners’ other lands. It is vital that they take advice. If they have children that will need sites in the future to build homes, it is essential that those sites with development potential in that regard are carved out prior to the Option Agreement. There is also the advantage that sheep can continue to graze the lands around the solar panels.”
Fitzpatrick cautions that from a developer’s perspective, it is essential that comprehensive agreements are put in place to cover all necessary development/lands, and that they are not left in a scenario where they are trying to develop or fund a project, only to realise that their agreements are flawed.