What is in this article?:
- Wind Wisdom | 5 Questions to Ask Before Signing a Wind-Energy Lease
- 2. How long will the lease tie up my land?
- 3. What are my obligations under the lease?
- 4. How will I be compensated?
- 5. What happens when the project ends?
- How to evaluate the wind-power developer
- Types of wind-power property agreements
- How a wind turbine could affect your farming operation
3. What are my obligations under the lease?
The lease will prohibit you from doing anything that obstructs the flow of wind over the surface of your property.
This includes restrictions on the height and location of structures such as barns, grain bins, cell towers, even houses and trees. In some cases, Ferrell says, the lease may prevent you from improving your property without permission from the wind company. “If you have improvements planned for the property, get approval for them” before you sign the lease, he says.
That goes for drainage upgrades, too, says Retherford, the Indiana farm manager. Wind farms often include underground power lines. “If you’re thinking of installing pattern tile in the next 10 years or so, do it before the turbines come.” After the project is built, you will need advance permission to maintain or repair tile, he adds.
You must also avoid damaging the wind-power structures. Vehicular accidents, fires or other mishaps can result in big losses, which may not be covered by your personal and farm-liability policies, Aakre says.
You will probably need to buy additional insurance to satisfy your indemnification obligations, Ferrell says. “This is especially important if you lease the property to hunters.” He adds: Increased insurance requirements for the landowner should be factored into compensation negotiations.
Likewise, the developer should indemnify you from damage claims arising from the tenant’s use of your land, Jambor-Delgado says.
Wind-power leases may also affect your obligations under other land agreements, she says. If the property has a mortgage, for example, you may need your lender’s consent to enter into a wind-company lease.
The lease should address the payment of debts secured by the land as well as placement of new liens on the property, she says.
Be wary of lease provisions that require you to personally obtain subordination agreements from your creditors, or that prevent you from using your land to secure future credit, Ferrell says.
A wind lease may also affect your eligibility for government farm programs, Jambor-Delgado says, so don’t sign a lease before checking with the appropriate agencies.