Best Experts For Independent Landowners to Contact

Independent landowners can often find renegotiating a lease for a wind farm extension stressful. So, you might be looking for expert advice that’ll help you achieve the best outcome possible. Read ahead for my suggestions on who to consult when your lease is coming to an end.

Are you ready to renew your current wind farm lease? Then it’s a good idea to seek professional advice before diving into the deep end.

As your contract will have been in place for up to 30 years, you may find that the competitive environment will have changed drastically since your last negotiation. And you probably won’t be negotiating terms with the same advisers you dealt with the first time around.

If you want to approach renewal decisions with your eyes wide open, I can help. Not only will I cover the experts to contact before your lease ends, but I’ll spur you to act now. Because letting your lease expire without a formal agreement instantly puts you on the back foot.

Three Experts That Independent Landowners Should Speak to For Their Wind Farm Extension

When your lease is ending, you’ll want to approach the renegotiation process with all the tools you need for success.

Although you can do plenty of research on your own, it’s always worth consulting professionals. Not only can they access accurate, industry-specific data, but they can also guide your decision-making throughout the renegotiation process.

And that’s certainly worth the investment.

If you’re an independent landowner, these are the three experts you’ll want to consult during renegotiations.

P.S.: if you’re an institutional landowner, you’ll find all the information you’ll need about teams and renewals right here.

Take a look at the video below where I discuss working with professional advisers.

A solicitor

Solicitors should be informed about your lease ending a few months in advance of the wind farm extension process.

They should serve a notice to your tenant that lets them know their lease is up for renewal or that you have decided not to renew.

There are deadlines involved with both options.

Having a solicitor ensures that you keep on top of legal deadlines before your lease expires.

Solicitors can also review and draft a new lease, which should take into account any new regulations.

All parties involved in the renegotiation process should agree to the key terms and definitions of a lease.

The solicitor can handle all of this for you, freeing you from a tricky legal process that’s difficult to navigate.

Let your solicitor know as soon as possible whether you’ve opted out of the Landlord and Tenant Act 1954, as this changes your options considerably.

If you’ve opted out (which is always the right call), you can choose to end the current contract, bring the project in-house or carry on as-is.

A solicitor can also help your site operator by registering key documents and providing site plans that are land registry compliant.

A land agent

When you’re dealing with wind farm extensions, the next expert you should consult is a land agent.

Any project with wind turbines over 100 feet high will have been through a stringent planning permission process. So having these documents in place is crucial for successful negotiations.

Not only can land agents apply for necessary permissions, but they’ll make sure everything is completed within deadlines. With their expert eye, land agents can agree on terms with site operators (including up-to-date market rents) and create timetables for extensions and decommissioning.

They should know what landowners are being paid across the country for similar sites and will be able to discuss suitable payment arrangements.

Land agents can also help with practical steps,whether that’s figuring out if rents should be linked to the CPI or reviewing your rent. It’s worth noting that the onus is still on you to restore the site under appropriate planning conditions. So it’s important to make sure that your site operator has the funds ring-fenced to cover the decommissioning. Otherwise, you will be footing the bill.

For even more detailed information about your site (that can speed things along with land agents), explore our Lumify SiteScan™ options. They offer comprehensive market data that helps you benchmark a site’s value accurately.

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An accountant

The final expert to consider meeting when extending your wind farm project is an accountant, one of the most underused assets, in my experience.

Accountants will review your project’s land rents by undertaking a full payment audit, allowing them to see if the correct payments have been made in preparation for a lease renewal.

An accountant can then review how much energy has been generated month-on-month to ensure that the correct rent has been paid.

Accountants can be helpful with a wind farm extension, as they can determine the financial viability of a project. Not only can they review your existing financial data, but they can vet new tenants to see if they’re financially secure.

Overall, they can greatly assist with your financial planning and any tax implications that would arise with a new lease.

Once you approach an accountant to assist with renegotiations, they should set the following steps in motion:

• Obtain the power purchase agreement from the site operator
• Review all electricity generated based on the half-hourly electricity data
• Re-calculate each income stream payable under the terms of the power purchase agreement
• Reconcile the total amount payable to the amount received from the site operator
• Reconcile these payments to the amounts due according to the terms of the lease agreement
• Reconcile the amounts to historical rent statements, bank payments received and the payments recorded in the site operator’s company accounts
• Calculate the rent payable for each month divided by the total amount of electricity generated during that month
• Compare this to the monthly rent payable for the previous years to identify any significant or unusual payments for further investigation

And that’s just if you’re planning to stay with a site operator

If you’d like to bring the project in-house, your accountant can do a cost-benefit analysis to see if it’s commercially viable. They usually do this by checking your financial resources and whether you have the right to terminate the tenancy.

The Takeaway

It can be tempting to use your years of experience to negotiate a deal. But having up-to-date expertise is never a bad idea. With a professional advisory team on hand to help, you can ensure a smooth transition to a new lease.

Although I’m currently seeing an error rate of approximately 85 per cent, this isn’t typically the fault of your advisors. More often than not, the data available to accurately check and keep on top of things isn’t easy to access.

You’ll still be leagues ahead if you engage with professional services to give you peace of mind. If you’re not sure how to approach a wind farm extension, get in touch with the team at Lumify Energy. We can work with your existing advisors (or as a standalone team) to help you achieve the results you’re after.