Renegotiating a Wind Farm Extension: Do’s and Don’ts

If you’re wondering what to do when you’re renegotiating a wind farm extension, we’ve got you covered. Simply follow our list of do’s and don’ts to successfully reach an agreement with your site operator – seamlessly.

So, you’re facing a new chapter with your wind farm and it’s time to renegotiate your terms. Congratulations. But if you’re struggling to know what to do when renegotiating a wind farm extension, then settle in. As it’s probably around 30 years since you last signed a lease, there will be a few new things that you’ll need to consider.

And as you’ll have a 6-year statute of limitation as a landowner, you don’t want to waive any of the rights that you’re entitled to.

If you’re flying blind and want to know how to make the most of the renegotiation process, just keep reading.  Not only will we equip you with the vital knowledge you’ll need to prove any miscalculations, but you’ll stay ahead of the game on timescales. And who doesn’t want to reduce their stress during the renegotiation process?

Renegotiating a Wind Farm Extension: Do’s

Document your negotiations

When the time comes to negotiate a new lease, we always encourage landowners to carefully document everything. From basic discussions to key terms, keeping detailed meeting notes of what’s considered and agreed upon will only benefit you.

There are instances where solicitors have made errors in the lease wording, which can result in landowners receiving less rent than expected. As issues like these can go unnoticed for years, it’s worth noting down discussed figures before signing a new lease. This way, you can easily check back on your notes if you need to dispute payment arrangements down the line.

Correcting and identifying errors like these can be drawn out and quite painstaking and we typically see an error rate of up to 85% So, having notes of all past correspondence can seriously work in your favour if you need to prove that errors occurred during the process.

Check your terms carefully

It’s crucial to have a clear idea of the terms of your original lease before diving into a wind farm extension renegotiation. For example, did you have inflationary terms built into your original lease? Are you happy with your payment arrangement and rent type? Do you have enough time to engage with professionals before your lease ends?

Whether you’re an independent or institutional landowner, you must understand the terms of your agreement.

Another important thing to consider is whether your tenant has an immediate right to renew. This shouldn’t be an issue if you’ve opted out of sections 24-28 of the Landlord and Tenant Act 1954. But if you haven’t, your tenants will have far more rights than you’ll want them to have as they’ll have security of tenure.

If you want to retain control over your site, you need to make sure you’ve opted out.  If not, there are formalities that you’ll need to strictly follow.

Carry out a land rent audit

If your existing lease is coming to an end, it’s always worth carrying out an extensive land audit. Not only does it check that payments have been correctly made, but it ensures that everything is up to date before a new lease begins.

Without a land audit, landowners could inadvertently waive their right to past compensation or income within a new lease. As you can see, it’s quite important! To make sure you’re catching every detail, it’s crucial to work with an independent and knowledgeable expert. They’ll be able to reveal things about your site that you may not have considered, putting you in a strong position for renegotiations.

Psst: If you need any help with your land audit, simply get in touch with the team at Lumify! Our SiteView360™ service gives you a complete historical review of your payments to ensure everything is accurate and up to date. Plus, we’ll aim to arm you with all the tools you need for renegotiating. 

Know your obligations under a lease

As well as a comprehensive land rent audit, landowners should be mindful that any existing rights are not extinguished when entering into the new lease, such as outstanding rents that have not yet been identified. Equally, they should be aware of previous entitlements they’ll lose with a wind farm extension.

A thorough audit of the old tenancy agreements lets you contextualise the present and gives you a good overview of the history of the site.

So, make sure you do the following before signing on:

• Look through your previous contract
• Check for any contractual obligations or breaches that may waive entitlements to you
• Understand the terms of your previous contract and carry over what may benefit you

Work with a team of experts

There are several experts that you’ll want to consult as an independent or institutional landowner. Although you can technically approach a wind farm extension renegotiation solo, experts will have superior market knowledge.

Legal teams review documents and serve relevant notices, which is always helpful.  But it’s land agents and accountants who will ensure you have the necessary planning permission and that your project is financially viable. So, you won’t be going to the negotiating table blind.

And if you want to take the project in-house, these experts can help you navigate that move too. Plus, you can even hire external consultants and teams to assess current market rents and give you a decent lay of the land. Not only will this give you serious ammo for negotiating increased rents, but you’ll feel confident that you have all the information you need.

If you’re interested in assessing your site’s rent, income, or anything else, get in touch with Lumify. Our SiteScan™ service and Lumigraph™ tool compare your site to others across the country, giving you next-level visibility for your contract negotiations. Plus, there’s never any confusing jargon.

Compare the rents at hundreds of wind farms across the UK.

Access the best contractual terms written by the UK’s top solicitors to attain your ideal lease

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Renegotiating a Wind Farm Extension: Don’ts

Lose track of time

If we’re to give you a single piece of advice for your wind farm extension, it’s that you shouldn’t lose track of time! Time is the most precious asset you have on your side for renegotiations, and many processes can take upward of a year to complete.

There are a few important reasons to focus on good timekeeping during the end of a lease:

• It gives you enough time to correct any errors identified in the lease.
• It gives solicitors and legal teams time to serve relevant notices.
• It gives land agents time to apply for planning permission if it’s required.
• If leases expire during renegotiations, it can often cause “bad blood” and a tenant seeking a protected business tenancy.

If you remember the importance of time and frequently check in with your site operator, you can save yourself a serious headache. There are a few crucial steps that you should take when your lease is ending – so don’t miss a thing.

Be unsure about who’s signing the new lease

It may sound obvious, but you’ll want to be well aware of who’s signing a new lease when you’re renegotiating a wind farm extension.

Landowners should always know whether a new company has the financial resources and assets to fulfil its obligations. Otherwise, landowners may be stuck footing the bill down the line.

As your site operator is critical to the success of any wind farm extension, you’ll want to carefully look at who they are. Ask any questions that you feel are necessary and check things through with a legal team before proceeding. Oh, and make sure everyone’s on the same page of course.

Knowing what your new (or existing) site operator is all about is crucial for getting a mutually beneficial outcome. So don’t be afraid to really do your research.

Fail to negotiate financial terms

As your land will continue to be affected by a wind farm extension, you must be adequately compensated.

While you might have set aside space to continue farming, you’ll want to make sure that you have clear financial terms to support yourself. It’s always a good idea to set up a payment arrangement that makes you feel comfortable as a starting point. Whether that’s an annual minimum fixed rent or rent based on the performance of the project, you can weather any fluctuations more easily.

It’s also worth considering the cash you’ll need to put aside to pay any experts during the renegotiation process. Although the right team is worth its weight in gold, you’ll need to budget for them in the lead-up to your lease ending.

Oh, and don’t forget to clearly spell out the obligations of your site operator BEFORE signing a new lease.

The takeaway

If you follow these simple dos and don’ts, there’s no reason to panic when your lease comes to an end. By having all of this knowledge in your arsenal, you can renegotiate with your existing tenant or find someone more suitable. Starting early allows you to counter any issues without worrying, putting you in a much stronger position at the negotiating table.

And what could be better than that? If you need any help with your lease or want to get an overview of current market conditions, get in touch with the team at Lumify. We’ll be more than happy to guide you through the process and help you achieve the best result possible.