Q: My business partner and I are looking to purchase some agricultural land with a view to constructing a small wind farm. Can you outline any potential pitfalls we may encounter?
A: Firstly, depending on location, you could encounter objections about noise, which may constitute an actionable nuisance. There may also be issues regarding agricultural tenancies, rights of way and wayleaves to accommodate cable-laying. Planning permission applications also can often be drawn out and costly, as is the process of applying for a grid connection.
Additionally there could be objections about the interference of mineral rights, though since October 13th last year it has become more difficult for people to claim ownership of such rights unless they registered an interest with the Land Registry prior to that date.
Agricultural tenancies are a big potential problem as before a wind farm lease or easements are granted you may need to obtain agreement from the tenant to terminate the tenancy to provide vacant possession of the land - and this could be very costly.
If the tenancy is a farm business tenancy under the Agricultural Tenancies Act 1995, a conditional contract requiring the tenant to agree to surrender the tenancy if planning permission is obtained to develop the land is both valid and enforceable. However, if the tenancy is an agricultural holding under the Agricultural Holdings Act 1986 the legislation is designed to protect the tenant and provisions contained within an agreement to surrender a tenancy have been known to be voided on grounds of public policy.
Wind farms are not cheap and the turbines themselves have long lead times. If you require finance the lender will want the entire legal package to be fully in order, so you should obtain specialist legal advice as early as possible and certainly before you enter into any form of agreement, taking into account related planning and environmental law issues.
24/02/2014
