Wind farm leases carry risk: OFA - Federation advises caution, attention to detail
The Tillsonberg News|Monte Sonnenberg|November 2, 2005
At an open house in Fisherville, concerning wind farms, a representative of the Ontario Federation of Agriculture said farmers can easily sell themselves short or even lose their property if they enter into bad agreements for the use of their land.
At an open house in Fisherville, concerning wind farms, a representative of the Ontario Federation of Agriculture said farmers can easily sell themselves short or even lose their property if they enter into bad agreements for the use of their land.
Wind turbines have the power to turn farm fields into minefields.
At an open house in Fisherville, concerning wind farms, a
representative of the Ontario Federation of Agriculture said farmers
can easily sell themselves short or even lose their property if they
enter into bad agreements for the use of their land.
OFA energy specialist Ted Cowan warned rural property owners to
hold off until February before committing themselves and their land to
turbine companies. By then, Cowan said, Queen’s Park will have
devised a standard lease that protects land owners from all known
pitfalls while maximizing their return.
“Landlords have to get their own leases in place and be real
landlords,” Cowan told a crowd of 125 at the Lions Community Centre
i…
Wind turbines have the power to turn farm fields into minefields.
At an open house in Fisherville, concerning wind farms, a
representative of the Ontario Federation of Agriculture said farmers
can easily sell themselves short or even lose their property if they
enter into bad agreements for the use of their land.
OFA energy specialist Ted Cowan warned rural property owners to
hold off until February before committing themselves and their land to
turbine companies. By then, Cowan said, Queen’s Park will have
devised a standard lease that protects land owners from all known
pitfalls while maximizing their return.
“Landlords have to get their own leases in place and be real
landlords,” Cowan told a crowd of 125 at the Lions Community Centre
in Fisherville.
“Somehow the cart has got well ahead of the donkey here and the
donkey is going to have to smarten up. That donkey is every one of us
here.”
Wind farming emerged as a potentially lucrative sideline two years ago
when the McGuinty government made renewable sources of energy a
priority. Major wind farm projects are being developed along the Lake
Erie shoreline in Norfolk, Haldimand and Elgin counties.
Developers are encouraging farmers and rural property owners to
enter into long-term leases for the use of their land. But the OFA is
advising members that these deals are complicated and have great
potential to encumber farm operations.
Cowan cited two dozen subjects that should be explicitly covered in a
lease. Some involve putting costs back onto the developer that a
farmer might be asked to bear. These include legal fees, insurance,
property taxes and reduced property value.
Landowners are also encouraged to get detailed clauses regarding
turbine care and upkeep. For example, a farmer and his neighbours
may have to look at turbines plastered with advertising and logos
if this is not explicitly forbidden by contract.
Some unscrupulous companies also play shell games.
They may offer a land owner a five per cent commission on all power
generated, then sell the power for a nominal fee to a holding company
controlled by themselves. The land owner ends up with five per cent of very little.
This is legal, Cowan said, adding property owners must insist that power generated
on their land is sold at market value to theHydro One grid.
Property owners must also stipulate precisely how much land the lease
governs. This, Cowan said, should involve only the land in the
immediate area of a turbine. If that’s not done, the turbine operators
could encumber use and development across hundreds of acres.
The OFA also warns that municipalities will begin taxing turbines as
industrial properties 10 years from now.