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Firm news and client alerts that may be beneficial
Firm news and client alerts that may be beneficial
In the last several weeks, we have received and reviewed a flurry of solar leases and solar options to lease for numerous property owners. It appears that multiple solar companies are aggressively scouting and romancing property owners throughout the state with their promises to lease a few dozen acres and up to hundreds of acres of land with high rental rates per acre. The initial reaction is that this is a great opportunity for landowners to utilize their land and receive rental income that is significantly higher than agricultural market value rents particularly if the land is marginal farm land to begin with. However, BEWARE, because it is important to remember that the leasing documents that you are receiving were prepared by an attorney hired by the solar company so the documents tend to be prepared in a manner that is in the best interest of the solar company. The land owner’s interests are not necessarily aligned with the solar company’s interests!
The following items are typically missing from the solar company leases that we have been asked to review:
It is important to remember that just because the initial proposal might be for a 30 acre parcel, there is no guarantee, the way that the vast majority of these leases are written, that the solar company is going to lease the entire 30 acres. The solar company may only end up leasing a portion of the property and then, as a land owner, you could be left with two small fields with a solar farm in the middle. Depending on field access, one of those smaller fields may no longer be accessible if a solar project is constructed in the middle of the existing “large” field.
Property owners should be cautious and always seek legal advice to review the lease on your behalf when approached by a solar company to sign a lease before signing. Once signed by you, the lease becomes a binding obligation that will likely be difficult, if not nearly impossible (and expensive), to break. Please contact me or any member of our Agricultural Services Team if you would like us to review a solar lease that you received.
To view this article in PDF format, please click here [Solar Leases – Property Owners Beware].
Since 1979, the Syracuse-based law firm of SCOLARO FETTER GRIZANTI & McGOUGH, P.C. has provided sophisticated tax, business, litigation, employee benefits, estate and trust planning and administration services to its individual, business, entrepreneurial and professional clients throughout New York, Pennsylvania, Florida and other states in which its attorneys are admitted to practice.