Acquiring an interest in a piece of land for development is not always a straight forward process, especially for developers. We often act for clients who have identified a site of interest, but who aren’t yet sure whether they will actually be able to use the land in the way that they want to.
There are a number of steps and investigations that may need to be carried out on any renewable energy project before the developer knows that they can progress with their plans. Some of these are the usual steps necessary for any commercial property acquisition (searches, checking planning consents and other restrictions on the use of the land) but in a large scale development project, there will also be a number of technical steps that need to be taken. These can be time consuming and complex, but without the information that they produce the developer cannot know whether they should proceed with their plans, or whether the land they are interested in will be wholly inappropriate and they should look for another site. The geotech survey, for example, investigates site conditions, looking at the properties of the soil and undertaking tests. The outcomes of this process then inform design and construction recommendations for the development of the project.
Renewable Energy Projects – What are the issues?
The prospective purchaser needs to have some security whilst their investigations are taking place, so that they know that they will be able to proceed with the site, after investing time and money in the survey where test outcomes are favourable. Equally, however, they do not want to be committed to the purchase of the site if it turns out that they will not be able to proceed with their plans.
From the land owner’s perspective, they want some recompense for taking the site off the market whilst the testing process is underway.
Renewable Energy Projects – What’s the solution?
The legal solution to this scenario is the lease option. The prospective purchaser is granted an option to take a lease at a later date. A fee is paid for the grant of the option which gives the landowner some comfort, and financial incentive, whilst the survey process is underway. Meanwhile the developer has the time and space to conduct the investigations they need to evaluate the site for their proposed plans.
Once this stage is complete, assuming the tests are favourable and the site is suitable, the developer then has the right to be granted a full lease of the site. If, however, the site is not suitable, the developer can walk away and seek a new opportunity, and the owner is free to take it back to market.
Adrian Beddow has extensive experience acting for both land owners and developers in the renewable energy field. If you wish to discuss your requirements please contact Adrian on firstname.lastname@example.org.