Long Term Lease For Solar Park.

Our client approached us as they had received a letter from a developer stating that they would be interested in taking an Option Agreement to lease their land for a solar park. The proposed scheme is a transmission system, whereby the connection would feed electricity directly in to the UK’s transmission network.

Heads of Terms

The developer provided us with a draft set of Heads of Terms which included the headline points for the terms of the Option Agreement and the Lease Agreement.

Negotiation

We spent a long time negotiating the terms of both the Option and the Lease with the developer. Some of the key terms that we look in to deeply are the rent and rental basis and when the CPI linking commences. It is preferable that this starts from the signing of the Heads of Terms or the Option agreement. The rent agreed was £1,200 per acre and there was no BESS (battery storage) on this site.

We also look very carefully at the insurance obligations and the Decommissioning clause. There are various options available for decommissioning the site and we were careful to ensure that the client was fully covered should the developer go out of business, that there were appropriate funds available to the client to decommission the site at the end of the lease.

During this stage the developer also carried out non intrusive surveys on the client’s property under a licence agreement.

Solicitor Stage

Once we had reached a point of no further negotiation with the developer and we considered the terms to be usual in the marketplace, we have the terms checked by the appointed solicitor. We then had a meeting with the client to run through all the terms in the document. To fully explain the situation and the practical implications of each term. As part of our ongoing advice on this project we also considered the succession planning implications of the project and together with the client’s tax advisor continued to go ahead with the project with the property remaining in the same ownership.

The solicitor then spent time working with the developer’s solicitor to get the Option Agreement and Lease Agreement to a stage that they were happy for the client to sign.

Fees

It is usual for all of the costs associated with the development to be covered by the developer, this includes agents and solicitors fees.

Completion

The Option Agreement was then signed and the developer then started work on obtaining the connection and the planning permission.