Column: County Attorney Steven Getman

Leasing your land for solar power? Know your rights before you sign.

By Steven J. Getman
Schuyler County Attorney
(Special thanks to Mark Taylor for his assistance and input)

ALBANY, July 2, 2021 --Solar power can offer New Yorkers many potential benefits, including saving money through reduced electricity bills, creating stability during periods of electric rate changes and contributing to a cleaner and healthier community by reducing our carbon footprint. With more and more state residents considering solar power, a number of private companies are looking to develop and initiate construction of new solar projects across the state, including in Schuyler County.

Recently, a number of Schuyler County landowners have reported receiving proposals from one or more energy firms, seeking land for solar facility development. These proposals offer landowners money for an option to lease or purchase land to develop, build and operate a solar power generation and storage facility on the premises. Payments may include an option signing bonus, annual option payments and potential annual lease payments. In some cases, payments may net landowners thousands of dollars.

While the terms of these options may seem very attractive, these agreements are legal documents with potential long-term implications, potentially both positive and negative. Therefore, you should proceed carefully before signing them.

An option is an exclusive privilege to lease, sell or to buy certain property at a specific price and within a stipulated time. It often takes the form of a “right of first refusal.” If the option is supported by some type of consideration, such as a cash payment or promise to pay, it becomes an irrevocable and enforceable contract for the specified time period. A lease in this case is a legal document or contract between a landowner (lessor) and a company or individual (lessee) granting that lessee development and construction rights to the landowner’s property.

Companies will often present the landowner with a preprinted or standard option agreement, followed by a standard lease. Before signing the option and/or any subsequent lease, you should carefully consider various issues, including:

• Interference with existing land uses. The installation and construction of the facility may involve a large amount of equipment similar to other construction projects. Be sure that you know how much of your land and which parts of it will be used for access construction and maintenance.
• Possible land disturbance, including to any adjoining property. Have mutually approved reclamation plans incorporated into any lease, including the possibility of a bond for remediation of the land. Determine how close to the property lines the land might be developed.
• Damage to real and personal property. Explore whether the option and lease can be written to require fences or other safeguards if needed to protect people, buildings, crops and animals. If not covered in the lease, consider asking for terms that make the company responsible for damage.
• Lease assignment. Determine whether the lease contains a clause which allows the company to assign or sell the lease to other entities. With all the changes in hands, it would be very easy to lose track of who is responsible for end of life remediation.
• Tax issues. Consider who will be responsible for any increases in property tax on the value of the land with the panels. Check the income tax consequences of the various key stages in the life of the option.
• Long term effects on the property’s title. While entering into an option does not necessarily mean a solar facility will be constructed on your property, it is important to remember that signing an option and/or lease means granting a right to others which may be viewed as an encumbrance on the property. Twenty years would be the lifetime of a typical solar installation option.
• Zoning and land use regulations. Check whether your town or village has zoning or land use laws that might affect the use of the property for solar or other forms of alternative energy. If so, confirm who will be responsible for securing any necessary permits or permissions.

Like most municipalities in New York, Schuyler County does not regulate private agreements between landowners and solar energy operators. Therefore, property owners should review any documentation very carefully and consult an experienced attorney before signing any type of agreement. Your attorney may advise you to negotiate changes to meet your needs and protect your interests before you sign it. Make sure to have your lawyer get all promises and conditions in writing.

If you do not have an attorney, the New York State Bar Association may be able to refer you to an appropriate attorney via the NYSBA Lawyer Referral and Information Service: https://www.findalawyernys.org.

Leasing and real estate options for solar energy can provide you with revenue, but you should also make sure your interests and property are protected. Proceed carefully, consult a trusted attorney and, when possible, earn money while helping to promote renewable energy.

Photo in text: Schuyler County Attorney Steven J. Getman