Leasing your land to a wind or solar farm can offer many benefits. It can provide you with a way to generate income on land that is otherwise going unused. Contrary to traditional farming crops, a renewable energy farm provides a more reliable income stream – which is not as impacted by changes in climate or rainfall. In addition, solar and wind farming makes a long-lasting contribution to the community – by supporting a cleaner economy for future generations.
However, this does not mean you should jump into a lease agreement with a renewable energy company without first considering all of its implications. In a recent post, we discussed the potential for a nuisance lawsuit against a wind farm. Your lease agreement should protect you from being included in any such lawsuit.
Indemnity is a form of insurance that can protect you from liability in the event of any claimed damages. For instance, if you lease your land to a wind power company, and your neighbor sues – claiming that the wind turbines create a nuisance that negatively impacts their quality of life – it’s possible that they could list both the energy company (the lessee) and you (the landowner) as defendants in the case. However, if you negotiate an indemnity clause in your lease agreement, it can protect you from being involved in any potential lawsuit down the road.
It’s worth noting that indemnity clauses can be complicated to negotiate – and it is not advisable to create such an agreement on your own. An attorney experienced in land use contracts can be an invaluable resource to help ensure your lease agreement serves your best interests.