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Tag Archives: wind farm lawsuits

Farm owners’ property used as security for wind farm financing: what property owners need to know

07 Thursday May 2015

Posted by ottawawindconcerns in Renewable energy, Wind power

≈ 4 Comments

Tags

Brinston, Garth Manning, K2, leasing land for wind turbines, Ontario, property values wind farm neighbours, South Branch wind farm, wind farm, wind farm financing, wind farm lawsuits, wind farm leases, wind power, wind turbines

 

Farm owners’ property as security for wind farm financing: what owners need to know

Wind developers can use farm leases as security for financing the power project
Wind developers can use farm leases as security for financing the power project

Ontario Farmer, May 5, 2015

by Garth Manning and Jane Wilson

It came as a surprise to many in Ontario when it was revealed that the multi-national power developers behind the K2 wind power generation project near Goderich had secured $1 B in financing, and that this arrangement is now registered on title for the 100 farm properties involved as lessors.

The arrangement is between K2 Wind Ontario Inc. and Mizuho Bank Ltd. Canada Branch. It secures a revolving credit facility of up to $1 billion at 25% on a number of items, including the contracts between landowners and K2 for land and road agreements with municipalities.

Another, smaller example has also come to light: a wind power project south of Ottawa in Eastern Ontario, where the five landowners leasing land for a 30-megawatt, 10-turbine project now have charges on their properties for $70 million.

Immediately, questions arise as to what would happen if the power developers were to default on their loans: would the lender then own the farm properties? How would that affect road use agreements with municipalities?

The fact is, this is a common practice. Property owners can refer to the leases imposed by the developers to review this potential situation, and many others that may affect operation and ownership of their land while leasing land for the power projects.

In an Invenergy standard contract, for example, is this clause: “In connection with the Lessee’s financing of the Project, the Lessee….is hereby given the right by the Lessor…to mortgage its interests in the Lease…and to assign this Lease, or any part of parts thereof, and any subleases as collateral security…”

The proper term for this is a “Charge of Lease” but may also be referred to as a “Demand Debenture.” What it means is, the present value of the wind power contract (i.e., the Feed In Tariff or FIT contract with the Ontario government) is greater than the present value of the lease amount. The difference between those two amounts is security for the loan to the power developer. It is a charge against all contracts favourable to the wind power developer, which may also include road use agreements.

It is like a line of credit for the developer and typically, advances against the amount are tied to certain milestones such as stages of construction.

The critical factor, however, is what it means for the lessors, in other words the farm owners who have leased their land for wind turbines, access roads, substations, transmission lines, etc. The importance lies not so much that the farmer lessors might on default lose their land (the farm land itself is not mortgaged, just the turbine contract on that land) but the damage it does to that property owner if he/she wants to sell, or to renew an existing mortgage, or place a new one, or in any way borrow money for which the lender would want security on his/her land.

Let’s assume a farm owner wants financing for farm operations or improvements. That might now pose difficulty: lenders do not like to be second in line, as they would be where a charge of lease is in place.

If the farm owner wishes to sell, similar difficulties arise: the lawyer for a purchaser in the case of an agreement to purchase will do a title search and discover the Charge of Lease on title, then immediately advise his or her client that the client is entitled to get out of the deal unless the registration of the Charge is removed from title. A purchaser is not expected to assume any risk of this nature.

In the case of renewing an existing mortgage or placing a new one, the lawyer for the bank or other lending institution would take the same position — no renewal or new mortgage unless the customer sees that the Charge disappears from title.

This is one of several important characteristics of signing a lease to have wind turbines, and needs to be thoroughly considered. Other legal issues to be carefully considered may include potential liability for the substantial cost of “decommissioning” turbines at the end of the lease, difficulty obtaining insurance on property with wind turbines, loss of autonomy over building on the property and carrying out regular farming practices, and, last, the potential for nuisance suits from neighbours affected by noise or property value loss.

Property owners should consult with a lawyer before signing any agreement.

Garth Manning is a retired lawyer and former president of the Ontario Bar Association, who lives in Prince Edward County. Jane Wilson is president of Wind Concerns Ontario; she lives in North Gower.

Wind farm fight in Ontario 2014: no giving up

31 Wednesday Dec 2014

Posted by ottawawindconcerns in Uncategorized

≈ 1 Comment

Tags

Algoma, Blanding's Turtle, Drennan case, Environmental and Lands Review Tribunal, Eric K Gillespie, Julian Falconer, legal actions wind farms, Northland Power, Not a Willing host, Ontario, Ontario government, prince Edward County, Rebecca Thompson, Sun News, Wind Concerns Ontario, wind farm appeals, wind farm lawsuits, wind farm property values

From Wind Concerns Ontario

Ontario wind farms in 2014: a look back

A spokesperson for Northland Power, whose Grand Bend wind power project can now proceed following decision in an appeal, told a London Free Pressreporter that “One would think the people opposed would lose their appetite for this fight, but they haven’t yet.”

Indeed not. And 2015 will be more of the same as almost every wind power project in Ontario has been appealed, and several are headed for judicial review. Plus, countless private individuals have lodged or plan to take legal actions related to noise nuisance and property value loss.

The truth will stand, eventually.

Here’s a look back in pictures at the year that was.

Parker Gallant (R) on the Dale Goldhawk consumer radio show for one hour on the $16-million Christmas Day power giveaway in Ontario. Wind Concerns Ontario documented the millions lost over 2014 through Ontario's mismanaged energy sector
Parker Gallant (R) on the Dale Goldhawk consumer radio show for one hour on the $16-million Christmas Day power giveaway in Ontario. Wind Concerns Ontario documented the millions lost over 2014 through Ontario’s mismanaged energy sector
Julian Falconer represented four families in a legal challenge; while many points about the appeal process were made, the appeal was lost
Julian Falconer represented four families in a legal challenge; while many points about the appeal process were made, the appeal was lost
Lawyer Eric Gillespie continues to represent Ontario communities and appeals against wind power projects; more to come
Lawyer Eric Gillespie continues to represent Ontario communities and appeals against wind power projects; more to come
Auditor General Lysyk becomes the 2nd A G in a row to lambaste the Ontario government for its incompetence in the energy file, and wasted money on green energy
Auditor General Lysyk becomes the 2nd A G in a row to lambaste the Ontario government for its incompetence in the energy file, and wasted money on green energy
Transport Canada bends to pressure from Big Wind and rescinds order to remove Chatham-Kent wind turbines for safety. (2015 is an election year!)
Transport Canada bends to pressure from Big Wind and rescinds order to remove Chatham-Kent wind turbines for safety. (2015 is an election year!)
Invenergy pulls out of Listowel-area wind project
Invenergy pulls out of Listowel-area wind project
Health Canada releases non-peer-reviewed summary of noise and health study; shows that 16.5% of people within 1 km of turbines experience distress. Media misses this. (2015 is an election year!)
Health Canada releases non-peer-reviewed summary of noise and health study; shows that 16.5% of people within 1 km of turbines experience distress. Media misses this. (2015 is an election year!)
Energy Minister Bob Chiarelli tries to explain that Ontario's electricity bill increases are insignificant, thereby demonstrating his opinion of the intelligence of Ontario citizens
Energy Minister Bob Chiarelli tries to explain that Ontario’s electricity bill increases are insignificant, thereby demonstrating his opinion of the intelligence of Ontario citizens
Two wind power projecst approved for Ontario's world-famous Algoma region, showing the Ontario government has no regard for the environment, whatsoever
Two wind power projects are approved for Ontario’s world-famous Algoma region, showing the Ontario government has no regard for the environment, whatsoever
None so blind as those who will not see. Or listen. Toronto-based Ontario Premier Kathleen Wynne ignores rural and small-town communities. New procurement process for large-scale power projects still does not allow municipalities to say "No" to Big Wind.
None so blind as those who will not see. Or listen. Toronto-based Ontario Premier Kathleen Wynne ignores rural and small-town communities. New procurement process for large-scale power projects still does not allow municipalities to say “No” to Big Wind.
Rallies and protests continue throughout the province; this one to Save the Nor'Westers
Rallies and protests continue throughout the province; this one to Save the Nor’Westers
Dr Robert McMurtry, officer of the Order of Canada, publishes a case definition for adverse health effects associated with wind turbine noise, with health researcher Carmen Krogh
Dr Robert McMurtry, officer of the Order of Canada, publishes a case definition for adverse health effects associated with wind turbine noise, with health researcher Carmen Krogh
87 communities have now passed Not A Willing Host resolutions
87 communities have now passed Not A Willing Host resolutions
Fund-raising events occur throughout the province: here Stephana Johnston attends a supper for SWEAR and the Drennan case
Fund-raising events occur throughout the province: here Stephana Johnston attends a supper for SWEAR and the Drennan case
One of Tim Hudak's election promises was to end the Green Energy Act and enact new regulations; the PCs lose the election for various reasons, disappointing rural/small-town Ontario
One of Tim Hudak’s election promises was to end the Green Energy Act and enact new regulations; the PCs lose the election for various reasons, disappointing rural/small-town Ontario. The Liberals win a majority and vow to continue their (money-losing) green energy policies.
Sun Media's Down Wind doc film with Rebecca Thompson attracts $30,000 in crowd-funding in days
Sun Media’s Down Wind doc film with Rebecca Thompson attracts $30,000 in crowd-funding in days
The Blandings Turtle is in and out of court as Prince Edward County citizens fight the Ontario Ministry of the Environment to save the environment. CanWEA lawyer announces in Toronto court that no appeal was ever supposed to be successful, and the Environmental Review Tribunal needs "direction" so a successful appeal never happens again.
The Blandings Turtle is in and out of court as Prince Edward County citizens fight the Ontario Ministry of the Environment to save the environment. CanWEA lawyer announces in Toronto court that no appeal was ever supposed to be successful, and the Environmental Review Tribunal needs “direction” so a successful appeal never happens again.
Drs Ian Arra and Hazel Lynn publish a review that says there is evidence of an association between wind turbine noise and distress
Drs Ian Arra and Hazel Lynn publish a review that says there is evidence of an association between wind turbine noise and distress
After taking on Big Wind for years and NextEra in specific, members of the members of the Wrightman family of Middlesex-Lambton decamp to Nova Scotia (but continue to fight)
After taking on Big Wind for years and NextEra in specific,  members of the Wrightman family of Middlesex-Lambton decamp to Nova Scotia (but continue to fight)
Big Wind continues its indoctrination of schoolchildren with support of the Ontario government. In this case, distribution of the T-shirts was halted when parents complained
Big Wind continues its indoctrination of schoolchildren with support of the Ontario government. In this case, distribution of the T-shirts was halted when parents complained
Ontario communities fight against the Big Wind "scam": wind power cannot deliver on its promises of reducing GHGs, creating jobs, protecting the environment
Ontario communities fight against the Big Wind “scam”: wind power cannot deliver on its promises of reducing GHGs, creating jobs, protecting the environment

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