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3. What should I know before I enter into a lease with Brascan/SWEI?
The Blue Highlands Citizens Coalition recommends that anyone who is contemplating signing a lease with Brascan/SWEI first obtain independent legal advice. We have sought such legal advice, and, as a result of that legal advice, our members have been advised against signing the Brascan/SWEI lease.
The Blue Highlands Citizens Coalition also recommends that any local landowner who has already signed a lease with Brascan/SWEI should obtain independent legal advice regarding his/her obligations under the lease. Even though there are serious ramifications associated with actually having signed the lease and having provided a signed copy to Brascan/SWEI, it is still not too late to speak to a lawyer about the commitment you have made and about how to manage the risks and obligations which you have assumed.
At our June 22, 2003 public information meeting in Thornbury, the Blue Highlands Citizens Coalition expressed its grave concerns, from a local landowner's perspective, regarding the form of the Brascan/SWEI lease agreement. Our issue with the lease is whether the lease is, from a local landowner's perspective, a fair and reasonable one. In our view, it is not. As we explained at our June 22, 2003 public information meeting, the lease gives Brascan/SWEI the opportunity to lease your land for a term of up to 50 years. It is up to Brascan/SWEI to determine the term of the lease – not you. All , rather than part, of your land is leased. The number and siting of turbine towers on your property is left to Brascan/SWEI's discretion. There are rights of first refusal, both (a) in terms of lease renewal upon the expiry of the term of the lease (even after 50 years!), and (b) upon the sale of your land to anyone other than a spouse, brother, sister, child or grandchild (and, upon a sale to any of those people, they themselves become subject to the right of first refusal). Brascan/SWEI has the right to assign the lease, in whole or in part, without restriction. Brascan/SWEI can mortgage its lease rights to creditors of Brascan/SWEI. If expropriation of your property occurs, you need to share the expropriation award with Brascan/SWEI! There is also a provision permitting the removal of aggregate from your property at a price of $0.50 per ton for 35 years.
The Blue Highlands Citizens Coalition explained at its June 22, 2003 public information meeting, and we reiterate, that the lease represents a “lock-up” of your land in favour of Brascan/SWEI. It is not correct to simply say that your land is “under option”. Once you sign the lease, your land is subject to a lease – not simply an option. If you have signed the lease, all of the lease's provisions and restrictions apply to you immediately, including the mortgage rights in favour of Brascan/SWEI and Brascan/SWEI's rights of first refusal. For a nominal payment of $100 per year, your land has been locked-up in favour of Brascan/SWEI. If another developer comes along with a much better deal, you won't be able to take advantage of it...you are already committed to Brascan/SWEI.
We reiterate our recommendation that anyone who has signed, or is contemplating signing, the Brascan/SWEI lease should seek independent legal advice.
Note to the reader: We note that the comments on this page relate specifically to the Brascan/SWEI standard form lease. Any wind power development lease should be reviewed by a lawyer before it is signed by a landowner. However, whether or not our comments outlined above regarding the Brascan/SWEI form of lease are applicable to another developer's form of lease will depend on the wording of the other developer's lease.
Click here for an article in the Tillsonburg News regarding wind power plant leases.
Click here to read "Two Dozen Suggestions About Wind Power Leases for Farmers" from the OFA.
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Copyright, The Blue Highlands Citizens Coalition, 2004. All rights reserved.