Drafting Site Control Agreements for Renewable Energy Projects: Due Diligence, Threshold Considerations, Unique Terms

Description

Renewable energy projects must secure long-term site control rights via purchase, lease, and/or easement to create and maintain real estate rights for the project--from permitting the use of real property for initial due diligence and project planning purposes to, ultimately, the construction and maintenance of the renewable energy project on the property.

Prior to drafting any agreements, counsel must identify potential land rights and title issues, and possible issues stemming from competing interests, as well as establish the scope of the rights and property under the site control agreement to ensure these are all adequately addressed in the agreement. Typical site control agreements include options, leases, easements, and purchase agreements. Whichever type of agreement is used for site control, counsel must be aware of the considerations and terms unique to these agreements that differ from standard real estate transactional contracts.

In addition to drafting the agreement, and in order to evidence site control, a memorandum of the site control agreement should be recorded in the public records for the jurisdiction in which the property subject to the agreement is located. Recording a memorandum of site control provides constructive notice of the developer's real property rights that allow for development, construction, and operation of the project to all third parties, including possible buyers and subsequent owners of the property, so as to protect the real property rights of the developer and allow the developer to obtain title insurance coverage, as required to obtain financing and construct the project.

Listen as our expert panel discusses due diligence and threshold considerations for counsel prior to drafting site control agreements for renewable energy projects. The panel will describe the types of agreements used to establish site control, provisions unique to each, and best practices for negotiation and drafting.