Don't sell your (property's) soul to the company store

3/12/09 Batavia (NY) Daily News
Letter: Don't sell your (property's) soul to the company store
By Joseph A. Zampogna

Thursday, March 12, 2009 10:03 AM EDT

On a crispy clear and bright sunny day last fall, we were visited at our Orangeville home by a young sales representative from The Invenergy Corporation. This individual came to politely explain that our neighbor had signed a land-lease agreement with the Invenergy Wind-Power Company to erect a 400+ foot wind-turbine on their property adjacent to our southern property line. He carried with him a Setback Waiver Agreement that he wanted our family to sign and have notarized. After a pleasant conversation, he departed, leaving the unsigned document with us.

Since that visit, several months have passed and our naivete regarding wind "farms" has been replaced by the sobering reality that the Orangeville landscape and the quality of life that we have taken for granted, as well as the value of our property, will forever be negatively altered by the imposition of this "so called" clean and renewable energy resource.

Our family has arrived at our current understanding of wind-turbines and "wind farms" through research, reading and visitations to areas where these mechanisms are currently in operation. In addition, we are in frequent Internet contact with scientists, agencies and other interested parties that share up-dated information with us regarding this issue.

The nine-page Setback Waiver Agreement that was presented to us contains a project participation fee to be paid to us over a 15-year period if the developer executes the waiver by erecting a wind-turbine within 1,000 feet from our residence or within 150 feet from the boundaries of our property. No participation payment is made to the owner for five years or until the developer begins selling electrical energy to a power company. If and when this is successful, and in exchange for a yearly payment ranging from $2,000 per year to $3,500 per year for 15 years, we are being asked to "submit our property's body, soul and value to the company store."

A careful study and a scrutiny of the language contained in this agreement reveal how skewed it is in favor of the developer. For example, it includes a confidentiality clause which requires the owner(s) not to disclose the terms of the Agreement to any parties other than their attorney or immediate family members. In addition, the Agreement requires that the owner(s) waive enforcement of noise limits and shadow limits that may be required by applicable law. Although payment is offered for 15 years, the noise and shadow limit waiver is in force for 40 years. However, this clause is apparently "superfluous" since the sales representative told us that wind turbines are "as quiet as the hum of our new kitchen refrigerator."

There is also a no interference clause in the Agreement that prohibits the owner from disturbing or interfering with the development, permitting, construction, installation, maintenance, or operation of the wind power facilities. Consequently, an owner who signs such a contract compromises their right to recourse in the event they are not satisfied with any activity by the developer on their property.

The default sections in this contract require that the owner provide a "written" notice of the event of default to the developer or mortgagee including the required remedy to correct the default. The developer has two months and the mortgagee has six months to "begin" to correct the default and to proceed with "commercially reasonable diligence" to correct the default. The expression "commercially reasonable diligence" is subject to interpretation, and therefore to possible litigation. Unfortunately, in signing this Agreement, the owner waives the right "... to institute summary proceedings in connection with the signed Agreement." Simply stated, the owner sacrifices the right to bring a lawsuit in order to correct the default and for possible damages as a result of the default.

In the instance of a monetary default, the developer has two months and a mortgagee has three months to remedy the required obligation. According to the Agreement, this type of default is remedied when the tenant (developer/mortgagee) deposits the amount of money in question into an escrow account. The money in question remains there until a final decision is made by a court or upon a negotiated agreement between the tenant and landlord. The tenant (developer/mortgagee) is not required to pay interest on monies due and, as previously noted, the owner has waived the right to bring legal action. In the interest of "fairness," the developer or mortgagee retains the right to institute legal action for recovery of any payment made to the owner.

Reading and interpreting the "legaleeze" of a complex contract is a challenging task which requires the assistance of an experienced attorney. After so doing, this writer asks why anyone would sign a contract which contains so much protection for the developer and so little protection for the property owner. Perhaps, a property owner would sign a Land-Lease Agreement solely out of concern for the environment, for production of "clean energy," or to protect the value of their neighbors' properties? Or, is it solely about the money? Is anyone so altruistic that they would sign a contract that seriously compromises their lifestyle and the value of their property without receiving some form of monetary return?

It is painfully apparent that when money is involved, all other clauses of a contract seem to be of little consequence to the recipient. Nevertheless, it is important to note that in our current world of economic turmoil and financial uncertainty, failure to honor contracts, bankruptcies and foreclosures are commonplace and often subject to the politics of expediency. Therefore, "Caveat Emptor!" (Let the buyer beware!)

Dr. Joseph A. Zampogna lives in Orangeville.