I am looking at a property for sale in Central/West Texas and the realtor is saying the landowner is planning on reserving the wind rights from the sale of the property. I understand OG/Mineral severances, as that has been standard for around 100 years now in Texas, but this is the first I have heard where wind rights are being severed or retained in a property sale. My obvious problem with that would be that I purchase a property, wind rights were severed, then the folks that did the severing lease my property to a Wind energy company and Im stuck with giant turbines all over my property. Does anyone have any insight on the current legality of this? Thank you in advance!

Sounds terrible. But everything is a negotiation. Offer him 50% of asking price, 100% of the wind rights, no rights to ingress/ egress. He'd get all of the money from the turbines that you would never approve. Be curious to see how he responds.

If you own the surface, I'm not sure how they would lease the wind rights. Since it's Texas, minerals are superior to surface rights but I've never seen a case or issue where wind rights trump surface rights. Do they own the adjacent tracts and therefore could possibly place turbines on those tracts? This might be a situation of someone being too cute for their own good or they have a crystal ball for 25 years down the road.

I dealt with a property a while back where the Seller retained rights to a cell tower lease on the property - somewhere around $2k/month for many years into the future.

The property sold for significantly less as a result, granted this situation is in Colorado, not Texas...but it seems to me you should recieve a discount.

My company develops wind, solar, and storage projects. We have property owners who sell the land and keep the wind rights even during the development phase. Reserving the rights is really no different than oil/gas in that if the land is under an existing lease then the owner of the land has little to say. There are always setbacks from housing, wetlands, adjacent properties etc, but if the co. with the lease wants to place a turbine on the land they can. The surface owner would receive a disturbance fee for any turbine or other disturbances, but would have no rights to the royalties. The big companies like Nextera, Invenergy, etc, all have accepted the reserve of wind rights (at least on our projects) and pay the royalty to the wind rights holder.

There are a few ways a lease can be written. The community method, which is our method, is everyone who puts their land in the project will receive a royalty. Another way is to only pay royalties to those who receive a turbine. Depending on the project, adjacent land owners will receive a good neighbor payment since they have to look at them and not receive any payments.

What county and/or city is this in? I will see if I can tell you the anything about it.

Reserving during the development phase or after a lease has been signed is different than selling when there is no lease. Selling after a lease is signed means the person reserving the rights had control of the surface at the time the lease was signed and had the right to grant access to that surface. The buyer in that scenario is purchasing a property with an existing lease and has no ability to control the surface within the scope of the lease.

When a property is sold and there is no lease, a reserver of wind rights has no right to use the surface of the land because they no longer own any of the rights associated with the surface. The surface estate is dominant over the wind estate. That is the biggest difference between O&G and any other estate. Mineral estate is dominant meaning the surface can be used even if not owned. Wind estate is not.

I'm a real estate attorney for a renewable energy company. There is no legal authority for severing wind or solar rights from the property before or after a lease is signed. When our landowners try to do it, we refuse to acknowledge it as a valid transaction and will treat the surface owner as the owner of the wind/solar rights. Our view is that it is an assignment of income in violation of IRS regulations.

country said:

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Reserving during the development phase or after a lease has been signed is different than selling when there is no lease. Selling after a lease is signed means the person reserving the rights had control of the surface at the time the lease was signed and had the right to grant access to that surface. The buyer in that scenario is purchasing a property with an existing lease and has no ability to control the surface within the scope of the lease.

When a property is sold and there is no lease, a reserver of wind rights has no right to use the surface of the land because they no longer own any of the rights associated with the surface. The surface estate is dominant over the wind estate. That is the biggest difference between O&G and any other estate. Mineral estate is dominant meaning the surface can be used even if not owned. Wind estate is not.

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As you previously stated, there is no court decision on this matter. Reserving wind rights without a lease has been done and will continue to be done until there is a cases deciding the law. There are many parallels to oil/gas.

To the person asking the question, please post where this land is and I can help determine the probability of a project. Unless this property is the perfect property, I wouldn't buy it with the seller reserving this right.

I would ask more questions regarding the severance. Is the seller reserving the right to lease or is he/she reserving just wind royalties? Here is a good article highlighting some of the issues: Severance of Wind Rights. Ultimately, you need to feel comfortable with the deal, which may require investigating the companies in your area and the likelihood of projects like previous posters have suggested.

Either way, I would require that the risk be incorporated into the purchase price.

The property is in Concho County.

ElephantRider said:

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agie95 said:

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country said:

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Reserving during the development phase or after a lease has been signed is different than selling when there is no lease. Selling after a lease is signed means the person reserving the rights had control of the surface at the time the lease was signed and had the right to grant access to that surface. The buyer in that scenario is purchasing a property with an existing lease and has no ability to control the surface within the scope of the lease.

When a property is sold and there is no lease, a reserver of wind rights has no right to use the surface of the land because they no longer own any of the rights associated with the surface. The surface estate is dominant over the wind estate. That is the biggest difference between O&G and any other estate. Mineral estate is dominant meaning the surface can be used even if not owned. Wind estate is not.

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As you previously stated, there is no court decision on this matter. Reserving wind rights without a lease has been done and will continue to be done until there is a cases deciding the law. There are many parallels to oil/gas.

To the person asking the question, please post where this land is and I can help determine the probability of a project. Unless this property is the perfect property, I wouldn't buy it with the seller reserving this right.

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Not really. Minerals are legally established as the dominant estate.

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Really...there are many parallels. Are there differences? Yes.

country said:

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Reserving the actual wind rights is meaningless in Texas because wind is not a dominant estate to the surface estate. The person who reserved the wind could try to lease those rights all they want and won't ever be successful. At the end of the day the wind company would still have to cut a deal with the surface owner to gain access and use the surface for installation.

In the infant years of wind development this happened quite often and everyone just sort of waited for a case to be tried through the court system to handle it. Over time people started changing the angle. Now it is far more typical to see a reservation of any royalty payments or a portion of any royalty payments associated with a wind development for a set number of years. Either way, the surface owner is left with the dominant estate and has no fiduciary duty to try and get royalty payments for the person who reserved them.

I am not a lawyer but I've got a lot of experience in this arena. Take my comments for the price paid for them.

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Is there any potential for this to change, though? Not saying it will. But could you agree to this deal, thinking your surface rights would trump wind rights, then that change?

Either way, I don't think I'd agree to purchase property if they're retaining wind rights.

Yes, it could change. The legislature could pass a law that wind rights are severable or the courts could develop common law that wind rights are similar to mineral rights and are a severable dominant estate over the surface estate. That's why I would never purchase a property where the wind rights had been "reserved".

Anything can change. I wouldn't think the legislature would have the cajones to make the wind estate dominant but I never view the legislature as being reasonable. As for the foreseeable future I don't think that will happen. As to whether or not I'd buy the property, I'm not sure, but I can tell you there is a segment of the market that has demonstrated a willingness to purchase property under those circumstances. Depends upon your risk aversion I suppose.

jay07ag said:

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The property is in Concho County.

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Unfortunately, Concho county is generally good wind and near the line. It is entirely possible a wind project could could along there.