B. Moss

Selling Land in Texas with a Wind or Solar Lease: What You Need to Know

Renewable energy development is transforming the Texas landscape, offering landowners the opportunity to generate income through wind and solar leases. While these leases provide financial benefits, they also add complexity when selling land. Understanding the impact of these agreements is essential for both sellers and buyers.

 

How Wind and Solar Leases Work

Wind and solar leases give energy companies the right to install and operate power-generating infrastructure on private land. These contracts often extend for decades, creating long-term commitments that must be considered when transferring property ownership.

 

Key Factors to Consider When Selling Land with a Renewable Energy Lease

Lease Transferability

Most wind and solar leases allow for transfer to new owners. However, it is essential to review the contract for any restrictions or conditions that might require approval from the energy company before completing a sale.

Effect on Property Value

A renewable energy lease can either enhance or limit a property’s market appeal. Some buyers appreciate the guaranteed income, while others may be hesitant due to potential land-use restrictions. Getting a professional appraisal from someone experienced in energy leases can help determine the property’s value in the current market.

Disclosure Requirements

Sellers must provide prospective buyers with complete details about the lease, including payment terms, land access rights, and any obligations that will transfer to the new owner. Transparency is key to a smooth transaction.

Tax Considerations

Income from wind or solar leases has tax implications that should be understood before selling. Consulting a tax professional can help assess potential liabilities or benefits related to lease payments and capital gains.

 

What Buyers Should Know Before Purchasing Land with an Energy Lease

Conducting Due Diligence

Prospective buyers should carefully examine the lease agreement to understand its terms, including payment structures, duration, and any limitations on land use. Consulting an attorney experienced in renewable energy agreements is a smart step.

Restrictions on Land Use

A lease agreement may limit how the land can be used. Buyers should evaluate whether the existing lease aligns with their intended plans for the property, such as agricultural activities or development projects.

Financial Considerations

Understanding the financial structure of the lease is essential. Buyers should review the lease’s payment schedule, duration, and any provisions for rate adjustments over time. A well-structured lease can provide a steady income stream, but it’s important to assess its long-term financial viability.

 

Key Takeaways

  • Review the Lease – Sellers and buyers must fully understand all terms before proceeding with a transaction.
  • Seek Professional Advice – Consulting real estate, legal, and tax professionals familiar with renewable energy leases can help avoid potential pitfalls.
  • Market Impact Varies – A wind or solar lease can either increase or limit the property’s appeal, depending on buyer perspectives and market conditions.

 

Final Thoughts

Selling property with an existing wind or solar lease requires careful planning. Understanding lease terms, consulting professionals, and ensuring full disclosure will help facilitate a successful sale. Buyers and sellers who take the time to evaluate their options can make informed decisions that align with their financial and land-use goals.

 

Frequently Asked Questions

Can I sell my land if it has a wind or solar lease?

Yes, but the lease terms must be reviewed to ensure transferability. Most agreements allow ownership changes, but some may require approval from the energy company.

How does a wind or solar lease impact my property’s value?

The impact depends on the buyer. Some see the lease as a financial asset, while others may view it as a limitation. A professional appraisal can clarify its effect on market value.

Can the lease be transferred to a new owner?

Most leases are transferable, but the contract should be reviewed for any conditions or required approvals.

What should buyers consider before purchasing land with an energy lease?

Buyers should review the lease terms, assess land-use restrictions, and understand the financial benefits or obligations before purchasing.

Do I need to notify the energy company if I sell my leased land?

In most cases, the lease requires the landowner to inform the energy company of a change in ownership. Reviewing the lease agreement will clarify notification requirements.

 

Table of Contents

Selling Concerns

What is the process for selling my land?

Our process is simple and easy. Just fill out our online form or give us a call. We will then schedule a time to view your property and make you an offer.

How much can I sell my land for?

The value of your land will depend on a number of factors such as its size, location, and condition. We will take careful consideration taking into account the market, location and features to provide a fair offer.

How long does it take to sell my land to you?

The value of your land will depend on a number of factors such as its size, location, and condition. We will take careful consideration taking into account the market, location and features to provide a fair offer. We can typically close on a deal within 30 days of receiving your signed contract.

Legal Concerns

What if one of the owners are deceased?

No worries. We are in the business of solving problems. We have worked with this issue on several occasions. Give us a call and we will work closely with you to fill in the appropriate documents to legally sell.

What if I owe a LOT of back taxes or have a lien on my property?

Not an issue. There is still value in your land. We will make you an offer and you will still leave the closing table with funds in your pocket. 

What if I don't have a copy of the deed?

This is not a concern. A deed is a legally recorded document. As long as the property was properly purchased, we can acquire a copy of the deed in the county records.

Closing Concerns

What is a title search and why is it important?

A title search is a process of investigating the ownership history of a property to identify any potential title defects. A title search is important to ensure that the seller has a clear title to the property and can legally sell the land. 

How much will I have to come out of pocket?

You will only leave the closing table with payment for your property. You will not pay for a survey (if one is required) and you will not be responsible for closing costs, which typically is required in a standard sale. We have you covered.

Do I need to be physically present in the city of the property to sell my property?

No, you have the option for an in person closing or a remote closing. You can come in person to the title office to sign the deed and receive payment directly or you can handle the closing remotely in which you will travel to a certified notary to sign necessary documents.

Yes! I'm Ready to Sell My Land

⚠︎ DISCLAIMER:

The contents of this blog are for informational purposes only and should not be taken as legal or tax advice. You should consult a licensed professional for advise on your specific situation. The information in this blog may be changed without notice and is not guaranteed to be complete, correct, or up-to-date. This blog is not intended to be a substitute for professional advice

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