In a robust development environment driven by demand to deliver, often within tight timescales, it is commonly the case that the process for establishing the electricity and gas infrastructure is not given its due consideration, resulting in delays and additional costs in completing the development.
Providing the legal land rights to the statutorily regulated energy supplier is one element of the energy infrastructure process which, if dealt with properly, can save the developer time and money.
Here, we outline some of the things a developer should consider as a guide to satisfying the energy supplier.
What the energy supplier needs
Broadly speaking, the main legal objective of the energy supplier is to acquire the registrable legal rights which will allow it firstly to put in the required physical operational infrastructure and thereafter to effectively operate the supply whilst maintaining its assets.
The solicitors will negotiate the legal document required to reflect the interests of the parties and will engage in the due diligence process to check that the developer can grant the rights unhindered by any constraints relating to title, planning, statutory, environmental or other issues. The energy supplier will then require its legal interest to be registered with the Land Registry.
Depending on factors such as the size of the development and the required supply, the existing electricity/gas connections and whether the roads running through the development will be maintained by the local authority, there may be need for the acquisition of a transfer or lease of a substation or link pillar site, a gas governor site or merely easements for running the cables or pipes for connection into one of these pre-existing structures.
As part of the acquisition process the solicitor acting for the energy supplier will carry out investigations to ensure that the developer has good title and can grant the rights unimpeded and also to check that there is nothing else to prevent or limit the exercise of the rights. A specific set of enquiries for the developer to answer will be raised to tease out the issues.
Information that the developer will require to produce include:
- Title documents - these will be checked to establish ownership of the site, if any consent is required by anyone with a registered interest in the title and to ensure that all of the rights required fall within the developer's title. If any of the rights required fall in third party land the third party involved will also be required to grant the necessary rights.
- Planning documents - in the case of the substation/gas governor these must be considered at the planning application stage and their locations should be identifiable in the planning drawings, pursuant to planning permission, as evidence of local authority approval of their inclusion. If these fall under a general permitted development order a certificate of lawfulness to confirm this should be obtained from the local authority.
- Highways plans - the energy supplier will require access and sometimes cables/pipes off publicly maintained road and will wish to ensure that there are no gaps between the public road and the developer's legal boundary
- Section 106 agreements between the developer and the local authority - these should exclude any enforcement against the energy supplier as a statutory undertaker acquiring a legal interest in the development site
- Environmental reports - professionally prepared reports will be considered by the energy supplier to identify any existing contamination of the site and any required remedial action. The energy supplier will be keen to protect its infrastructure and assets and will often expect to be given an indemnity from the developer in the event that contamination pre-dating the transaction affects the energy supplier.
Once the energy supplier's solicitor is satisfied with the diligence information and the legal document is agreed and completed it is registered at the land registry. The developer's solicitor will provide any previously agreed certificates or consents required to allow the energy supplier's interest to be registered.
Some of the dos:
- Have as many of the diligence documents as possible ready to hand over at the start of the transaction
- Respond promptly and as fully as possible to the set of enquiries raised
- Be aware that any dealings with the land during the process may affect the rights being granted to the energy supplier and your solicitor should be notified especially when it is not the same solicitors working on the various transactions related to the site
Get in touch
If you would like to discuss this issue further, please contact a member of our team.