Who is your Landlord 2 – The Facts

‘Dynamite’ – that was the word used by one land reform veteran on Twitter about the guest post by Lewis Kermack the other night, on the subject of Stornoway Trust’s lease to Lewis Wind Power.

The article, Who Is Your Landlord?, has been shared by many, even including Alex Thomson, Chief Correspondent of Channel 4 News, who told his 99.9 thousand followers on Twitter that here was “a dark tale from the Western Isles…”

But of course the Stornoway Trust was never going to take it lying down and earlier today the reaction came, with a statement on its Facebook page by one of the Trustees. 

It appeared to dismiss the points made by Lewis and began by stating: “The Trust is aware that there have been some misconceptions circulating in regard to the nature, duration and terms of the lease agreement with Lewis Wind Power. These are easily addressed…”

Fortunately, Lewis has agreed to come back on the blog one more time with a response to the Stornoway Trust and their presentation of apparently ‘simple facts’.

Before he comes back in, though, I want to tell you two stories which illustrate the extent of Lewis Wind Power’s power (no pun intended) on the Stornoway Trust estate.

‘RELINQUISH‘

The first concerns the struggle Point and Sandwick Trust had with obtaining their lease on the land for their Beinn Ghrideag wind farm. Point and Sandwick Trust have issued a statement about that tonight – read it in full here – but the gist is LWP did not ‘reliniquish’ the Beinn Ghrideag site, as Stornoway Trust are claiming, but that LWP actually insisted on being a named party to the lease. 

Point and Sandwick Trust also had to pay all LWP’s legal costs up front before LWP would even discuss the matter of the lease with them. In total, it was a two-year negotiation and PST had to pay “£57,455 to LWP’s lawyers in order to get them to agree to our lease with the Stornoway Trust”.

A spokesman for Point and Sandwick Trust said: “We were a community group wanting to build a community wind farm on community land owned by a community landlord, but we still had to pay LWP £57,000 to get our lease. Our experience fully supports Lewis Kermack’s analysis that LWP now have the final say over everything that happens on the old Stornoway General Grazings.”

My second story is about angling rights. 

I had a conversation this afternoon with a representative from the Fideach Angling Club, who told me of their efforts to renew the fishing lease on the Laxdale river and estuary.

He said: “We asked to get the lease renewed last year and the Trust had to pass it to LWP to get sanctioned. LWP took about three months – but we have to be careful (what we say) because we still haven’t got the lease…”

For the rest, I’m handing over to Lewis…

The Stornoway Trust, per Catriona Murray, one of their Trustees, have commented that the article “Who is your landlord?” circulated “misconceptions” regarding “the nature, duration and terms of the lease agreement with Lewis Wind Power”. 

The Trust’s position is that “these” (misconceptions, presumably) “are easily addressed”

I would therefore propose setting Catriona Murray’s addressing of the perceived misconceptions against what the lease documents (meaning the lease and subsequent variations of it) actually provides.  Readers can then make up their own minds.

DURATION

“The lease is for a period of 35 years: 25 years of generation, followed by a 5-year decommissioning period. It was believed at the outset that 5 years would adequately cover the initial development phase. However, had the wind farm been built in under 5 years, this would have then triggered the 25-year phase, in parallel with planning consent.” (per Catriona Murray)

What the Lease provides:

In the 2003 Lease (which all the later documents only vary and do not replace), clause 2.1 states “The Landlord hereby lets the Lease Subjects to the Tenant from the Date of Entry for the Term”, where:

“The Landlord” is the Stornoway Trust;

“The Tenant” is Lewis Wind Power Ltd, which has now changed its name to Stornoway Windfarm Ltd;

“The Date of Entry” means 28 November 2003;

“Term” “means the Original Period subject to (a) a right in favour of the Tenant to extend the Original Period for up to a further thirty five (35) years by serving not less than twenty four (24) months’ notice on the Landlord in accordance with clause 2.2 and (b) the earlier termination of this Lease pursuant to clause 8”; and

“Original Period” “means the period commencing on the Date of Entry and continuing until the date occurring thirty five (35) years from the Date of Entry”.

However, that was subsequently varied in 2010, so that, after the variation “Original Period” “means the period commencing on the Date of Entry and continuing until the date occurring forty (40) years from the Date of Entry” (ie 5 years were added).

There was then a further amendment in 2016, so that after the further variation “Original Period” “means the period commencing on the Date of Entry and continuing until the date occurring forty five (45) years from the Date of Entry”.

That is a 45 year lease and not a 35 year lease as stated by Catriona Murray.

EXTENSION

“The lease also contains a standard option for renewal. This would be at the Trust’s discretion. LWP would require to go through the whole repowering process from the beginning – obtaining planning consent, grid connection, a power purchase contract, agreeing terms with crofters and, crucially, consultation with the community. By that juncture, it is intended that the community will own a 20%+ stake in the wind farm, which will, of course, inform its decision-making on any future lease.” (per Catriona Murray)

What the Lease provides:

Clause 2.2 of the 2003 Lease states “The Tenant shall be entitled to extend the Original Period of this Lease for the Permitted Use by serving not less than twenty four (24) months notice on the Landlord prior to the expiry of the Original Period.  The Tenant shall specify in the said notice the period of such extension which shall be such period up to thirty five (35) years as the Tenant may require” where:

“The Tenant” again means Lewis Windpower Ltd (now Stornoway Windfarm Ltd); and

“The Landlord” again means the Stornoway Trust.

That means that the right to extend the lease at any time before 2048 is entirely at the discretion of Stornoway Windfarm Ltd and the length of the extension is also at the discretion of Stornoway Windfarm Ltd and could be for anything up to 35 years (taking the expiry of the lease to 27 November 2083).

Contrary to what is stated by Catriona Murray, the Trustees of the Stornoway Trust would have no discretion to refuse a valid notice seeking an extension of the duration of the lease.

THE TERMS OF THE LEASE

“Built into the current lease is the safeguard that ALL crofting jurisdiction remains with the Trust as landlord.” “There is, therefore, no doubt regarding the identity of the landlord: this estate remains entirely under the ownership of the Stornoway Trust.”(per Catriona Murray).

What the Lease provides:

Clause 7.3 (where, again, “the Landlord” is the Stornoway Trust and “the Tenant” is Stornoway Windfarm Ltd, formerly Lewis Wind Power Ltd):

“The Landlord warrants and undertakes that, except as provided in clause 3 [Resumption] and notwithstanding that the Tenant is in possession of the Leased Subjects, and is thereby the landlord of the Leased Subjects in terms of the 1993 Act [the Crofters (Scotland) Act 1993], the Landlord shall:- 

7.3.1 fulfil all of the obligations incumbent on or enforceable by any Crofter against, a landlord in terms of the 1993 Act or any contractual obligation owed to any Crofter in each case in respect of any part of the Landlord’s Subjects; 

7.3.2  meet any costs, claims, liabilities or expenses arising under the foregoing obligations and in respect of any part of the Landlord’s Property enforce the rights and remedies of a landlord against such Crofters; and 

7.3.3 (except in relation to any costs, claims, liabilities or expenses arising as a result of any act or omission of the Tenant) the Landlord shall retain or (as the case may be) assume and thereafter retain responsibility for, the Tenant from any costs, claims, liabilities or expenses free and relieve arising in terms of the foregoing obligations which (but for the existence of this Lease) would have been the responsibility of the Landlord and shall free and relieve the Tenant in respect of such costs, claims, liabilities or expenses.”

The 2003 Lease goes on to clause 7.4:

“Without prejudice to the provisions of Clause 7.3, the Landlord shall:-

7.4.1 notify the Tenant of any application for apportionment within the Landlord’s Property as soon as such application is notified to the Landlord and shall timeously make such representations to the Crofters Commission in respect of such application as the Tenant (acting reasonably) may require;

7.4.2 not agree to enlarge any common grazings existing at the Date of Entry within the Landlord’s Property or create any new common grazings within the Landlord’s Property without the prior written consent of the Tenant (acting reasonably); and

7.4.3 notify the Tenant of any application to buy part of the Landlord’s Property soon as such application is received by or notified to the Landlord and shall timeously make such representations to any person or statutory authority in respect of any such application as the Tenant (acting reasonably) may require.”

It then goes on to 7.5:

“The Tenant will enter into with the Landlord such arrangements as are necessary to allow the Landlord to perform its obligations under Clause 7.4, those arrangements to be on terms to be agreed between the Landlord and the Tenant (both of whom will act reasonably) and giving authority to the Landlord to exercise the rights of a landlord in terms of the 1993 Act or in respect of any contractual obligation owed by any Crofter including 

7.5.1 The right to receive and, in consideration of its obligations under Clause 7.3 to retain the rents from the Crofters; 

7.5.2 The right to review or apportion such rents; and 

7.5.3 The right to consent to assignation and succession;

PROVIDED ALWAYS THAT any such arrangements (1) will be in terms which do not prejudice the Tenant’s position or have the effect (either by themselves or as a consequence of their exercise) of imposing on the Tenant any greater obligations, costs or liabilities than if this Lease were not an interposed lease and the Landlord had continued to be the direct landlord of the Crofters”.

It follows from the foregoing that the Trust agreed, in 2003, that their ability to act as landlord to crofters on the common grazings derives not from the gift of Lord Leverhulme, nor from their title to the property, but from the terms of their contract with Stornoway Windfarm Ltd (formerly Lewis Wind Power Ltd).

I would also say that I have read Neil King’s comments on the original article.

I would entirely agree with him as to the powers of the Crofting Commission. However, I would suggest that Neil (whose views I respect) has misunderstood the purpose of the article. It concerned what those controlling Lewis Wind Power Ltd and the Stornoway Trust understood they were doing in 2003, even though that amounted to a joint misunderstanding of the legal position. That misunderstanding is demonstrated from the joint error in believing that the 2003 lease is an interposed lease when, on any understanding of common grazings, it is not and the other errors are consequential to that.

• Image of Lews Castle in Stornoway by Sandie Maciver of SandiePhotos.