General Practice, Solo & Small Firm Division

A service of the ABA General Practice, Solo & Small Firm Division

Law Trends & News

Practice Area Newsletter

American Bar Association - Defending Liberty, Pursuing Justice

Summer 2009

Vol. 5, No. 4

Real Estate


Featured Author

 Kyle Branum practices in real estate and business at Riddell Williams, P.S., in Seattle, Washington. He has extensive experience in real estate transactions. His real estate practice focuses on real estate purchase and sale transactions, commercial leasing, financing, construction and design, and condominium and mixed-use development. Kyle counsels clients in a broad range of business transactions, including business formations, mergers and acquisitions, private equity and debt financings, and professional practice acquisition.
In addition to practicing law, Kyle is active in the community and with local bar association. He has served as vice president (2005), president (2006), and trustee (2007) of the East King County Bar Association. He can be reached at or 206-389-1671.

The Answer Really Is Blowing in the Wind

Historically, wind power was harnessed to operate traditional wind mills that were used for pumping water or grinding sand. Today however, the primary application of wind power throughout the world is the generation of electricity.

According to the World Wind Energy Association, wind currently produces approximately 1.5 percent of worldwide electricity. A recent Department of Energy report suggests that wind could provide 20 percent of the electricity needs in the United States by 2030 as companies continue to build new transmission infrastructure and as the cost of wind technologies becomes more affordable. A key component to any successful wind farm development is owning or controlling the land required for wind turbines and insuring such real property against financial loss due to title defects, liens, or other encumbrances.

On average, and given current technologies, most wind farms have an economic life of at least 25 to 30 years. Therefore, most developers do not acquire fee simple title to the property slated for development, but rather acquire long-term ground leases. Ground leases typically provide for a brief initial term (typically 3 to 7 years) with subsequent renewal terms, allowing for a total potential term of approximately 50 years. During the initial term, the developer studies the feasibility of the site including access rights, wind monitoring, permitting issues, and other necessary governmental approvals and consents, and typically pays a fixed rental amount. Once the developer installs wind turbines on the subject property, and such turbines deliver electricity on a commercial basis, the fixed rental amount may adjust to an amount based on their commercial output.

If title to the wind farm property were to fail following the commencement of commercial operations, a developer’s losses and defense costs could be substantial and would likely place the entire development in financial jeopardy. Therefore, experienced developers will obtain a search and examination of the title to the wind farm property prior to entering into the ground lease and will purchase a policy of title insurance consistent with the amount of the developer's investment, which may well exceed hundreds of millions of dollars depending on the size of the particular wind farm. Therefore, selecting the appropriate title company is vitally important to the success of the project.

In selecting a title company, a developer should consider the following factors:

  • The financial condition of the underwriter. The developer may obtain information from rating agencies and examine annual reports and the underwriter’s own internal guides and limits on the size of a policy.

  • The title company’s resources and pricing in the area where the project will be located. Wind farm developments may span county lines and the ability of a local agent may be limited to providing a search and examination of local records only. The developer therefore should determine if one title company is capable of providing the necessary services for a multiple county project.

  • The process for obtaining any necessary endorsements. In the event extended coverage will be obtained, confirm the title company’s requirements for such coverage.

  • The flexibility of the title company to add subsequently-acquired properties to the developer’s existing title policy. For example, if the developer acquires rights to properties following the issuance of the original title policy, is the title company able to add such properties to the developer’s existing polices or will new polices need to be issued?

  • The process for increasing the amount of title coverage over the life of the project. For example, will the title company allow the developer to increase the amount of coverage through the purchase of endorsements to the existing policies or will new policies need to be obtained?

One of the key components to the successful development of a wind farm project is selecting the correct title company. Making this determination during the initial stages of development will increase the odds of success for the overall project.

Kyle Branum is a real estate lawyer at the Seattle law firm of Riddell Williams, P.S. Kyle’s extensive real estate experience focuses on renewable energy, commercial purchases, sales, leasing, financing, and construction and design. He can be reached at or 206-389-1671.

© Copyright 2009, American Bar Association.