In the news: Farmers Club Journal

In the news: Farmers Club Journal

Pylon the opportunity for ready cash

An electricity line may be one kind of overhead a landowner may be grateful for. If you have a high voltage electricity line with steel pylons on your farm or estate you may be eligible for a large capital payment from the electricity company.

This stems from the nature of the rights granted by landowners when the lines were originally constructed.

In most instances pylons will have been constructed between the wars or in the 60s or early 70s. Most were constructed by obtaining temporary rights from the landowner. These are terminable and usually in the form of wayleave agreements. Such an agreement will have been in paper form originally, but may not have been renewed as ownerships change.

However, even if a current owner does not have a written agreement, it is normally still possible to terminate it. When terminated the electricity company potentially has to remove the line. If they wish the line to remain they have to negotiate a payment reflecting the loss in value of the property caused by the lines or, if the landowner insists on removal, the electricity company has to apply to the Secretary of State for longer term rights at a Wayleave Hearing.

Going to a Wayleave Hearing is expensive for both sides and so it is more usual to negotiate a settlement.

Due to the cost of removal and their necessity as public infrastructure, pylons and lines are effectively permanent structures regardless of the type of agreement. However, there is often a strong opportunity to obtain a large capital payment for the loss in value they cause. Pylons cause losses because of their visual intrusion and public perceptions about health issues from electromagnetic fields (yet to be fully proven). Pylons also cause additional costs to farming operations.

So how much might you be able to claim? The amount depends on a range of factors but, provided the pylons are within around 200 metres of the farmhouse (250 metres for the largest), it will generally be a substantial five figure sum and far better than the value of the annual payments currently received. Where pylons run very close to farmhouses it is not uncommon for claims to reach six figures.

It is important to note that it does not matter if a property was bought with full awareness of the lines - and possibly at a discount. It also does not matter if a property was built after the line was constructed. Full claims are still permitted by the legislation.

It is also important to note that pylon lines crossing land with potential for development can cause significant losses to development values. Large claims can arise because land is sterilised for building along the route of the line and pylons are unsightly to anything built alongside.

Claiming compensation can be straightforward for the property owner. However, they must source advice from a specialist in this field as the legislation surrounding electricity lines contains many pitfalls for the unwary.

Ideally use someone on a no win no fee basis, obtain an initial free consultation, and ensure that they have the experience to take matters to a Wayleave Hearing if required. This way there is nothing to lose in exploring the opportunity and you may have stumbled across a very lucrative opportunity.

Ben Lenton is a rural practice chartered surveyor who runs a firm specialising in electricity matters.

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Article originally published in 2010 by the Farmers Club Journal.