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The German Federal Court of Justice (BGH) backs developers: Wind farm operators may contractually secure their planning and investment security as long as this does not place an unreasonable burden on landlords. A decision with a signal effect.
In its decision of March 12, 2025 (Ref. XII ZR 76/24), the Federal Court of Justice answered the question of whether a land use agreement for a planned wind turbine can be terminated before construction actually begins if the project is delayed.
In this specific case, the Federal Court of Justice answered this question with a clear “no.” The decision thus provides legal certainty, but at the same time shows how complex contractual relationships are in the context of the energy transition.
In the case decided by the BGH, an operator of wind turbines had concluded a use agreement with a farmer at the end of 2017 for a piece of land he owned in Saxony-Anhalt. The agreement provided for a term of 20 years, beginning with the commissioning of the last planned turbine in the wind farm; the farmer was to receive annual compensation for the land’s use. According to the provisions of this use agreement, which had been pre-formulated by the operator, the land only had to be made available “at the start of construction.” Both parties were also granted a right of withdrawal if the necessary immission control permit was not obtained within five years.
After the approval process had dragged on for several years without the immission control permit being granted and without construction of the plant having begun, the farmer terminated the use agreement in February 2022 with due notice as of May 30, 2022, or alternatively as of the next possible date.
Although he was able to cultivate his land without restriction, he had not yet received any usage fees, contrary to his expectations when signing the contract. He did not want to wait any longer and no longer be bound by the contract, especially since the usage fees offered for comparable land had probably risen in the meantime.
The operator did not accept this termination and sued the farmer for notarized declarations for the registration of easements and building encumbrances in the operator’s favor.
After the lower courts had upheld the operator’s claim and declared the farmer’s termination invalid, the case finally ended up before the Federal Court of Justice. It also came to the conclusion that the termination of the user agreement was invalid.
In its decision, the Federal Court of Justice first of all once again confirmed that user agreements for wind turbines are to be treated legally as rental agreements; consequently, the provisions of rental law (Art. 535 et seq. BGB (German Civil Code)) apply to them.
According to the contractual provisions, the fixed term of 20 years was only to begin when the last plant was commissioned. In the Federal Court of Justice’s opinion, this constitutes a condition precedent because, at the time the contract was concluded, no approval had yet been granted for the planned wind power plants and it was therefore not only unclear when the plants would be commissioned but also whether they would be commissioned at all.
Therefore, although the contract was binding, the fixed lease term of 20 years had not yet begun, which is why the lease term was (still) indefinite. No ordinary termination before the start of the lease term
In the Federal Court of Justice’s opinion, the farmer could not effectively terminate the contract with notice at this stage. The court took the view that the ordinary right to terminate the contract was excluded for the period prior to the start of construction. Although the parties had not expressly agreed on such an exclusion of termination, in the judges’ opinion this was implied in the contract.
On the one hand, the contract only expressly regulated the right to terminate without notice for cause. This suggested that there should be no right to ordinary termination.
On the other hand, the contractual provision allowing the parties to withdraw from the contract if approval for the plants has not been granted after five years or has been definitively refused would be meaningless if the landowner could withdraw from the contract at any time beforehand with due notice.
Finally, it should be taken into account that the wind farm operator has a clear interest in excluding ordinary termination. Before initiating expensive and lengthy approval procedures, it must be able to secure the land required for the project in the long term.
If farmers such as the defendant in this specific case were able to simply terminate the contract during this period, project planning would be impossible and the investment highly risky. This interest was also recognizable to the farmer as a contractual partner. On the other hand, his interest was also sufficiently protected even if ordinary termination is excluded, because he is entitled to the contractually agreed right of withdrawal, which protects him from being bound by the contract for too long. In addition, despite the existing user agreement, he could continue to use and cultivate his land without restriction, at least until the start of construction, and sell it if necessary. Therefore, excluding ordinary termination did not represent an unreasonable burden for the farmer.
In contrast, the burden on the operator would be disproportionately greater if the property owner were granted an ordinary right of termination, as this would deprive the operator of the necessary planning security.
The BGH decision has far-reaching consequences, especially for project developers. They gain greater planning and investment security because they can (and must) secure land for the long term through contracts without owners being able to back out at short notice. This applies at least if landowners, on the other hand, are not left without rights, but are granted a clearly defined right of withdrawal, as in this specific case.
The decision sends a strong signal. It confirms that the long-term planning and investment security required for the expansion of renewable energies can be contractually guaranteed without placing an unreasonable burden on landowners.
This requires that the contracts are balanced and contain fair exit clauses in favor of the landowner in the event of the project's failure, such as a corresponding right of withdrawal.
It is therefore important to draft the user agreements precisely and thoroughly.
Please feel free to contact us if you are about to sign a new contract or would like to have your existing contracts reviewed for validity.
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Dr. Michael Klett
Partner
Attorney-at-Law (Rechtsanwalt), Certified Tax Advisor
Stella Miller
Manager
Attorney-at-Law (Rechtsanwältin)
Gabriele Heise
Attorney-at-Law (Rechtsanwältin), Specialist Lawyer for Public Law
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