Use and Non-Use of Licensed Land Agents by Renewable Energy Companies

April 17, 2018 | Tyson A. Wagner

In Alberta, oil and gas companies have long required the services of accredited land agents in acquiring or leasing land to exploit the mineral resources there.  The recent surge in interest in renewable energy sources, especially wind and solar, presents an anomaly:  although renewable energy companies (“RECs”) must also secure interests in land to build the infrastructure necessary to collect and transmit such energies, they are not bound by the same regulatory restrictions on the acquisition of such interests.

The Land Agents Licensing Act (R.S.A 2000, c. L-2) (the “LALA”) provides, at subsection 3(1)(a), that no unlicensed person (other than those specified as exempt, such as lawyers) may “engage in the activities of a land agent”.  The activities of a land agent are derived from the definition of a “land agent” in section 1(c), to wit: “a person who negotiates for or acquires an interest in land”, whether on his or her own behalf, or on behalf of another.

An “interest in land”, in turn, is defined in the LALA as an estate or interest in land that is “acquired for the purpose of a right of way or other surface use” and that is of a kind that may be acquired “by a right of entry order under the Surface Rights Act” (or certain other statutes, or certain other orders, that do not apply in the context of this article).

The Surface Rights Act (R.S.A. 2000, c. S-24) sets out various situations in which a right of entry order may be made, which for the most part concern mining or oil and gas extraction and the subsequent remediation of the affected lands.  For example, section 12(3) provides that a right of entry order may be made concerning access to land for mining and drilling for minerals, and specifically in sub-section 12(3)(b)(iii), uses ancillary to “oil sands operations”, such as access roads or the disposal of waste products.

Since the Surface Rights Act does not specifically provide that the Surface Rights Board may make a right of entry order in respect of a renewable energy project, a curious result obtains:  where an REC obtains an interest in land to (for example) set up a wind farm, that interest in land is in fact not an interest in land, at least within the parameters of the LALA.

As a result, RECs may use licensed land agents at their discretion or not at all, and may negotiate directly with land owners for access to desirable lands.  This may pose a risk to some land owners.  A land owner who unwittingly strikes an unfavourable deal to grant an REC access for a renewable energy project may later take the position that he or she was misled by an unscrupulous negotiator.  Such land owner’s remedies, if any, will lie in the common law of the contract.

In oil and gas projects where licensed land agents must be used, the LALA provides mechanisms to disincentivize unethical behaviour. For instance, section 7 provides that a land agent’s licence may be cancelled or suspended whenever “it is in the public interest to do so”; if such land agent continued to act without a licence, subsection 3(3) provides that he or she may be subject to a fine or 6 months’ imprisonment, and for repeat offences, up to 12 months’ imprisonment.

To the extent that the LALA serves a purpose of consumer protection, it would be consistent with that purpose for the provincial Legislature to extend such protection to apply to RECs and renewable energy projects.  Moreover, such change could be implemented with a relatively minor amendment to the LALA’s definition of an “interest in land”.  At the same time, regulatory roadblocks that increase costs could hinder (but in any case will not help) the development of the renewable energy industry.  The Alberta government will need to weigh competing public policy imperatives before undertaking any legislative reform.

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