With recent statistics stating that the UK comfortably rank within the top 20 countries with the highest electricity consumption in the world, it is ever more important to ensure that the significant portion of our electrical grid that is situated on private land is maintained to a high level and relations between the respective land owners and infrastructure owners are nurtured.
One of the best ways to achieve this is by ensuring that all parties are aware of their rights regarding the access to the poles and cables, and for private landowners to be compensated for such access. This discussion explores how this is achievable through a wayleave agreement, with a specific focus on residential landowners, as this is our speciality.
What is a wayleave?
The general definition of a wayleave is a land right that a non-owner can apply on a piece of land to gain a temporary right of passage over, or through, land. To apply this to the context of electrical apparatus, a wayleave is a termed agreement, normally lasting between 14-20 years, between a homeowner and the relevant Distribution Network Operator (DNO) that owns the apparatus on the homeowner’s land.
The key rights that a wayleave agreement would afford to the DNO is for them to be able to maintain and inspect their apparatus at all reasonable times (or any time in case of an emergency) and to fell or lop any tree or hedge on the land which obstructs their apparatus. Wayleaves are governed by the Electricity Act 1989, and in exchange for agreeing to the terms of the wayleave, landowners are financially compensated.
Wayleave agreements also tend to set out briefly the way the DNO will carry out their work, for example, UK Power Networks provide covenants on their wayleave agreements to “Not cause any unnecessary damage or injury to the Property” and to “Make good to the reasonable satisfaction of the Grantor any damage caused by or arising out of the execution of the Works”. Such covenants help to set out the landowner’s understanding of what to expect with their dealings with the DNO’s.
Annual vs Capitalised
The most common type of wayleave agreement that you may be aware of if you have any poles or cables on your land is an annual wayleave. An annual wayleave being in place would result in a yearly payment based on set rates, which is determined by the type of apparatus located on the land. What many people are not aware of, is that you can negotiate a wayleave agreement with the DNO as a capitalisation of the payments over the termed period, so you receive a single lump sum at the start of the agreement instead of waiting over the years to receive the annual payments.
Whilst some may be attracted to the flexibility of an annual agreement, as they can terminate it at any time by giving 12 months’ notice, if you do not see a reason as to why you would want to come out of the agreement for the termed period, having the money up front may be a preferable option.
If you are currently receiving annual wayleave payments, you are still entitled to receive a capital payment, but once you enter into the fixed term wayleave, you will lose your annual payment.
Depending on the DNO that owns the apparatus in your area, you may also be able to obtain back payment for both types of wayleave agreement if you have never received a payment from the DNO whilst owning the land. If the DNO in your area does offer backpay, it is usually limited to a certain number of years. DNO’s that do not offer backpay tend to have slightly higher rates to reflect this.
Is a wayleave for high voltage apparatus the same as a low voltage wayleave?
To ensure that landowners are compensated fairly for the type of apparatus that is on their land, the apparatus is generally separated by their voltage, with 240v being classified as low voltage and 11kv to 66kv being high voltage (refer to the diagrams below for visual confirmation).
The rights that a wayleave for both high and low voltage apparatus provide is likely to be extremely similar, and the payment offered for an annual wayleave for both will also be similar, however, the way in which the compensation is calculated for a capitalised wayleave differs between the two for cases where the apparatus is located on residential land. This is because it is widely accepted that high voltage apparatus can cause a devaluation to residential property value. This is known as injurious affection.
In cases where there are high voltage poles on residential land, the compensation for the wayleave would be calculated by negotiating a percentage that the property is being devalued by based on the closes piece of apparatus to the main residential dwelling, the result of this would then be divided to reflect the number of years that the wayleave will be in place for. Any additional equipment not included in the injurious affection percentage would be added on to the claim as a capitalisation payment, similar to how the low voltage compensation is calculated.
Is a wayleave the only agreement in relation to electrical apparatus?
You may have also come across the term ‘Easement’ whilst looking into your rights in relation to the electrical apparatus located on your land.
An easement is similar to a wayleave in that it affords the DNO the rights for them to access their apparatus on private land, however an easement is a permanent agreement that gets written into the deeds of the property. Essentially, the agreement would remain in place regardless of who the owner of the land in question is as it applies to the property rather than the owner, whereas a wayleave is a temporary agreement applying solely to the owner of the land that grants the agreement and is null and void upon the sale of the land.
The compensation afforded for an easement agreement tends to be significantly higher than a wayleave because it is a permanent agreement. Some DNO’s offer what is known as a Lease of Rights, which contains aspects of both wayleaves and easements. A Lease of Rights is a termed agreement, like a wayleave, except it would be written into the deeds of the property for that termed period, so if you were to sell up, the lease of rights will stay in place until the term comes to an end. Easements and Lease of Rights are typically reserved for high voltage apparatus and do not apply to low voltage apparatus.
Do I need to set up a wayleave?
If the DNO in your area hasn’t contacted you in order to set up a wayleave agreement, whilst it would come with several benefits for both sides, you are not obligated to set one up.
If the DNO has approached you with a need to access the apparatus on your land or you wish to get the apparatus removed, it is always recommended that you seek professional assistance to see where you stand. You again would not be obliged to sign an offered wayleave, but you should be aware that utility companies benefit from a range of statutory powers which they can fall back on in case of dispute.
As much of the apparatus is in place to ensure safe distribution of electricity to end users, the DNOs can apply to retain or access their apparatus through a ‘Necessary Wayleave’, which, if the apparatus in place is providing a vital service, is likely to be approved by the Department for Energy Security and Net Zero (DESNZ). Depending on the situation, the amount of compensation awarded through a necessary wayleave may be less than what you could have achieved by negotiating a regular wayleave.
How do I set up a wayleave?
Whilst it is possible to approach the DNO directly to set up a wayleave agreement, it is generally recommended to appoint a surveyor that is experienced in dealing with these matters to act on your behalf. By signing a wayleave without a proper understanding of what the terms of the agreement should be, or the level of compensation that should be applicable, you may lose the opportunity to receive a suitable payment for the DNO’s usage of your land or agree to something that might diminish your position in the future. If you are considering setting up a wayleave agreement for the apparatus on your land, contact us today and we can review your case and advise you accordingly.
References:
Top 20 Countries with Highest Electricity Consumption (yahoo.com)
Disclaimer: The information in this blog post was accurate at the time of publishing. However, laws, regulations, and best practices may change over time. We do our best to keep our content up to date, but we cannot guarantee that all information remains current or correct. This blog post is for general information only and should not be taken as legal, financial, or professional advice. If you are unsure about anything, please contact us or seek professional guidance before making any decisions.
