Continuation

Lease Option Agreements for Aquaculture in Scotland -Revised Terms

The Lease Option Agreement

ALease Option Agreement (LOA) for a fish farm development may be applied for where a valid planning consent has not yet been granted, but application for such will be pursued, in order that a development proposal can proceed. It is intended to provide the security of a time-limited exclusive interest in an area of seabed while planning applications and associated information and data requirements are prepared and submitted to the relevant planning authority.

The Lease Option Agreement will register the developer’s exclusive interest in the area of seabed in question for the stated duration of the agreement and will be subject to the conditions, as revised, set out (see below).

Granting of Lease Option Agreements

The granting of a Lease Option Agreement will be subject to the same application and information provision requirements as those for a Lease, with the exception of a valid planning consent.

Revisions to the Lease Option Agreement

Following a review of the Lease Option Agreements process, and a subsequent meeting with industry representatives, we have now confirmed the following changes to the granting of a Lease Option Agreement (‘LOA’)for both finfish and shellfish developments that will apply from October 2012;

The term within which an application for planning permission must have been registered with the relevant local planning authority willnow be 24 months from the granting of the LOA and planning permission must have been obtained within a period of 36 months.This will in our view, provide the time and flexibility necessary to survey and model a potential site, obtain a Screening and Scoping Opinion from the relevant Local Authority, carry out necessary pre-application consultation, produce an Environmental Statement andsubmit application for and gain planning consent for a single development proposal.

This extension of the term for a LOA, effectively doubling that of the original, means that multi-site (‘development specific’)agreements covering a number of site development proposals for which sequential applications are planned, previously available, will now mean areas of seabed being potentially tied up without any on-going active pursuit of consent to develop for a number of years. This in our view is not conducive to either Crown Estate Scotland nor industry’s interests and therefore such multi-site agreements will no longer be available. All LOAs will now be for single seabed area development proposals.

For similar reasons of avoiding the cumulative sterilisation of a large area of seabed for periods during which consents are not pursued, and to encourage LOA grantees’ pursuit of development consents, there will be a maximum number of 5 LOAs that can be held by one applicant at any one time, for which no validated planning application has been registered.

Standard conditions for a LOA

  • A planning application must have been registered with the relevant local planning authority within 24 months of the date of a LOA for that development proposal.
  • Planning permission must have been obtained within 36 months of the date of a LOA for that development proposal.
  • Extensions to the LOA’s 24 month planning application registration milestone will not be granted.
  • Where a planning application has been registered for the proposed development within the required 24 months, Crown Estate Scotland may at its discretion extend the 36 month period for planning permission to be obtained where any delays requiring such are beyond the applicant’s control and could not reasonably have been foreseen.
  • Areas of seabed subject to a LOA may be adjusted within agreed limits to accommodate changes to address concerns that have become evident in surveys or pre-consultation processes, but only within the agreed term.
  • The LOA must be exercised within 6 months of planning consent having been granted
  • A maximum of five sites/areas of seabed may be the subject toLOA to any single applicant at any one time. A LOA may be replaced as long as the total number does not exceed five.

The LOA may be exercised for a full Lease:

  • during a period of 6 months (or such longer period as Crown Estate Scotland may agree) after the date of issue in writing of the planning permission for fish farming purposes
  • by giving written notice to Crown Estate Scotland in the form of the Notice attached to the Lease Option Agreement accompanied by a copy of the planning permission
  • on one occasion and not in phases.

These terms are those of Crown Estate Scotland’s standard Lease Option Agreement for proposed marine finfish and shellfish farm developments in Scotland. Lease Option Agreements for proposed seaweed cultivation developments may be applied for, the terms for which will be similar in all respects other than the required statutory consent.

LOA Principle and related reservations

LOAsare made available to industry for the purpose set out in the first paragraph of this document, and are granted on the basis they are applied for subsequent to a level of knowledge and confidence on the potential of the site(s) in question having been obtained that supports a clear intention to pursue the acquisition of required statutory consents and following which, exercise the LOA fora full Lease. In other words, given the increasing demand for seabed across marine business development sectors, we wish to limit the area of seabed subject to LOA for more speculative rather than considered reasons, and will expect applicants to have made some effort to assess the potential of the site, albeit in a preliminary or provisional fashion, or at least demonstrate a clear rationale for seeking an exclusive security,prior to submitting an application for a LOA.

Therefore we will now insist that a supporting statement accompany all LOA applications (as has always been required by the application form), to demonstrate this consideration.

In this regard Crown Estate Scotland will also reserve the right to -

  • request additional supporting information where we think that the consideration referred to above for potential development has not been satisfactorily demonstrated by the application submitted, failing which reject the application
  • reject any application/re-application for an LOA for the same area of seabed that was the subject of a lapsed or withdrawn LOA with the applicant, or an area in its immediate environs, within two years of the original LOA coming to an end
  • withdraw without notice but with confirmation of having done so, any LOA where we have good reason to doubt that it will be exercised for a full lease within the specified term
  • request additional information to justify application for areas that are considered by Crown Estate Scotland to exceed that normally required for a fish farm development, or appear in number and/or proximity to represent a development scenario unlikely to be consented by the relevant authorities.

unless clearly extenuating circumstances apply.