Data center deals can shift risk to landowners

An ag real estate expert says data center projects can create unexpected liabilities for agricultural landowners and producers.

Robert Veldman with Pinion Land Advisory says while most developers will provide funding, he’s seeing an uptick in third-party entities unable to follow through on projects. “They want access to your property. They don’t want any risk. They want to access to your property, but they don’t want to pay any upfront money that is hard money.”

He says that could create issues for producers who could get stuck paying for repairs. “The risk is all on the landowner to take on for access. With access comes damage to property. Damage to crops. No insurance coverage and we also have no indemnity.”

Veldman says if landowners still want to go through with a purchase, they need to ensure that they’re protected in a contract. “We really strong to encourage to make sure that we have indemnity clauses, name you as an additional insured and your covered under the insurance policy and then any crop or property damage language is in there.”

He says ag attorneys or real estate agents are the best resource to help landowners secure agreements.