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You the Business > Agriculture

Sale and Purchase of Agricultural Property

Clarkes have experience in dealing with issues involving Agricultural Property. Agricultural Property Law is a specialised area involving understanding of Property Law, Agricultural Law and rural issues. Agricultural Conveyancing involves focus on issues rarely found in other areas. Solicitors and Clients need to be aware of issues relating to boundaries (location and ownership), water supply and drainage, rights and easements affecting and benefiting the property, single farm payments, quotas, sites of special scientific interest, forestry agreements and so on. Although the same principals apply to agricultural land as to other areas of conveyancing, there are particular factors that apply to agricultural land which mean that the sale and purchase of such land demands knowledge and understanding of these issues.

A non-exhaustive list of matters that need to be considered by both Sellers and Buyers of agricultural land.

1. Plans and Boundaries – Are these correct? Can the boundaries be located, whom owns the boundaries
2. Tenancies and Occupiers Rights
3. Transfer of Undertaking and Employment Regulations (TUPE) if there are any employees
4. Are there adequate rights of access to and from the property?
5. Are there adequate rights of water supply to the property?
6. Are there any sporting rights?
7. Are there are any commons rights?
8. Is there past contamination of the land and will the Buyer be liable.
9. Is there a milk quota and is it intended to be sold?
10. Is there a single farm payment or entitlement to a single farm payment to be sold and is this freely transferable?
11. Who is to receive single farm payment for current year?
12. Are the parties being fully advised as to tax consequences timing and disposal, apportionment of price and so on.

TUPE

Under the Transfer of Undertakings Employment Protection regulations (TUPE) it is now apparent in certain circumstances transfer of agricultural land may lead to an obligation on the part of the purchaser to take over the contracts of employment of persons employed in connection with such land. Whether the parties intend it or not careful advice and consideration may be needed in this area.

TENANCIES

Since 1st September 1995 any new business tenancy of agricultural land is protected by the Agricultural Tenancies Act 1995. The 1995 Act introduced the concept of farm business tenancies and aimed to eliminate over a period of time tenancies having long term protection under the 1986 Agricultural Holdings Act. After the 1st September 1995 only a few special case tenancies will have the protection of the Agricultural Holdings Act.

Farm Business Tenancy does provide some protection to tenants by allowing fixed term business tenancies of 2 years or more to continue as annual periodic tenancies, but there are no restrictions on the reasons for which notices can be served and there are no succession rights.

Valuation of Land

It is clear that land subject to farm a business tenancy is worth much more than land subject to a tenancy under the Agricultural Holdings Act 1986. A long term business tenancy may not be uncommon but it may be stipulated to be non-assignable and determinable on the death of the tenant. There may have been an implied surrender of an Agricultural Holdings Act tenancy if the Landlord and Tenant enter a new tenancy agreement under the 1995 Act, but the law relating to pre 1995 tenancies can still be important if the land has been farmed by the same person since before 1st September 1995.

Anti-Avoidance Schemes - Tenancies

Under the 1986 Agricultural Holdings Act various schemes have been attempted to circumvent the tenants security afforded by the Act. Frequently such tenancies fail as being contrary to public policy.

Partnership Land

Frequently land may be owned by one person perhaps father or grandfather and farmed by a partnership. If rent payable by the partnership this may indicate the presence of a tenancy and care should be taken to ascertain the legal position.

Environmental Issues

Many schemes exist designed to protect the environment and payment depends upon the landowner agreeing to enter into a management agreement to control the use of the land. Any sale of a farm consideration needs to be given to apportionment of these payments and whether or not the benefit and burden passes to the buyer.

Contamination Issues

Occasionally farms have been used for the deposit of waste materials and care needs to be taken to ensure that the likelihood of environmental contamination in later years is minimised.

Sale and Purchase of Animals

Animals are subject to ordinary law of contract insofar as the sale and purchase is concerned.

There is no implied condition as to fitness for purpose unless the seller provides a warranty. Clarkes have experience in providing agreements for sale and purchase of animals, pasturage of animals and livery agreements.

For expert advice please contact Paul Roberts, Head of Residential Property and Partner.