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This article was published on December 14th, 2023
Buying agricultural land has long been seen as a secure investment. You can start or expand a farming business, profit from increasing land prices or purchase land as a development opportunity. Whatever the reason, it isn’t a straightforward process and speaking with a solicitor experienced in agricultural conveyancing will bring you much-needed support at every stage of the process.
Agricultural conveyancing is a specialised area of law that deals with the transfer of land and property for agricultural purposes. It is a complex process that presents unique challenges and requires the right legal support to protect all parties involved. It involves a thorough understanding of property law, agricultural tenancy law, environmental regulations and historical land use patterns. From easements and boundaries to restrictive covenants and targeted tax benefits, there are many elements unique to rural land transactions that don’t come into play in standard conveyancing.
The best way to avoid pitfalls in agricultural conveyancing is to use a qualified agricultural conveyancer or solicitor. They possess the expertise and experience to navigate the complexities of agricultural conveyancing. They will conduct thorough due diligence, interpret title deeds accurately and negotiate complex terms effectively. These are the main areas they will guide you through:
Title deeds provide the legal documentation establishing ownership of the property. Understanding and interpreting the title deeds is crucial to ensure the seller has a clear and marketable title, free from any encumbrances or disputes.
It’s not unusual for families to inherit agricultural land and pass it down through generations. This tradition can lead to considerable tracts of land remaining unrecorded with the Land Registry. It is, therefore, essential to check whether the land you intend to buy is completely registered and whether any covenants or restrictions are in place. Your conveyancing solicitor may suggest trying to locate any old documentation existing before the land’s registration to determine if there are any additional considerations.
Another important check is to ensure no ambiguity surrounding boundaries – does the legal title exactly match the plot of land you’re expecting to buy? Furthermore, who is responsible for maintaining the boundaries? This information should be given by the seller or in pre-registration deeds. When you only buy part of the land, the transaction will create new boundaries. Your conveyancing solicitor will check the transfer document, ensuring it clearly defines boundary positions, types and responsibilities.
Agricultural properties often involve extensive land, buildings, and infrastructure, making comprehensive surveys essential to identify any potential defects or issues that could impact the value or usability of the property. Neglecting thorough surveys can lead to costly surprises and disputes later on.
Encumbrances are any restrictions or charges on a property that affect its value or use. They can include things like restrictive covenants, easements, mortgages and liens. These encumbrances can significantly impact the value and usability of the land and it’s essential for both the buyer and seller to be aware of them. Your conveyancing solicitor will identify and disclose all encumbrances on a property before a sale proceeds. Failing to identify and uncover these encumbrances can lead to legal action, financial liabilities, potential delays or even the breakdown of the transaction.
Agricultural land is often subject to rights of way easements. You need to understand whether you have permission to travel over someone else’s land or whether third parties have a right of way across your land. You should also find out who is responsible for maintaining and repairing the easement. This information should be available in the title document, which your conveyancing solicitor will review and they may also recommend searches such as a Highways Authority search.
Agricultural land may also be subject to environmental regulations, such as pollution control orders, waste disposal restrictions and conservation designations. Your conveyancing solicitor will conduct the necessary searches to clue you in to avoid future penalties.
Before buying agricultural land, you must be clear about who occupies it. Agricultural tenancies often involve complex terms and conditions, such as rent reviews, succession rights and termination clauses. If any of it has been let to a third party, you should find out what terms exist and how long the agreement has been in place. This investigation should let you know whether the tenancy is covered by the Agricultural Tenancies Act 1995 or the Agricultural Holdings Act 1986 (AHA).
The AHA governs the relationship between landlords and tenants in England and Wales. It establishes a framework for tenancy agreements, rent reviews and compensation claims. Non-compliance with the AHA can lead to significant legal issues and financial penalties for the landlord.
An overage or clawback agreement is a clause often used in an agricultural land conveyance. The clause allows the seller to share in the future uplift in the value of the land if it is used for a non-agricultural purpose. This agreement can benefit both the buyer and seller, as it provides the buyer with a reduced purchase price and the seller with the opportunity to benefit from the development potential of the land.
Overage payments are typically calculated as a percentage of the increase in the land’s value. The buyer and seller agree upon the percentage at the time of the sale. The trigger event for the payment is often the grant of planning permission for a non-agricultural development.
Buying agricultural land is a huge investment with some inherent risks. By engaging our team of experienced agricultural solicitors, you can be fully confident in your legal representation. We will conduct thorough due diligence and provide the best professional advice to ensure a successful agricultural conveyancing transaction.
Whether you’re selling a traditional livestock farm, considering clawback arrangements or looking at tenancy grants, our primary goal is safeguarding your interests. We’ll also keep you up-to-date and well-informed throughout the process.
Contact us today to learn more about our specialist agricultural conveyancing solicitors and how we can help you navigate the complexities of agricultural conveyancing. Call us at 0330 058 0118 or fill out our simple enquiry form and we’ll be sure to be in touch.
