IT’S CONVEYANCING, BUT NOT AS WE KNOW IT:

IT’S CONVEYANCING, BUT NOT AS WE KNOW IT:
TRACTORS, SILAGE AND SINGLE FARM PAYMENTS
Legal Update
Author: Jonathan Thompson
Date: October 2014
Many people buy country property, be it a rural bolt hole, a grand house set in a few
acres or a thousand acre estate. They are all linked in that there are many
conveyancing considerations over and above a regular conveyancing transaction.
As an agricultural property lawyer, what do I that is different and adds value?
The title to the property is the first issue to be considered: it is often unregistered (i.e.
not registered at the Land Registry) or there may not even be title to part or even all
of it. I have sold a few properties for clients, where they had no initial proof of
ownership, as ownership came about hundreds of years ago. Such ownership might
be traced to a gift from the Crown, an Act of Parliament or other acts! These
problems can be solved.
There are many more enquiries and searches that I have to ask: is there chancel
repair liability or an Agricultural Credits Act 1928 charge against a seller’s name?
The current and post purchase intended use of the property is paramount. The
existence of any tenancy is critical: some agricultural tenancies last a lifetime and
could markedly affect the value and use of the property.
Another critical concern is access: both that of access to the property and access by
third parties on or over a property. Sometimes such access is established, but there
may be a third party establishing a right of way over the property.
The agricultural aspect is another element: are there Single Farm Payment
entitlements (soon to be Basic Payment Scheme) or any agri-environmental
schemes? Agricultural use and cultivations are checked: have crops been
harvested? If not, will the crops remain the property of the seller until harvest, after
the sale has completed?
We need to check water and drainage rights and ensure that the property has a right
to abstract water or a water supply and discharge foul water, if required.
Environmental and planning considerations are high on the list of priorities. I dealt
with a matter once where there was a water tank buried in the ground, which was full
of sheep carcasses. This necessitated both legal and pragmatic solutions. Rural
buildings can have a chequered planning history and I need to check that planning
permission was obtained, for example, for a new barn. If a grand house or even a
small house is a listed building, was a listed building consent obtained for the works
either on the property or around its curtilage? The insertion of new windows into a
listed building without consent, once held up a multi-million pound purchase.
The mechanics of exchange and completion are the same for an urban property and
an estate. However, I look beyond that and want to know a client’s use for their new
farm or estate. Is it to be farmed in hand by them or contract farmed? What would
happen to any employees – will they be transferred to the employment of the buyer
or made redundant? Is the land bought as a rural retreat for the enjoyment of the
countryside, a working farm, a shooting estate or equine use?
So, we have to plan for post-completion. Who is to use the property? Are there tax
mitigation elements we could address in order to assist the new owner? For
example, the new owner could enter into a contract farming arrangement with a
contract farmer so as to try to claim Agricultural Property Relief from Inheritance Tax.
If the property is subject to a tenancy granted prior to 1 September 1995, it may be
worthwhile undertaking a surrender and re-grant of the tenancy so as to try to claim
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100% Agricultural Property Relief.
In all of this, teamwork between the buyer, the buyer’s accountant, land agent, other
professionals (e.g. forestry managers) and myself is key.
In summary, the role I undertake in buying and selling agricultural property is not
simply about the mechanics of conveying agricultural property, but rather adding
value in terms of forward planning. What is to happen post-completion and with the
management of the land in a purchase scenario? It is a balance of commercial
interests, lifestyle, tax and risk.
If you own or are proposing to buy a farm, land or country house do give me a call to
discuss how I could assist you.
More information
Jonathan Thompson
+44 (0)1483 255295
jonathan.thompss [email protected] harlesruss ell.co.uk
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www.charlesrussell.co.uk
Charles Russell LLP is a limited liability partnership registered in England and Wales, registered number OC311850, and is au thorised and regulated by the
Solicitors Regulation Authority . Charles Russell is also licensed by the Qatar Financial Centre Authority in respect of its branch of f ice in Doha. Any ref erence to a
partner in relation to Charles Russell LLP is to a member of Charles Russell or an employ ee with equiv alent standing and qualif ications. A list of members and of
non-members who are described as partners, is av ailable f or inspection at the registered of f ice, 5 Fleet Place, London EC4M 7RD.
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