There is usually much more to buying or selling a farm than just the land as a farm is a usually a family business, run either through a limited company or, more often, as a family partnership.
The land is often held separately from the business and licensed or leased to the company or partnership by one or more family members, but not all shareholders or partners in the business. The buyer may buy the land from X and the business from Y.
Then there are the assets of the business to consider. Plant and machinery such as tractors, combine harvesters and the like are large and expensive assets. Live stock may also be included in the sale.
Usually, but by no means always, the benefit of subsidy payments will pass with the farm, such as EU Basic Payment (or whatever subsidy system is introduced by the Government when we leave the EU). There may well be chattels included in the sale such as poultry units and timber buildings not fixed to the land.
There may be cross compliance condition requirements and greening payments under the Basic Payment Scheme to consider. Water abstraction licences, Woodland Grant agreements, agri-environment agreements or holdover rights for growing crops may form part of the sale or purchase.
At McMillan Williams, our mission is "To make quality legal services accessible to everyone", including agricultural businesses and landowners. Our specialist commercial property solicitors are experts in the complexities of agricultural conveyancing and we can help to ensure that, as a seller, you achieve the best price for your farm and farming business or, as a buyer, you get everything that you negotiated.
Prices for farm products have been under a lot of pressure in recent years and farmers with potential development land can boost their capital and income by selling off relatively small parts of the farm for housing or commercial property.
Usually, the developer/builder will want to obtain planning permission for the development before he parts with his money for the land. This can take the form of an option agreement or a conditional contract. The conditional contract route gives the developer more certainty; he knows the price he has to pay for the land if he gets planning permission to develop. An option agreement may include a mechanism to agree a price if planning permission is obtained, but it still has to be agreed.
The planning process can take a long time, usually up to two years and even longer if the application is contentious. The agreement usually provides that the developer can appeal to the Secretary of State, who has been more amenable to granting consent than local councils of late. The housing shortage is forcing consents, often in the face of vociferous opposition. The Council may impose conditions that are unacceptable to the developer and he will want to reserve the right to pull out of the option or contract.
A farmer selling land for development should weigh all this up before he grants an option or agrees to sell under a conditional contract. Valuing the land for development and negotiating when the farmer gets paid for it are critical issues which require complex negotiation.
At McMillan Williams, our mission is "To make quality legal services accessible to everyone" including landowners who want to maximise their capital and income by selling off some of their land. We can help you achieve the price you are looking for and guide you through this often complex process.
If you are considering selling part of your land to a developer under an option agreement and wish to speak to our team of specialist agricultural Lawyers, call us on 020 3551 8500 or email us at firstname.lastname@example.org.
Mortgages for a farm or land based commercial business is a specialised form of commercial mortgage lending.
There are many lenders providing short to medium term finance in this market. Often the finance is needed to take advantage of a specific project or to improve an existing business opportunity, but it is always secured on the agricultural land and buildings.
There are also lenders who will assist with livestock finance, enabling the farmer to expand a herd or cover existing expenditure. This is a form of working capital finance with repayments dates that suit the timing of farm income.
The Agricultural Mortgage Corporation specialises in providing mortgage finance for farms and land based commercial businesses. They specialise in medium to long term loans to the farming industry and have been leaders in this field for many years. Other banks will also look closely at this form of finance.
At McMillan Williams we understand farmers’ needs. We are panel members of Folk2Folk, a peer lender based in the West Country, which provides the sort of opportunity finance that could well suit the farmer.
Farmland has its own lease/tenancy system. The Agriculture Holdings Act (AHA), 1986 gave tenants considerable security of tenure but changes brought about in the Agriculture Tenancies Act (ATA), 1995 made significant changes.
If a tenancy was granted before 1st September 1995, the AHA may of course still apply, but only ATA will apply to tenancies granted after that date.
AHA tenancies can be problematic for the owner of the farmland and can prompt a series of questions; Was the tenancy an oral one? Did it exclude assignment? Was a tenancy from year to year? Or was it a licence giving exclusive occupation? Was it originally a fixed term tenancy even if the original term has ended?
The tenant enjoys considerable protection under the AHA and he must make sure he takes advantage of it.
Under ATA tenancies, the position is essentially reversed. The tenant has no security of tenure and no right to renew, unless he falls within certain exemptions. A fixed term tenancy of more than 2 years has to be terminated in accordance with the ATA, but no notice is required for a tenancy for a lesser period.
Licences may be needed to occupy or tenancies for ground used for horses. A tenant may have security of tenure under the Landlord & Tenant Act, 1954 if the land is not used for agriculture, to which strict definitions apply.
At McMillan Williams, our mission is "To make quality legal services accessible to everyone", including agricultural tenants and landowners. Our specialist commercial property solicitors are experts in the complexities of agricultural leases and tenancies and we can help to ensure that your matter is resolved to your satisfaction.
If you are engaged in a dispute with your landowner or tenant or are about to negotiate the terms of an agricultural tenancy agreement and would like to speak to our team of specialist lawyers, call us on 020 3551 8500 or email us at email@example.com.
A successful boundary dispute claim may often cost more than it is objectively worth. Nevertheless, for the farmer it can be worth a lot of money, particularly when development land is involved.
The Land Registry maps are not definitive. Conveyances usually state boundaries are delineated “for the purposes of identification only”. OS plans and field numbers may be relevant, as is extrinsic evidence of topographical features that exist or may have existed in the past.
Finally, the “hedge and ditch” presumption may be relevant, deriving from a case in 1810.
Claimants have to prove their case. The case of Parmar v Upton (2015) shows how the “hedge and ditch” presumption can be very relevant today. Land had been sold for development and although the extent of the land was small, it was very valuable to the developer. He lost.
At McMillan Williams our mission is "To make quality legal services accessible to everyone." including those who are trying to resolve a boundary dispute. We take a pragmatic approach to this kind of dispute and always suggest that a cost benefit analysis is carried out at the beginning. We are firm believers in the value of mediation and recommend it to all our clients as a way to minimise the costs.
If you are currently engaged in or concerned that you may be involved in a boundary dispute and wish to talk to our expert agricultural lawyers then call us today on 020 3551 8500 or email us at firstname.lastname@example.org.
The countryside maxim of “live and let live” can produce all sorts of legal headaches.
A farmer may verbally allow a neighbour, whom he has known for years, to bring water to his house across the farmer’s land or use a shortcut across the farmer’s land to the main road. Years later, when the neighbour sells his house to someone new to the area, that verbal agreement may lead to a court case seeking to establish a right to use that land in perpetuity "an easement" in legal terms.
Land use may not alter that much over time, but attitudes do change.
More and more city dwellers want to move to the country to live, but rarely understand rural life and ways. Always have any agreement of this kind drawn up in writing and carefully define any right to be granted.
The Highways Act 1980 and the Inclosure Act 1801 are two statutes that are currently being used by the Ramblers Association to establish “lost” footpaths. Conservative estimates suggest that some 500-1000 "rights of way" could be re-established across the country.
Landowners can mount a defence against any such claim, particularly where the routes were never in fact “set out” or have been lawfully stopped up. Our expert agriculture lawyers can assist you with these claims and advise on how you can resist them.
At McMillan Williams our mission is "To make quality legal services accessible to everyone." including those who wish to establish a right of use of land or to defend themselves against a right of way. We understand these problems and can help you to save a great deal of expense and unpleasantness further down the line.