What ‘hidden’ elements of farm ownership can hold up sales?

Buying and selling land and property can be complicated, and certain things that seem minor can easily slip through the net and really restrict progress.

Farmers Weekly asked land agents what elements are worth sorting out in advance to help speed up the sales process.

Alternative and third-party use

Obtain permission for alternative uses (where use has changed without planning permission)

This can be done through a certificate of lawfulness (if that use has been occurring for more than 10 years, or four years for residential uses) or a retrospective planning application.

This could include letting buildings for alternative use on a formal or informal basis, such as redundant farm buildings being used by a neighbour for storage or a workshop.

For listed buildings, if any work has been done, even minor repairs or replacements, this needs listed building consent.

See also: Top 6 issues that hold up farm sales and how to avoid them

Properly document any third-party use

If letting land or property, it is important to properly document this in writing, to ensure clarity about the agreement’s terms.

A potential buyer will need to know who is renting, what they are renting, how much they are paying, whether notice can be served to end the agreement, and what terms were agreed.

If this is not documented, security of tenure may have been unintentionally granted, which will reduce the value and market interest.

Matthew Alexander, senior rural surveyor, Bidwells

Tie up loose ends

Make sure any pipes or services the landowner has installed over or under neighbouring land are properly documented.

Check that access points to the property from the public road are owned up to the highway boundary and that there is no gap.

Determine if there are any sporting or minerals reservations that cannot be sold with the property.

If selling with vacant possession, make sure any farming arrangement involving the seller, such as a contract farming agreement, comes to an end in time for completion of the sale, especially if a notice needs to be served within a specified period.

Robert Fairey, partner, Brown & Co

Register your land

Although it became compulsory in the 1990s to register property when it changes hands, we still regularly come across land and farms that are unregistered. Where this is the case, we have to rely on a pile of old documents and deeds to prove the ownership of the property – if they can be found at all.

Once the land is registered:

• HM Land Registry will reduce all of those documents and deeds to a single, concise electronic document, along with a clear plan showing the full extent of the property.
• The information relating to proof of ownership cannot be lost.
• Any disputes, such as boundary disputes, can be resolved more readily.
• Future property transactions can be dealt with more smoothly.

Registering the land or farm prior to sale is a good opportunity to rectify any problems on the title resulting from missing documents, which may put off any prospective buyer or make it difficult to prove ownership if the need arises.

As a rough guide, we suggest that voluntary registration will take three to five months from instruction to completion.

Oliver Holloway, partner, Clarke & Simpson

Ownership rights

Adverse possession claims

Where a third party has encroached on to your property and occupied an area of land, uninterrupted, for a certain period, they may be able to claim for adverse possession.

If proven beyond doubt then they may be able to claim title to that property. Boundaries should be walked and assessed to confirm that this has not taken place.

Restrictive covenants

We have seen some landowners who were unaware of various restrictive covenants affecting their property. Such covenants often come to light only during the sale process when the deeds or title register are fully investigated.   

Some examples include: not to use the property for keeping pigs or poultry, for example; not to erect any building or dwelling house upon the land; and only to use the dwelling or any future dwelling as a private house.

More unusual ones the firm has seen include: not to carry upon the land the trade of a fried fish shop or any noisy, noxious or offensive trade; and no wine, beer or spirits to be sold upon the land at any time.

Mineral rights

Historically, many landed estates and institutions reserved mineral rights when they split and sold land parcels. Such reservations are often forgotten, especially in areas without potential for extraction.

There are two elements to be confirmed: the rights to the minerals themselves and the rights to work those particular minerals.

Richard Gadd, senior associate, Fisher German

See also: Lessons learned from large Lincolnshire family farm sale

Water systems

About half of the farms we deal with have private water supplies and it’s very common for complex systems to be left when farms are broken up over time.

It rarely causes problems in day-to-day use but the buyer’s solicitor will want to determine ownership and any liabilities.

If a borehole supplies the holding and nowhere else, this is relatively simple, as long as the water is tested and compliant with regulations and the system is in good nick, such as using polypipe rather than iron pipes.

The main issue comes when supplying residential or commercial properties. Good understanding of what liabilities the owner has to those properties, in terms of maintenance of property and infrastructure, is needed.

The extent to which these properties are responsible for paying for the water supply or infrastructure repairs must be clarified.

The key is to properly detail the water system to help buyers understand it, and ensure that meters are installed in the right places to support who is using and paying for what amount of water.

If the landowner is not prepared in this way, the sales process could be held up for months and buyers may insist these improvements are made before they complete, or attempt to negotiate the price down.

George Syrett, head of farm agency in the south of England, Savills

Save valuable time

Streams and rivers

Where does your ownership end? The nearside bank, the middle of the river or the far bank? Who has the fishing rights?

Normally a river will be a dividing boundary feature between the farm you are selling and the neighbouring property.

In the absence of clear documentation, we recommend that the boundary is straight down the middle.

Asbestos

There probably isn’t a farm in the UK that doesn’t have some asbestos sheeting on a building somewhere.

As a matter of good practice, a farm business should already have an asbestos report, but most don’t. Get one done so that this doesn’t hold up an exchange of contracts, as most solicitors worth their salt will ask to see one.

It can take a while to organise, from booking an appointment to getting the survey done, written up and sent out. This all takes valuable time when the pressure is already ramping up towards an exchange.

Enquiries

In order to keep a sale moving forward, a seller would be well advised to go through all the agricultural enquiries with their solicitors in advance of agreeing a deal.

This could include: details of the fertiliser and manure applied on a field-by-field basis for the past five years; copies of the previous two years’ BPS forms; identifying any noxious weeds or pests on the farm, such as Japanese knotweed; and defining all boundaries and any responsibilities for maintenance.

These are complex, take time to fully answer and require accurate responses on which a buyer will rely.

Clean up

The old cliché of creating the best first impression still holds true, and simply sweeping the yard clean, filling in potholes on the drive or doing a little bit of strimming will help show that the farm is a good one.

Richard Nocton, partner, Woolley & Wallis