Top tips for preparing for a sale of agricultural land

Farmers are increasingly deciding to sell their farms for a variety of reasons. They may wish to retire, and their children do not necessarily wish to follow on in the family profession or they may wish to sell their farm to a developer.

However, there are a number of issues from a land law perspective which can affect the sale of farm and should be considered in advance of a buyer being secured to avoid unnecessary delays to the sale.

The below is a non-exhaustive list of points which should be considered before marketing a farm for sale:

• Covenants – which stipulate what you cannot do and what you are obligated to do in relation to your farm. An example could be a restrictive covenant which prevents development on your farm, which would cause issues if you were intending to sell to a developer for development purposes. You would need to contact the party which benefits from the covenant and request they release you from the covenant so development could take place and the sale proceed.
• Easements – rights that could benefit or burden your farm, as well as having a full understanding of what easements benefit and burden the farm.
• Restrictions – the title of your farm might be subject to a third-party restriction which prevents the sale of your farm proceeding without the consent of the third party. we would recommend contacting the third party in advance of a sale to ascertain their requirements for providing consent to the sale to avoid causing delays.
• Tenancies – is your farm subject to any tenancies, and if so, is a potential buyer seeking to purchase your farm with vacant possession? If you are permitted under the tenancy, you may choose to start the legal process of evicting the tenant to ensure your farm can be sold with vacant possession if this is required by your buyer.
• Boundary discrepancies – walk your farm boundaries and check whether they comply with the title plan for the farm. Identify any discrepancies so they can be resolved.
• Unregistered land – is your farm unregistered and if so, do you hold all the title deeds for the property. You should check whether the deeds you have for your farm sufficiently prove your ownership of the farm to the satisfaction of a potential buyer.
• Charges – your farm might be subject to a current or historic charge for a mortgage which will need to be removed as a part of the sale. You would need to contact your bank for their requirements for the removal of the charge.

A failure to consider and deal with the above in advance of the sale of your farm could end up delaying your sale and subsequently risk you buyer withdrawing from the sale.

In addition, there are other points to consider outside of land law when selling a farm, such as:

• Future of employees- are they to remain following the sale or be made redundant
• Tax implications – how will the sale of your farm impact your tax liability
• Lifetime planning/Wills – will you need to update your Will following the sale of your farm
• Farming partnership implications (if applicable) – how would the sale of the farm impact the farming partnership agreement if you do not sell the whole of the farm, will it need to be updated
• The farming company’s structure (if applicable) – will the sale of the farm impact the structure of the company if you do not sell the whole farm, would the sale be a good opportunity to update and amend the company structure.

Contact our Agricultural Law solicitors today

If you are considering selling your farm but believe you would benefit from legal advice in relation to the above, then please get in touch with a member of our Agriculture and Estates team or complete this online enquiry form, and we will be happy to assist you with your enquiry.