Buying and Selling Farms and Farmland

There are four main forms of sale: sale by private treaty; sale by auction; sale by informal tender; sale by in formal tender.

The term private treaty means simply that a piece of land or a property is being sold by one party to another without the help of an auction or tender process. The property is listed for sale with an asking price; the buyer makes an offer to the seller or the seller’s agent; the seller decides whether to accept the offer; if it is accepted the usual process of searches and enquiries then take place until the sale becomes binding at the point of exchange of contracts.

As with any other type of property one needs to look into the legal rights for dealing with services such as water, electricity, telephone, gas, drainage etc. and access to them. However, when considering the sale and purchase of farmland, water is perhaps the service that needs to be looked at most carefully - and which often throws up the most problems.

This is sometimes also referred to as an ‘Uplift’ or ‘Claw-back’ agreement. It provides for the buyer to pay extra, on top of the original purchase price, if and when certain events happen; for example, if the buyer increases the value of the land by obtaining planning permission.

This will depend on how long the arrangement has been in place and the particular facts of the occupation. Ideally the agreement will be documented. Further details will be needed if the occupation is pursuant to a verbal arrangement to ensure a grazier or tenant has not unintentionally been granted security of tenure. Sufficient notice will need to be given to a tenant to ensure vacant possession can be provided on completion, if applicable and if required.

Restrictions on the use of the land will be detailed in the property deeds or title register. In addition to the presence of any covenants, consideration needs to be given to whether those covenants are enforceable (a strict set of criteria applies). These are important issues and must be investigated fully to ensure the land can be used as intended.

In the absence of clear provisions concerning boundary ownership in the deeds / title register the boundary presumption, where a stream divides two parcels of farmland, is that the adjacent landowners will own up to the middle line of the stream on their side.

The majority of agricultural ties are usually imposed by a condition and/or by a planning obligation in a 106 Agreement. There are primarily two ways that an agricultural tie can be removed. The is to suggest to the local authority that the planning condition no longer forms a valid planning purpose and the usual route undertaken is to undertake a marketing exercise to seek to dispose of the property and if no purchaser comes forward, in the agricultural community then an application is made to the local authority to, in effect, remove the condition. This is dependent on a lack of interest in the property when marketed. 

Often a 106 obligation is also attached to the property. If there is no need for the imposition of the planning condition, an agreement can be reached with the local authority to in effect discharge the 106 agreement. Alternatively, if the 106 agreement is more than five years old then an application can be made under Section 106A to discharge the planning agreement.

Secondly, if the agricultural tie has been breached for a continuous period of ten years, then it is possible to make an application for a lawful development certificate to the local authority, this in effect makes lawful a breach of the occupancy condition on the basis that it is immune from enforcement action. This approach will render a current use of the premises lawful, but should the use revert back to agricultural, then the original tie will be re-implemented.

Yes. Fishing, shooting and hunting rights can be sold separately from the land. It is not uncommon to find property for sale but where these sporting rights already belong to another party and are not included in the sale.

Yes. Rights of way can be limited to the extent to which the land being accessed is to be used.