Buying and Selling Agricultural Land

When buying or selling agricultural land, the process can be a long and complicated one. There are a number of aspects that are involved, and so things such as conveyancing, deeds, titles, and boundary disputes all need to be taken into consideration. Unlike transactions involving domestic properties, there are some unique challenges involved in agricultural land changing hands.

It is therefore important to someone with expert knowledge involved to take you through each stage. At Lovedays Solicitors, we have experience in dealing with the sale and purchase of agricultural land and can make the entire process much easier and less stressful. We can provide specialist understanding to ensure that the transaction runs smoothly, and you can avoid any of the typical pitfalls. 

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Understanding Agricultural Land in the UK

In the UK, agricultural land refers to any bare land which is used for the purposes of agriculture. This can include land that is used for horticulture, fruit and seed growing, dairy farming, livestock breeding and keeping, grazing, meadow land, osier land, market grounds and nursery grounds. The term also applies to woodlands where the use is ancillary to the farming of land or other agricultural purposes. 

Agricultural land can cover a range of sizes from a commercial enterprise to a smallholding, and may include a house, outbuildings or other surrounding land. If there is woodland involved, this can be used for forestry purposes or as a natural wildlife habitat. Any land defined as farmland will refer to space that is used for things such as crop production, livestock grazing or horticulture. 

Before purchasing agricultural land, you need to carefully consider how you intend to use it. If you intend to change its primary purpose or any infrastructure that is in place, then you might need legal permission to do so. It is also important to consider restrictions or covenants on the land that might limit what you are allowed to do with it.

There may also be environmental regulations relating to water quality, soil conservation or wildlife protection and certain activities might require specialist licences or permits. It is therefore important that you understand your goals and aims for the land and get your solicitor to research the land in question to find out whether the land will be suitable for this. 

The majority of agricultural land in the UK is now registered, however, this does not apply to all of it. In order to purchase unregistered land, you will need to conduct some detailed research in order to ensure that the owner has the legal title to sell the land.

Steps to Buying Agricultural Land

When purchasing any agricultural land, it is important to check who owns the land and whether there are any legal considerations such as a right of way, or limits on building or altering property. You may find that there are more restrictions if the land falls within a protected area such as a National Park or Area of Outstanding Natural Beauty. 

You will also need to understand exactly where the boundary of the land lies. It is also important to understand factors such as the type of terrain, access restrictions, the soil quality and the drainage of the area, as this can all affect the way in which you plan to use it. In addition to this, you should be aware of any other aspects of the land that cannot be changed, such as power lines, cables, pylons or telegraph poles that you will be required to work around. 

As part of your research, you should also look into the past use of the land as well as the present. An Agricultural Land Search will allow you to see if there are restrictions on the crops you can grow or the animals that can graze in the area. You should also be aware of any planning applications that might affect the land. 

At Lovedays Solicitors, we can perform all of these checks for you to help build a full picture of the land that you are interested in. This helps you to have full transparency with regards to your purchase, and you can be confident that you are putting your money into land that will meet your requirements. 

The way in which you intend to finance the purchase of agricultural land also needs to be thought about, as it can be complex. Banks and lenders tend to be much stricter over the lending criteria for agricultural land than they are for residential property, and so they may require a much larger down payment, and in some cases, they can ask for evidence of your farming experience as well as your business plan and income details. 

Once this is all in order, we can ensure that all paperwork is brought together in order to complete the transaction. At Lovedays, we can put everything together for you, to ensure all of your searches and applications are completed professionally and correctly. This will help the purchase to run much more smoothly and with fewer delays.

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Key Legal Considerations in Purchasing

By law, all agricultural land must be registered on the Rural Land Register (RLR). The title deeds will also need to be registered with HM Land Registry. The title deeds will show the chain of ownership for the land and can include conveyances, contracts for sale, wills, mortgages and leases. This is now kept digitally, so it is not necessary for anyone to keep paper copies and they can be easily accessed should you need to show your ownership status, rights or boundaries. 

There are a number of environmental regulations which can apply to agricultural land, including Farming Rules for Water, Storage of Silage, Slurry and Fuel Oil (SSAFO) regulations and Nitrate Vulnerable Zones (NVZs). It is important that you are fully aware of which ones apply to your land and activities and how this will impact on your purchase. 

Agricultural land is also subject to planning regulations, which you will need to be aware of if you plan to build or extend any properties or fences. You also need to be aware of what the land is currently used for and whether there are any restrictions on changing this before you sign on the dotted line.

Selling Your Agricultural Land

When it comes to selling your agricultural land, you will need to show it in its best light. Where possible, ensure that it is in good condition, that all boundaries are intact and that gates are secure. You will need to agree what condition the land will be left in, such as having harvested crops or removed livestock. 

It can be difficult to put a value on agricultural land, as it presents such a wide number of possibilities. It is therefore important to not just take into consideration the current condition, size and use of the land, but also the future opportunities it can present, which may lead to an uplift in value. For example, the granting of planning permission to allow future development, may lead to the land holding a much greater value, and the price should therefore reflect that. 

When considering the value of the land, it is also important to think about any restriction on the space that may negatively impact its value. These may relate to its use, environmental restrictions or rights of way, as they could prove to be a barrier to some potential buyers.

The value of your land will also be determined by its productivity, commodity prices, any crop shares that may apply and the rate of return. By weighing up all possibilities, it is much easier for the experts at Lovedays Solicitors to help devise a fair value for all parties. 

Once the land is ready and the valuation has been set, you can then think about marketing the land. Make sure that your contract pack is in order so that interested buyers can have all the information that they need to make an informed decision.

You should ensure that some high-quality photographs are taken to show all that the land has to offer and create detailed plans of the land and any properties within it. You should also list all of the services and amenities that the land benefits from to ensure that you not only attract buyers, but the right type of buyers.

Legal Aspects of Selling Agricultural Land

When selling agricultural land, you will need to put together a contract for sale which sets out everything that has been agreed with the buyer. These special conditions could cover the treatment of grants, schemes and entitlements, what is included within the sale and whether the land and property is sold with vacant possession.

Leaving anything on the farm that has not been formally agreed, such as old machinery, livestock or rubbish may leave you in breach of giving vacant possession. The contract will also include standard elements such as the deposit that needs to be paid, the timing of the exchange and completion of contracts and any insurance that might be in place. 

It is important that you are fully aware of the tax implications that can come with selling agricultural land. In many cases, you may find that you are subject to Capital Gains Tax at a rate of 28% unless the seller qualifies for Entrepreneurs’ Relief. It is also important to consider the apportionment of the sale price between the house, if there is one, and the land in order to maximise the Principal Private Residence Relief (PPRR). 

When contracts have been exchanged, the transfer deed will need to be drafted and agreed between all parties. This is the formal document which will transfer the ownership of the land when the contract is completed and can be drafted by Lovedays Solicitors. 

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The Role of a Solicitor in Land Transactions

As the sale and purchase of agricultural land can be lengthy and complicated, it is important to seek professional legal advice every step of the way. This will help you to understand what factors will affect the transaction, and how regulations, covenants, rights and restrictions can all impact on the use and value of the land. An experienced solicitor can represent you through all of this and conduct any necessary research and searches on your behalf to ensure that you have the fullest possible picture at all times. 

Your contract will need to be very detailed, and so you will require a solicitor to draft this for you and review any changes that are made. This will help to ensure that it is correct and fair and will also guarantee that it is a legally binding contract. By seeking help and advice from a solicitor who is knowledgeable about the agricultural sector, you can also be confident that the land transaction will be compliant with any relevant agricultural law. 

The solicitor can also draft transfer deeds and liaise with lenders by carrying out due diligence checks. This means that any concerns can be raised, and plans can be put in place to help satisfy the lender. 

Once the sale has been completed, a solicitor can deal with the other formalities, including discharging all borrowing as well as any money owed to HM Revenue & Customs. They will also ensure that an application is made to the Land Registry to register the legal ownership of the property.

Lovedays Solicitors: Your Partner in Agricultural Land Transactions

At Lovedays Solicitors, we have many years of practical experience in dealing with agricultural land transactions. We have specialist agricultural lawyers on hand who can help you with the sale or purchase of any agricultural land, no matter what its size or type may be.

We have spent many years developing an in-depth knowledge of the sector, putting us in the best position to represent you effectively. We can offer expert advice and have a good understanding of the unique factors that can impact on the sale or purchase of agricultural land, including the restrictions and regulations that may be relevant. 

The sale of agricultural land is very different to any other, and so it requires specialist knowledge. We understand that no two sales are the same, which is why we pride ourselves on offering a personalised service that is tailored to your precise needs.

We will take the time to understand your needs and goals to help guide you through a transaction that is best suited to you. By having our friendly and experienced team on hand, you can avoid much of the stress that is often involved in an agricultural land transaction, and we can help to minimise any delays to ensure that the process runs as smoothly as possible.

Conclusion

Buying and selling agricultural land is not always straightforward, and that is why Lovedays Solicitors are here to help. We can help you to understand the regulations and restrictions that you might be subject to, conduct your searches and draft your paperwork to make sure that your transaction is dealt with by experienced and dedicated experts at all times.

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