Issues With Selling or Buying a Farm
As we bid farewell to the winter months, the snowdrops are out, spring has sprung and we are beginning to see the start of land and farms coming to the property market.
“There are a multitude of things to take into consideration when selling your farm, together with a number of issues that will require careful deliberation. Two such issues, which are not immediately apparent but may have an impact on a sale are, the issue of paying for ingoing’s and add-ons as well as the technical issue of Listed Building Consents,” explains Tim Parsons, Director at H&H Land and Property.
Here Tim gives some further background:
In the case of ingoing’s and add-ons, the issue here is that when a property is launched onto the market, agents can sometimes include items, which a buyer is required to purchase in addition to the basic property price. These can include amongst other things growing crops, Basic Payment Schemes (BPS) entitlements, pits of silage or other crop in store such as straw. Often these items are required to be purchased separately, based on the valuations at the time of completion. This in turn can result in complications for the buyer. Not knowing exactly what the additional costs will be until valuation day can make it difficult for buyers to budget for how much to borrow or to secure the necessary funding.
From a sellers point of view the implication of including ingoing’s and add-ons is that it can potentially delay completion. So, when selling, it is all about transparency of what is included, simplicity and certainty. The more certain information that can be given at the beginning of the process, rather than towards the end, will aid a smoother sale. By doing this from the outset, the buyer will know what they are buying, what is included in the sale and what they need to budget for, ensuring a smooth and trouble free process for both parties.
Listed Building Consents are another issue often overlooked when readying a farm for sale. Although not applying to all properties anyone purchasing a listed building must ensure that any work, which has been completed, has been granted the necessary ‘Listed Building Consent’ for all works completed. Listed Building Consent in simple terms is required for any works of demolition, alteration or extension carried out to a listed building. Anyone who does not have Listed Building Consent for works completed to a listed building is breaking the law; this can have significant consequences as it constitutes a criminal offence, as opposed to just a planning offence.
Listed Building enforcement action is not time limited. So, for instance, if you bought a property, which is listed, and it did not have the proper consent for alterations, such as double glazing or a wall knocked down, you will need to secure retrospective consents. Obtaining retrospective consents can be both a long and arduous process, and in the event of it not being secured, it can be very costly to remedy the issues.
One of the first things a solicitor will look for from a seller when a listed building is being acquired are all necessary consents, so from a selling point of view, it is imperative that you make sure that the necessary consents are in place before placing the property on the market. If you are the buyer, you just need to check through the paperwork with the proper authorities prior to signing on the dotted line.
To conclude, Tim says "if you are thinking of selling it is important to plan your strategy early and ensure that all of your paperwork is in order. Proper planning and preparation from the outset will certainly help to ensure that any potential issues or delays are ideally avoided or at least minimised.
"Help and guidance is readily available for both buyers and sellers, but if you are at all unsure about any aspect of selling or purchasing farm property, it is worth discussing your concerns with your agent. It is in everyone’s interest, where possible to address any issues before they arise."