Farmers and lawyers disagree over mandatory farm transfer rules

Farmers and solicitors’ groups agree that separate legal advice is advisable for all parties in a farm transfer, but they disagree on the need for mandatory new rules obliging both sides to engage a solicitor.

The ICMSA has criticised a Law Society proposal to upgrade its current guidance for separate solicitors up to new mandatory rules. A task force is discussing this proposal with all relevant parties.

ICMSA president John Comer accepts that having two solicitors is necessary in contentious farm transfers, but would be an unnecessary extra expense of up to €4,000 in “friendly” transfers, as is the case with 99.9% of voluntary transfers. Thus, he does not want the Law Society’s guidance on this issue to become mandatory.

In reply, John Boylan, of Cork-based solicitors McNulty Boylan & Partners, said: “I note that Mr Comer accepts that there are occasions where undue influence is brought to bear on parents who are transferring the farm to one or more children. He says that he feels it is rare. I disagree.

“In my experience and in the experience of a lot of my colleagues, pressure is put on older farmers to transfer a farm in a significant number of situations. In all situations where a farm is being transferred, it is very important that the future needs and finances of the farmer transferring the farm are catered for.

“This may include rights of residence or other provision of accommodation for them, their tax needs, their income needs and their health needs and requirements. The spouse of the farmer (elderly or otherwise) also needs to be looked after.”

Mr Boylan cautioned against cases where insufficient money has been set aside to pay to keep an elderly farmer for a longer- than-expected stay in a nursing home. He also cited the need for separate legal advice relating to the farm transfer for the new entrant farmer and his/her spouse.

Mr Boylan also said the solicitors’ fees would be far less than €4,000 in a farm transfer between family members. He said engaging separate solicitors was necessary to give “peace of mind” to both sides for the rest of their lives.

Mr Boylan added: “I agree with the Law Society directive that a solicitor should not act for both sides as there is a conflict of interest. Sadly, when people get older they are more open to being influenced and in some cases bullied into making decisions that are not in the interest of their welfare or financial circumstances.

Meanwhile, the ICMSA’s John Comer recalled that two solicitors were not needed for the transfer of his own family farm back in 1996. He said any extra independent advice can be had by engaging a second solicitor on an hourly basis rather than taking on two representatives.

As regards nursing home provision, Mr Comer said this is covered by the Fair Deal scheme, which allows the State to recoup the costs of nursing home care by taking 5% of the value of farmer’s assets after his/her death.

Mr Comer said: “We agree with almost everything the solicitors are saying except that we don’t want it to be mandatory. What we are talking about are land transfers between a father and his son or daughter which can be done with the minimum of fuss.

“The Law Society is talking about bringing in a statutory instrument. The mandatory rule is like taking a sledge hammer to crack a nut. If farm families wanted to have both parties in the transfer represented by solicitors then it should be entirely up to them and most certainly not on the diktat on the Law Society.

“Farmers would be absolutely astounded to be told that because the Law Society was not satisfied that its members could represent both parties in an amicable, parent-to-child, farm transfer that they — the farmers themselves — would now be expected to bear the cost of the Law Society’s misgivings by hiring another firm of solicitors.”

In response to comments made by Law Society president Ken Murphy in yesterday’s Irish Examiner, Mr Comer said the ICMSA had fully engaged with the task force. He said farmers, in general, and the ICMSA in particular, were not in any way beholden to the Law Society and were engaging with them purely out of advocating the interests of family farms.