Emotional conflict one of the snags that can derail a farmland sale
The selling of agricultural land which a farmer has put a large amount of time, money and effort into can be an extremely daunting process.
Preparation is needed to limit complications and ensure a timely close of sale.
Before a farmer or landowner begins the sale process, it is important to ensure that they are emotionally ready to part with the land.
If the land has been inherited from a deceased family member, they will need to consider whether this may violate their memory in the eyes of the seller.
Or perhaps if the landowner has their own family, is this betraying their expectations of receiving the land at a later stage, or bringing a likelihood of conflict? These are real issues solicitors deal with every day, and it is essential to examine these matters before the land goes on the market, so that emotional conflict will not derail an intention to sell, at a later stage.
If there is a tenant on the property, or renting the land, they will need to be served with a valid notice of termination of tenancy and afforded sufficient time, as per their legal entitlements, to vacate the property or land.
The next step which should be taken is to locate the title deeds relating to the land being sold.
The deeds may be with a solicitor or, if the property is mortgaged, are usually retained by the financial institution.
The title deeds should then be passed to a solicitor in order to establish good, marketable title.
This should be done as soon as possible, to ensure there are no defects with the title.
If the seller becomes aware of inadequate title at an early stage, then there is time to rectify any problems, so that a potential sale will not be delayed or lost.
If the seller of land is in negative equity, written consent will be needed from the bank for the sale.
This usually takes months, so it is prudent to apply for it immediately, to avoid any further delays.
The solicitor acting for the seller will then need to be supplied with planning documentation for all buildings passing with the land.
If same are not to hand, copies can be obtained from the local authority.
If the buildings were constructed prior to 1964, it is not necessary to furnish planning documentation.
If constructed after then, it will be necessary to furnish the purchaser with certificates of compliance with planning permission and building regulations.
If buildings are exempt from planning and building regulations, a competent engineer will need to certify this.
If there is a building constructed on the property that does not have the benefit of planning permission or is not exempt, then it will be necessary to instruct an engineer to lodge an application for retention of planning permission.
This stage of the process can often delay the sale of land, so it is important to do as much preparation as possible prior to the commencement of the sale process.
An application for retention of planning permission can take at least two months to finalise from the date it is lodged.
After all planning permission documentation is furnished to the solicitors, they will be able to advise as to the next step.
It is essential that the maps of the land and property being sold are checked, to ensure they accurately reflect the property being sold.
If the land in question has access through a right of way, this will need to be registered.
Assurance from a neighbour is insufficient, and may cause trouble for the buyers down the line, when seeking a mortgage, or to transfer the land.
Too often, landowners’ opinion of the value of land is based on local talk, or what a neighbour received for their land. Landowners should seek independent market valuation for their land.
It is also important to consider how you wish your land to be sold.
Land can be put up at an auction, where the sale price is decided by the highest bidder, or it can be sold through private treaty, where the vendor or vendor’s auctioneer agrees the price.
It is also advisable for the vendor to consult their accountant or tax consultant in advance of selling, to ensure they are made aware of any potential capital gains tax liability.
