10 legal tips for buyers of agricultural land

If you succeed at auction, you will need to sign the contract immediately, says Karen Walsh.

Look before you leap, check out these legal steps before signing for a land purchase.

Do you have access?

It is impossible to over- emphasise how terribly important access rights are.

Be certain that permanent, legal, transferable access is specified in the deed.

Never buy any piece of property without that.

There is no point in the friendly neighbour assuring you he has no objections to you using his land to access your land.

A minor disagreement with that man, or his successors in title, and all that could change in the blink of an eye.

It is important to obtain a structural survey if there are buildings on the agricultural land, or if there is a dwellinghouse passing with the property.

A pre-purchase survey gives you an independent assessment of the overall condition of a property.

It identifies any aspects of a building that may need repair or replacement.

It allows you to make an informed decision.

When problems or defects are identified, it does not necessarily mean that you should not buy the property, but you will know in advance what to expect. If you have a tight budget or do not wish to become involved in any renovations or repair works, having this information will be essential to you.

Instruct an engineer to carry out a planning search and to confirm that the boundaries of the property on the ground are comprised within the map.

The cost of an engineer in advance of purchasing can save you thousands in the long term.

Contact your solicitor to carry out a full investigation of title.

Your solicitor will ensure that the vendor has full power to sell, and that you will have no trouble becoming the registered owner and selling the land at a later stage.

Be organised.

If you are obtaining a loan, furnish all information requested to your bank as soon as possible, to avoid delays at the drawdown stage.

Failure to timely organise such things as direct debit mandates, identification, buildings insurance etc, as required, can often cause delays in completing a lending transaction.

To draw down your mortgage cheque, you must have mortgage protection insurance in place, which can take time, particularly if you have had previous health issues, and you should attend to this immediately.

Ensure that the address of the property and acreage of lands to be charged in favour of your bank and the folio number are correctly referred to in the Letter of Loan offer, to avoid delays at the drawdown stage.

Budget. For a commercial mortgage, the bank will appoint their own solicitor to represent their interest in the transaction, and you may be responsible for this fee.

Be sure to factor into your budget any stamp duty, legal fees and Land Registry fees to complete the sale.

The Deed of Transfer will need to be stamped with the Revenue Commissioners and lodged in the Land Registry, to register your title. Stamp Duty is 2% of the purchase price of non-residential land and 1% of the purchase price on residential property with a value of up to €1 million. If you qualify for Young Trained Farmer Relief, you will not have to pay stamp duty on the non-residential portion.

Buying land at auction?

Preparation is key. You should view the property. Instruct your solicitor well in advance to get a copy of the Contract for Sale and title documents.

Once you sign the contract at auction, you are legally bound to complete the sale.

If you succeed at auction, you will need to sign the contract immediately and pay a deposit there and then. The deposit is normally 10% of the purchase price. You will normally be required to complete the purchase within four weeks of the auction. Once you have exchanged contracts, you are legally bound to buy the property, and if you do not complete within the four-week period, you may lose your deposit, and can be sued for your failure to complete.

It is critical that finances are in place prior to bidding.

If you follow these tips and obtain competent legal advice, you cannot go far wrong, and it will hopefully be one of your better farming business decisions. As Mark Twain said, “Buy land. They aren’t making any more of the stuff.”

While every care is taken to ensure accuracy of information contained in this article, solicitor Karen Walsh does not accept responsibility for errors or omissions howsoever arising, and you should seek legal advice in relation to your particular circumstances at the earliest possible time.


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