Brown Turner Ross

Agricultural Property

Farm Business Tenancies – Buying or Selling a Farm

Whether you are seeking assistance

• as a Tenant of an Agricultural Holding seeking to protect succession rights
• in buying or selling a freehold Farm
• entering a new Farm Business Tenancy either as Landlord or Tenant
• buying or selling a Single Payment Scheme entitlement
• with Grazing or Sporting rights
• with Short Term Lettings

you can rely on our specialist Agricultural Property Team for expert advice.

Succession Rights

Tenancies created before July 12th 1984 allow for two “successions” to close relatives who must be able to demonstrate that

• the land in question is their main income source and
• they do not have any interest in other land from which they can derive an adequate income

There are many pitfalls for the unsuspecting Tenant seeking to pass the Tenancy on to a loved one. Landlords will often seek to challenge the rights of succession because if they do so successfully they can regain possession of the land and let it under a Farm Business Tenancy on far more advantageous terms to them.

You therefore need expert legal advice before you try to effect any succession to ensure you do not put your otherwise secure entitlement at risk.

Single Payment Scheme entitlements can also be lost if succession is not carefully dealt with. These entitlements do not attach to the land. If a transfer of them is not properly planned they can be passed to a family member who does not satisfy the stringent conditions meaning the entitlement to them will be lost.

Buying or Selling a Freehold Farm

You should consider a wide range of key issues including the following

• a site visit to check boundaries, access and matters such as public footpaths and sporting rights are clearly defined
• that all relevant searches are conducted
• enquiries regarding Single Payment Scheme entitlements and ensuring “cross compliance”
• ascertaining whether Sporting Rights have been granted and whether they are to be included in any sale
• whether all access and drainage rights are adequate
• whether Water Abstraction Licences remain valid if they are applicable
• Nitrate vulnerable
• Employees
• Disease
• VAT

A New Farm Business Tenancy

Any Tenancy created after September 1st 1995 will be a Farm Business Tenancy if is actually stated to be one. There are no automatic succession rights with such a Tenancy.

There are few implied clauses for these Tenancies even if they are not set out in any documentation relating to the Tenancy so it is important that the positions of both the Landlord and the Tenant are protected. For example

• a poorly drafted Business Tenancy can create succession rights which a Landlord may not want
• Rent Reviews cannot be upwards only irrespective of what the parties agree

The issues that arise for a Freehold transaction will also apply here.