Bates Wells & Braithwaite Agriculture Services

If you are a farmer or landowner there are inevitably times you need a solicitor to assist with property transactions or advice. For disputes Tim Parsons from our Dispute Resolution department can assist but our non-contentious property work is carried out by Robert Sainsbury.

Robert has over 30 years’ experience of property work in East Anglia, as a member of the Agricultural Law Association and having provided agricultural property law up-dates to the Cambridge Law Society. He is approachable, friendly, efficient and knowledgeable and will be able to provide you with cost effective assistance when needed.

See our Agriculture Services below;

AGRICULTURAL SOLICITORS
Freehold Sales and Purchases

We can act for you on your freehold purchase or sale of agricultural land; farms; development sites; farm cottages; and buildings for conversion, or that are already converted. With over 30 years of real property experience Robert Sainsbury will be able to support you and your other advisers, and complete your transaction, in a friendly and approachable way.

We may not always be your first point of contact for a property transaction but we are pleased to be involved at an early stage to try and make it more straightforward later.

Purchase

On a purchase we can support your Land Agent and Negotiator in agreeing suitable Heads of Terms and realistic timescales. Once these have been agreed we can let you have an estimate of costs, expenses and taxes (Stamp Duty Land Tax – SDLT) on your transaction and a realistic timescale from receipt of a full set of documentation from the Seller’s solicitors; we will check the title, raise enquiries, submit and examine pre-contract search results and deal with the negotiation of the contract documentation to make sure your transaction has a realistic timescale and runs, where possible, to plan. We provide face to face meetings locally, if need be on site to check boundaries or aspects only clear from a site visit and provide, where time allows a full written report so that you understand the legal aspects of your purchase; the documentation and the property. If there is insufficient time to do so before the contract signature meeting we will confirm the advice given before and at that meeting by a confirmatory report on title as soon as practical thereafter. If there are particular aspects of the procedure, in relation to the legal aspects of the property or where you might need to consider seeking other advice and assistance we can suggest where you can find that help and more in depth discussions. We can act for the lenders in many transactions (though that is the lender’s choice) and for you in providing the required report on title to the lenders that the property has a marketable title (or where there are particular areas they need to be aware of), in preparing security documents and to prefect that security by registration, later.

We will need to liaise with your Accountants and/or Tax Advisers on some aspects of the purchase in most cases and your Land Agent, who will value, survey and examine the property, and also be involved in assessment of the Basic Farm Payment and whether it has been correctly applied for to date, whether there is any risk of claw-back or future action for non-compliance, and whether the Basic Farm Payment Entitlements are fully transferable. In the future, these arrangements will be changing, of course. 

We will want to see any valuation, survey, assessment of the property, and of the Entitlements, and any reports relating to them as soon as they are available.

An outline of a transaction:-

We will need to meet with you to obtain essential identification evidence face to face, get a picture of the transaction, the property and intended timescale, how it is to be financed and the source of your funds.

We will let you have our initial client care letter and estimate of fees either before the initial meeting or more likely following it, when we understand the transaction proposed. The initial details can often be taken over the telephone or by email. If we receive those initial instructions by telephone or email we will however rarely be able to act for clients we have not met and cannot act without full verified ID and confirmation of the source of funds.

We will need to obtain Identification evidence to set up a file because that is part of our duty under Government requirements and as part of the Land Registration anti-fraud regime where we are required to act as “gatekeepers”. The majority of the money laundering and anti-fraud procedures rely on our knowing you and the source of the funds for your purchase.

You will no doubt have already liaised with your own Agronomists and Land Agents in making an assessment of the land/Farm and its value. We will need their details in order to liaise with them throughout the transaction. If there are buildings, farm houses etc., you will need (and should have arranged) not only valuations, but a survey of those. This ensures that you know as much about them as practical, their structural integrity, their value as a marketable and useable building, and any short to medium term repairs, alterations, improvements or essential actions that need to be taken, which could affect their value to you, and in the market.

Any valuation for the lender (if any) will take place as part of setting up your financial arrangements, but generally it is stated in that valuation that it is for the purposes of the lender only, and should not be relied upon by the Buyer.

You will need to ensure the Lender’s instructions are received by us in sufficient time to ensure before exchange of contracts you can fulfil them, otherwise you are committed to the purchase and payment of monies without knowing they will be released by the lenders as required and to time. On receipt of the instructions from the lenders we will complete the investigations they require, and any pre-exchange clearances, which are generally run contemporaneously with the pre-contract negotiations and investigations we are carrying out for you. Usually, we will be provided with a copy of the valuation of the property, and will need to check that, and ensure that any aspects highlighted by the valuer are dealt with, reported on, or investigated further, as needed.

Sometimes a lender will use their own independent solicitors and we will need to liaise with them to make sure all their enquiries and requirements are fulfilled (or can be) before you are committed to the purchase by an exchange of contracts.

We will need to make contact with the Seller’s solicitors who will forward a draft contract package, including title, draft contract, and frequently replies to standard pre-contract enquiries. We will need a plan as part of that package, either from the title or if this is a sale of part of the property a Land Registry compliant plan prepared professionally for the Sellers, so that we can on receipt of confirmation of instructions from you and funds to cover expenses we can submit the usual and agreed searches.

The legal transaction is now underway.

On receipt of the valuation or survey report, which you may have to pass on to us or will be forwarded by your lender, replies to enquiries and receipt of the search results we will want to check through these and the title to see if there are aspects of the property or transaction you need to be aware of; might be of concern; where you or we, or your lenders (if any) need more information or clarification or further documentation, which in some cases we may need to obtain from the Seller’s solicitors or sometimes from third parties, such as the local authority. We may advise you of concerns that could change your view of the value of the property, about which the lenders will have to be informed if it affects the marketability or valuation of the property now or in the future; where further investigations, by way of example, a further survey, structural engineers’ report, the advice of a Planning Expert, your Tax Advisers or even an Environmental Investigation, might be needed. We may recommend these as precautionary or protective measures for you alone, even if the Bank or other lender does not think they are needed. There may be issues raised by your Land Agent or Argonomist investigating the Basic Payment Entitlements and the documentation supplied by the Sellers and the Seller’s solicitors in relation to this.

The due diligence relating to the transfer of the Basic Payment Entitlements is a matter dealt with by the Land Agent or Agronomist you employ in that connection, as these are not strictly legal matters, but there will be provisions within the contract for the transfer of the Entitlements, cross warranties, and there may be agreement for a deposit or retention against the transfer of the Entitlements, depending on timing, and the negotiating restraints of the respective parties.

All of these aspects of the legal investigations arise because of the basic principle “buyer beware” which means, in part, because of the use you might require for the property, the investment you or a lender is making and because generally property is (but not necessarily always) a fairly safe, solid investment, with more moderate risk, you will want to know what you are going to buy and whether, legally, at this point it is considered to have a marketable title and also for your particular use or purpose, will it be suitable?

We will at the same time be liaising with your other Advisers, for example Accountants, Tax Advisers, Land Agents, Agronomists and Property Surveyor/Valuer to make sure they have the information about the property relevant to it value, tax for the transaction and statutory compliance, planning and use issues, that have been revealed in our legal investigations/due diligence.

The timing of exchange of contracts, and the eventual transfer of the property will often be linked to field work, harvest, storage etc., and this can often mean that the contract includes Early Entry provisions (for which an enhanced deposit might have to be paid), and/or holdover of crops to be harvested, stored etc. An agricultural contract for the sale or purchase of land or a farm will sometimes include additional provisions relating to this.

Another additional aspect of agricultural purchases and sales is the inclusions of provisions relating to environmental grants and subsidiaries, which will have to be carefully provided for, balancing the risk to the respective parties.

There are some other aspects of agricultural property, which may be more significant than in general freehold purchases and sales; for example, Chancel Repair Liability (which is potentially significant in many transactions, but may move, so bearing in mind the area of agricultural land involved); copyhold and other reservations in respect of mines and minerals; old rent charges; rights of way; and rights in relation to utility equipment, services and even military pipelines etc. Commons registrations and village greens, footpaths, bridleways and rights of way may also be more relevant to a transaction such as this in the countryside. 

We will negotiate the contract and often the transfer document (the final legal document transferring the property to you) and prepare our report to you.

These are not simple matters and they take time. Please, therefore, make sure that you consult with us early enough to ensure you will have sufficient time and have in mind and have agreed a realistic timescale and target date. You will want to ensure you do not commit to expenditure or arrangements which cannot easily be adjusted, cancelled or rearranged without a cost to you. There is no legal certainty until exchange of contract and all this due diligence investigation and preparatory work to carry out before that stage is reached, so you must not commit to timescales and expenditure based on ‘subject to contract’ negotiations and target dates, without appreciating the risks involved and having a ‘Plan B’ fall back position.

We will prepare, when time allows (and preferably it will), a full written report on the legal aspects of the purchase and the property and usually meet with you to run through that report, before obtaining your approval of the transaction, property and contract and signature to it ready for exchange of contracts. If there is insufficient time to prepare this written report before the signature meeting our report will be sent, confirming the advice given at the meeting as soon as time allows afterwards.

Real property transactions require a written contract, hence the importance of “exchange of contracts”, which means you will not be committed until all these matters have been dealt with, but neither will the Seller; either to sell to you, for the price agreed and with the completion date you are targeting.

You will need to consider and if necessary ensure that you have insurance set up ready for exchange of contracts as usually the property will be at your risk from that point. For open or bare agricultural land, this may only involve extension of your existing public liability and other insurance to cover these additional fields. Please make your initial arrangements for insurance early and if your lenders, or you, are intending to back borrowing with life insurance please also make sure you make those arrangements early so that last minute requirements of the insurers (for example a medical report) will not lead to a delay in exchange.

On and from exchange you are committed to the purchase and completion on the date set, so everything needs to be in place and ready, whatever (generally) may happen from then

When everyone is ready, the lenders (and sometimes their solicitors) and you are comfortable with the transaction, the property and timescale, contracts, now agreed, will be signed by the parties, the deposit, which is usually 10% of the purchase price, collected and we will “exchange contracts” between solicitors. Always be careful not to sign anything before this point which might amount to a contract and bind you to something you are not yet ready for. The preparation for and exchange of contracts should always be between solicitors, unless it is the unusual circumstance of a sale at auction, where special rules apply and on which you should seek early and full advice from us before considering a purchase at auction.

On exchange of contracts you will have committed to the purchase and that will include the deposit you have paid and the completion date, which is when you will pay the balance of the monies and can obtain access/take over the property.

From exchange of contracts we will carry out final title searches, submit the report on title to the lender to obtain the monies the day before completion, and let you have our invoice and statement showing what will be needed to complete the transaction; pay any SDLT; pay the balance of the monies or make up the difference  between the Lender’s advance and that sum, including Land Registry fees; have legal charge documents and transfers executed and generally set the transaction up ready for completion on the date agreed in the contract.

Following exchange of contracts, your Land Agents or Agronomist will be taking steps in relation to the transfer of the Entitlements, and we will need to liaise with them concerning these arrangements and their progress, particularly if a deposit is being retained by one party or the other’s solicitors against the final transfer of the Entitlements.

On the completion date the balance of the monies will be paid and the title documents and transfer dated with the Sellers’ solicitors sending these to us following completion.

Sometimes exchange and completion will take place on the same date.

We will then submit the SDLT return within the 14 days required and the registration within the priority of our search result and on completion of the registration will send you a copy for checking and send the essential title documents to the Lenders in accordance with their charge over the property or retain the deeds if we have a storage agreement with you in our strong-room, letting you have our file closure letter at that point.

We may also have needed, during the transaction, to liaise with your Accountants, who may in turn have had to liaise with the Seller’s Accountants in relation to tax aspects of the transaction, including VAT and Capital Allowances. Further steps may have to be taken by your Accountants, following completion of the purchase in this respect.

Sale

On a sale we are also happy to assist from an early stage, and it can have real benefits for the transaction it you make contact with us at an early stage, let us know your intentions, hoped for sale arrangements and timescales. We can advise on the availability and possible whereabouts of deeds, registered title and other necessary documentation. We can review with you early on the standard agricultural property enquiries used on most agricultural property transactions, and you can seek out and obtain documents such as planning documents, Building Regulation approvals, Fire Risk Assessments, EPC’s and Recommendation Reports, Asbestos Reports, your Entitlement information, Agri-environmental agreements, wayleaves, easements, telecoms licences or Leases, and other standard documentation that the Buyer’s solicitors will be expecting, and might take time later in the transaction to locate, or which you may not have and so need to obtain, for example, from third party sources and then to pass on to us.

Early preparatory work can sometimes save time and delays later, but there will nearly always be something unexpected or un-thought of that arises during the transaction, either because of a lawyer’s requirements, surveyor’s or lender’s queries or requirements which were not or could not be anticipated or might not have been considered of significance when the sale documentation was being prepared. However, early preparation will always help.

You will want to discuss the arrangements for the sale with your own Land Agent and Property Agent, but you will also want to talk to your accountants and tax advisers to ensure the tax implications are understood and planned for. There might be timing issues and very occasionally a better structure to the sale but in all cases you will need to budget for the tax implications if any. There are standard agricultural/commercial enquiries about Capital Allowances and VAT as well as Stamp Duty Land Tax that will need to be referred to your Accountants and Tax Advisers in any event to make sure replies given are accurate and prepared with care.

An outline of a transaction:-

Discuss the proposed sale with your accountants and tax advisers.

Seek your preferred Land Agent and Selling Agent.

Seek out your preferred solicitors – hopefully BWB! Often the first the solicitors hear about an intended sale is when a Buyer has been found and then there is surprise that it takes time to put together all the legal documents and the “contract package” ready to send out to the Buyer’s Solicitors. The time to instruct your solicitor is as you place the property on the market so some of the simple preparatory steps can be taken, not when the Buyer is found.

We will send you the standard agricultural property enquiries for consideration. on.

We will let you have our standard Client Care Letter and an Estimate of fees, if it is feasible, for the transaction or just for the preparatory work, if it is too early to do more.

We will need to obtain Identification Evidence to set up a file and because that is part of our duty under Government requirements and as part of the Land Registration regime where we have effectively been appointed as the “gatekeepers” for the anti-fraud protection they operate. The money laundering and anti-fraud procedures rely on our knowing you and the source of any capital invested or tied up in property, which is then to be sold.

We will need to obtain the title deeds if there are any and information held by lenders, or by us, in our strong-room, or by you. The first matter to deal with is to check the title and make sure we have all the documents and information needed to prove title and the right to sell. You may need to provide authority to your Bank or other Lender to send us the Deeds. If further documents are needed was can advise you.

We will send you the standard commercial/agricultural property enquiries that seem most likely to be relevant to your transaction and liaise with you to obtain full details and supporting documents to draft replies to these standard enquires.

We will usually send to your accountants the relevant tax enquiries so that these can also be prepared with care. The replies may also be relevant to the draft clauses to be used in the contract to be prepared.

We can if you wish prepare at this stage “skeleton” draft documents so that we know when the instructions on a sale come in we can send out “the draft contract package” of contract, draft transfer (if relevant), title and replies to standard enquiries together with relevant supplementary documents such as planning permissions, building control approvals and final certificates, S.106 Agreements, environmental reports, asbestos reports, fire risk assessments and tax documents such as options to charge VAT and background to Capital Allowance claims.

You may prefer to leave those preparations for when you have a firm, subject to contract, Buyer lined up but please bear in mind that it will take time to put all of these together at that time and therefore to issue the documents, known as ‘the contract package’.

Having issued the contract package the Buyer’s solicitors will usually have specific enquiries to raise either related to their client’s intentions, requirements or arising from the standard documents received, where further information is sought, changes to the drafted documents will be asked for and negotiated on and the Buyer’s will be sorting out their lender’s requirements, if they, have one. They will submit searches and take up any points from those search results, which can often lead to a request for further documents or additional replies to new enquiries. Your Land Agent and their Land Agent may also be in liaison concerning the transferability and requirements for transfer of the Entitlements and additional enquiries or matters that they wish to have supplied in relation to that transfer. A value may have to be set to apportion in the contract for the Entitlements, and this may serve as the basis for any deposit/retention against final transfer of the Entitlements.

When the Buyer’s solicitor has its search results, lender’s mortgage offer or loan agreement and related security details (if any) and is happy with these and the contract documents and replies to enquiries they will report to their client and approve the documents so that we can report to you and obtain your signature to the contract in preparation for an exchange of contracts.

We may need to liaise with you on completion dates, when you can give vacant possession, and the deposit to be accepted on exchange of contracts if the Buyer offers less than the usual 10%. Generally you will want to insist on a 10% deposit as it gives you greater security that the Buyer will fulfil the contract; the Buyer has sufficient incentive not to renege on their contract having more at stake if they fail to. Default on a contract is rare but not unknown and having that 10% to forfeit helpful to deal with such a blow, cover the costs of re-sale, disruption to your own plans and costs resulting and of course in a less buoyant market allow for any necessary reduction in the eventual sale price.

We need to know about any borrowings secured on the property and security in existence if you have a lender, at an early stage. We will seek an idea of the amount outstanding and will have to obtain final redemption/repayment figures and undertake to pay the net proceeds of sale to the lenders following completion if there is a charge on the property, as under the standard contract terms these have to be paid off before or at completion. At completion they will need to be discharged from the proceeds of sale. We need to ensure you can comply with the terms of the contract and therefore that the sale price will allow for this repayment in full and cover all the sale costs etc.

We will then exchange contracts at which time the completion date will be set, when you generally must give vacant possession on a fixed date unless you are selling subject to a tenancy for example, or holding over a crop or harvest, and the Buyer must pay the balance of the purchase money.

We will have provided you with our invoice and statement confirming the financial transactions that will take place at completion and will let you have that and the balance of the completion monies following completion.

Final redemption figures will be obtained.

Your Land Agents will be notified of the exchange of contracts, and they can then start preparation and completion of the Entitlement transfers, though these are generally achieved online now; and though they may be prepared, may not be submitted until the appropriate time in the agricultural year, or completion.

Transfers will be executed ready for completion.

We will need to reply to the Standard Requisitions on title and Completion information form sent by the Buyer’s solicitors to clarify and confirm the completion arrangements.

We will then complete and the lender’s will be repaid and their discharge or END notification sent directly to the Land Registry and confirmed to us.

We may need to monitor the Buyer’s progress on registration if it is a sale of part or there is an overage agreement and let you have details once we have seen and checked their registration has been correctly completed, which can take several months.

Once everything is tidied up we will send out our client closure letter. 

Costs and timescale

Once we have the details of a transaction or matter Robert Sainsbury can give you a better idea of the likely cost and timescale for an average transaction. His time is charged at £185.00 an hour for a standard transaction and at £225.00 an hour for larger or more complex transactions or matters. All files are time-costed but the charges will reflect the nature of the matter and the time involved so it is worth meeting Robert to see if he can assist once he has the background and indeed if there is anything it would be wise to look out for or take advice on before you are further committed. He will once he has an idea of the details of a transaction not only be able to confirm in writing the charges but the related expenses that you would incur whoever you instructed to act, such as Stamp Duty Land Tax (SDLT), search fees and Land Registry Fees.

Our team of specialist commercial property solicitors have extensive knowledge and experience which will enable us to deal with all aspects of your enquiry.

Call us on 01787 880440 or complete our online enquiry form, so that we can arrange to speak to you.

Freehold Sales and Purchases

We can act for you on your freehold purchase or sale of agricultural land; farms; development sites; farm cottages; and buildings for conversion, or that are already converted. With over 30 years of real property experience Robert Sainsbury will be able to support you and your other advisers, and complete your transaction, in a friendly and approachable way.

We may not always be your first point of contact for a property transaction but we are pleased to be involved at an early stage to try and make it more straightforward later.

Purchase

On a purchase we can support your Land Agent and Negotiator in agreeing suitable Heads of Terms and realistic timescales. Once these have been agreed we can let you have an estimate of costs, expenses and taxes (Stamp Duty Land Tax – SDLT) on your transaction and a realistic timescale from receipt of a full set of documentation from the Seller’s solicitors; we will check the title, raise enquiries, submit and examine pre-contract search results and deal with the negotiation of the contract documentation to make sure your transaction has a realistic timescale and runs, where possible, to plan. We provide face to face meetings locally, if need be on site to check boundaries or aspects only clear from a site visit and provide, where time allows a full written report so that you understand the legal aspects of your purchase; the documentation and the property. If there is insufficient time to do so before the contract signature meeting we will confirm the advice given before and at that meeting by a confirmatory report on title as soon as practical thereafter. If there are particular aspects of the procedure, in relation to the legal aspects of the property or where you might need to consider seeking other advice and assistance we can suggest where you can find that help and more in depth discussions. We can act for the lenders in many transactions (though that is the lender’s choice) and for you in providing the required report on title to the lenders that the property has a marketable title (or where there are particular areas they need to be aware of), in preparing security documents and to prefect that security by registration, later.

We will need to liaise with your Accountants and/or Tax Advisers on some aspects of the purchase in most cases and your Land Agent, who will value, survey and examine the property, and also be involved in assessment of the Basic Farm Payment and whether it has been correctly applied for to date, whether there is any risk of claw-back or future action for non-compliance, and whether the Basic Farm Payment Entitlements are fully transferable. In the future, these arrangements will be changing, of course. 

We will want to see any valuation, survey, assessment of the property, and of the Entitlements, and any reports relating to them as soon as they are available.

An outline of a transaction:-

We will need to meet with you to obtain essential identification evidence face to face, get a picture of the transaction, the property and intended timescale, how it is to be financed and the source of your funds.

We will let you have our initial client care letter and estimate of fees either before the initial meeting or more likely following it, when we understand the transaction proposed. The initial details can often be taken over the telephone or by email. If we receive those initial instructions by telephone or email we will however rarely be able to act for clients we have not met and cannot act without full verified ID and confirmation of the source of funds.

We will need to obtain Identification evidence to set up a file because that is part of our duty under Government requirements and as part of the Land Registration anti-fraud regime where we are required to act as “gatekeepers”. The majority of the money laundering and anti-fraud procedures rely on our knowing you and the source of the funds for your purchase.

You will no doubt have already liaised with your own Agronomists and Land Agents in making an assessment of the land/Farm and its value. We will need their details in order to liaise with them throughout the transaction. If there are buildings, farm houses etc., you will need (and should have arranged) not only valuations, but a survey of those. This ensures that you know as much about them as practical, their structural integrity, their value as a marketable and useable building, and any short to medium term repairs, alterations, improvements or essential actions that need to be taken, which could affect their value to you, and in the market.

Any valuation for the lender (if any) will take place as part of setting up your financial arrangements, but generally it is stated in that valuation that it is for the purposes of the lender only, and should not be relied upon by the Buyer.

You will need to ensure the Lender’s instructions are received by us in sufficient time to ensure before exchange of contracts you can fulfil them, otherwise you are committed to the purchase and payment of monies without knowing they will be released by the lenders as required and to time. On receipt of the instructions from the lenders we will complete the investigations they require, and any pre-exchange clearances, which are generally run contemporaneously with the pre-contract negotiations and investigations we are carrying out for you. Usually, we will be provided with a copy of the valuation of the property, and will need to check that, and ensure that any aspects highlighted by the valuer are dealt with, reported on, or investigated further, as needed.

Sometimes a lender will use their own independent solicitors and we will need to liaise with them to make sure all their enquiries and requirements are fulfilled (or can be) before you are committed to the purchase by an exchange of contracts.

We will need to make contact with the Seller’s solicitors who will forward a draft contract package, including title, draft contract, and frequently replies to standard pre-contract enquiries. We will need a plan as part of that package, either from the title or if this is a sale of part of the property a Land Registry compliant plan prepared professionally for the Sellers, so that we can on receipt of confirmation of instructions from you and funds to cover expenses we can submit the usual and agreed searches.

The legal transaction is now underway.

On receipt of the valuation or survey report, which you may have to pass on to us or will be forwarded by your lender, replies to enquiries and receipt of the search results we will want to check through these and the title to see if there are aspects of the property or transaction you need to be aware of; might be of concern; where you or we, or your lenders (if any) need more information or clarification or further documentation, which in some cases we may need to obtain from the Seller’s solicitors or sometimes from third parties, such as the local authority. We may advise you of concerns that could change your view of the value of the property, about which the lenders will have to be informed if it affects the marketability or valuation of the property now or in the future; where further investigations, by way of example, a further survey, structural engineers’ report, the advice of a Planning Expert, your Tax Advisers or even an Environmental Investigation, might be needed. We may recommend these as precautionary or protective measures for you alone, even if the Bank or other lender does not think they are needed. There may be issues raised by your Land Agent or Argonomist investigating the Basic Payment Entitlements and the documentation supplied by the Sellers and the Seller’s solicitors in relation to this.

The due diligence relating to the transfer of the Basic Payment Entitlements is a matter dealt with by the Land Agent or Agronomist you employ in that connection, as these are not strictly legal matters, but there will be provisions within the contract for the transfer of the Entitlements, cross warranties, and there may be agreement for a deposit or retention against the transfer of the Entitlements, depending on timing, and the negotiating restraints of the respective parties.

All of these aspects of the legal investigations arise because of the basic principle “buyer beware” which means, in part, because of the use you might require for the property, the investment you or a lender is making and because generally property is (but not necessarily always) a fairly safe, solid investment, with more moderate risk, you will want to know what you are going to buy and whether, legally, at this point it is considered to have a marketable title and also for your particular use or purpose, will it be suitable?

We will at the same time be liaising with your other Advisers, for example Accountants, Tax Advisers, Land Agents, Agronomists and Property Surveyor/Valuer to make sure they have the information about the property relevant to it value, tax for the transaction and statutory compliance, planning and use issues, that have been revealed in our legal investigations/due diligence.

The timing of exchange of contracts, and the eventual transfer of the property will often be linked to field work, harvest, storage etc., and this can often mean that the contract includes Early Entry provisions (for which an enhanced deposit might have to be paid), and/or holdover of crops to be harvested, stored etc. An agricultural contract for the sale or purchase of land or a farm will sometimes include additional provisions relating to this.

Another additional aspect of agricultural purchases and sales is the inclusions of provisions relating to environmental grants and subsidiaries, which will have to be carefully provided for, balancing the risk to the respective parties.

There are some other aspects of agricultural property, which may be more significant than in general freehold purchases and sales; for example, Chancel Repair Liability (which is potentially significant in many transactions, but may move, so bearing in mind the area of agricultural land involved); copyhold and other reservations in respect of mines and minerals; old rent charges; rights of way; and rights in relation to utility equipment, services and even military pipelines etc. Commons registrations and village greens, footpaths, bridleways and rights of way may also be more relevant to a transaction such as this in the countryside. 

We will negotiate the contract and often the transfer document (the final legal document transferring the property to you) and prepare our report to you.

These are not simple matters and they take time. Please, therefore, make sure that you consult with us early enough to ensure you will have sufficient time and have in mind and have agreed a realistic timescale and target date. You will want to ensure you do not commit to expenditure or arrangements which cannot easily be adjusted, cancelled or rearranged without a cost to you. There is no legal certainty until exchange of contract and all this due diligence investigation and preparatory work to carry out before that stage is reached, so you must not commit to timescales and expenditure based on ‘subject to contract’ negotiations and target dates, without appreciating the risks involved and having a ‘Plan B’ fall back position.

We will prepare, when time allows (and preferably it will), a full written report on the legal aspects of the purchase and the property and usually meet with you to run through that report, before obtaining your approval of the transaction, property and contract and signature to it ready for exchange of contracts. If there is insufficient time to prepare this written report before the signature meeting our report will be sent, confirming the advice given at the meeting as soon as time allows afterwards.

Real property transactions require a written contract, hence the importance of “exchange of contracts”, which means you will not be committed until all these matters have been dealt with, but neither will the Seller; either to sell to you, for the price agreed and with the completion date you are targeting.

You will need to consider and if necessary ensure that you have insurance set up ready for exchange of contracts as usually the property will be at your risk from that point. For open or bare agricultural land, this may only involve extension of your existing public liability and other insurance to cover these additional fields. Please make your initial arrangements for insurance early and if your lenders, or you, are intending to back borrowing with life insurance please also make sure you make those arrangements early so that last minute requirements of the insurers (for example a medical report) will not lead to a delay in exchange.

On and from exchange you are committed to the purchase and completion on the date set, so everything needs to be in place and ready, whatever (generally) may happen from then

When everyone is ready, the lenders (and sometimes their solicitors) and you are comfortable with the transaction, the property and timescale, contracts, now agreed, will be signed by the parties, the deposit, which is usually 10% of the purchase price, collected and we will “exchange contracts” between solicitors. Always be careful not to sign anything before this point which might amount to a contract and bind you to something you are not yet ready for. The preparation for and exchange of contracts should always be between solicitors, unless it is the unusual circumstance of a sale at auction, where special rules apply and on which you should seek early and full advice from us before considering a purchase at auction.

On exchange of contracts you will have committed to the purchase and that will include the deposit you have paid and the completion date, which is when you will pay the balance of the monies and can obtain access/take over the property.

From exchange of contracts we will carry out final title searches, submit the report on title to the lender to obtain the monies the day before completion, and let you have our invoice and statement showing what will be needed to complete the transaction; pay any SDLT; pay the balance of the monies or make up the difference  between the Lender’s advance and that sum, including Land Registry fees; have legal charge documents and transfers executed and generally set the transaction up ready for completion on the date agreed in the contract.

Following exchange of contracts, your Land Agents or Agronomist will be taking steps in relation to the transfer of the Entitlements, and we will need to liaise with them concerning these arrangements and their progress, particularly if a deposit is being retained by one party or the other’s solicitors against the final transfer of the Entitlements.

On the completion date the balance of the monies will be paid and the title documents and transfer dated with the Sellers’ solicitors sending these to us following completion.

Sometimes exchange and completion will take place on the same date.

We will then submit the SDLT return within the 14 days required and the registration within the priority of our search result and on completion of the registration will send you a copy for checking and send the essential title documents to the Lenders in accordance with their charge over the property or retain the deeds if we have a storage agreement with you in our strong-room, letting you have our file closure letter at that point.

We may also have needed, during the transaction, to liaise with your Accountants, who may in turn have had to liaise with the Seller’s Accountants in relation to tax aspects of the transaction, including VAT and Capital Allowances. Further steps may have to be taken by your Accountants, following completion of the purchase in this respect.

Sale

On a sale we are also happy to assist from an early stage, and it can have real benefits for the transaction it you make contact with us at an early stage, let us know your intentions, hoped for sale arrangements and timescales. We can advise on the availability and possible whereabouts of deeds, registered title and other necessary documentation. We can review with you early on the standard agricultural property enquiries used on most agricultural property transactions, and you can seek out and obtain documents such as planning documents, Building Regulation approvals, Fire Risk Assessments, EPC’s and Recommendation Reports, Asbestos Reports, your Entitlement information, Agri-environmental agreements, wayleaves, easements, telecoms licences or Leases, and other standard documentation that the Buyer’s solicitors will be expecting, and might take time later in the transaction to locate, or which you may not have and so need to obtain, for example, from third party sources and then to pass on to us.

Early preparatory work can sometimes save time and delays later, but there will nearly always be something unexpected or un-thought of that arises during the transaction, either because of a lawyer’s requirements, surveyor’s or lender’s queries or requirements which were not or could not be anticipated or might not have been considered of significance when the sale documentation was being prepared. However, early preparation will always help.

You will want to discuss the arrangements for the sale with your own Land Agent and Property Agent, but you will also want to talk to your accountants and tax advisers to ensure the tax implications are understood and planned for. There might be timing issues and very occasionally a better structure to the sale but in all cases you will need to budget for the tax implications if any. There are standard agricultural/commercial enquiries about Capital Allowances and VAT as well as Stamp Duty Land Tax that will need to be referred to your Accountants and Tax Advisers in any event to make sure replies given are accurate and prepared with care.

An outline of a transaction:-

Discuss the proposed sale with your accountants and tax advisers.

Seek your preferred Land Agent and Selling Agent.

Seek out your preferred solicitors – hopefully BWB! Often the first the solicitors hear about an intended sale is when a Buyer has been found and then there is surprise that it takes time to put together all the legal documents and the “contract package” ready to send out to the Buyer’s Solicitors. The time to instruct your solicitor is as you place the property on the market so some of the simple preparatory steps can be taken, not when the Buyer is found.

We will send you the standard agricultural property enquiries for consideration. on.

We will let you have our standard Client Care Letter and an Estimate of fees, if it is feasible, for the transaction or just for the preparatory work, if it is too early to do more.

We will need to obtain Identification Evidence to set up a file and because that is part of our duty under Government requirements and as part of the Land Registration regime where we have effectively been appointed as the “gatekeepers” for the anti-fraud protection they operate. The money laundering and anti-fraud procedures rely on our knowing you and the source of any capital invested or tied up in property, which is then to be sold.

We will need to obtain the title deeds if there are any and information held by lenders, or by us, in our strong-room, or by you. The first matter to deal with is to check the title and make sure we have all the documents and information needed to prove title and the right to sell. You may need to provide authority to your Bank or other Lender to send us the Deeds. If further documents are needed was can advise you.

We will send you the standard commercial/agricultural property enquiries that seem most likely to be relevant to your transaction and liaise with you to obtain full details and supporting documents to draft replies to these standard enquires.

We will usually send to your accountants the relevant tax enquiries so that these can also be prepared with care. The replies may also be relevant to the draft clauses to be used in the contract to be prepared.

We can if you wish prepare at this stage “skeleton” draft documents so that we know when the instructions on a sale come in we can send out “the draft contract package” of contract, draft transfer (if relevant), title and replies to standard enquiries together with relevant supplementary documents such as planning permissions, building control approvals and final certificates, S.106 Agreements, environmental reports, asbestos reports, fire risk assessments and tax documents such as options to charge VAT and background to Capital Allowance claims.

You may prefer to leave those preparations for when you have a firm, subject to contract, Buyer lined up but please bear in mind that it will take time to put all of these together at that time and therefore to issue the documents, known as ‘the contract package’.

Having issued the contract package the Buyer’s solicitors will usually have specific enquiries to raise either related to their client’s intentions, requirements or arising from the standard documents received, where further information is sought, changes to the drafted documents will be asked for and negotiated on and the Buyer’s will be sorting out their lender’s requirements, if they, have one. They will submit searches and take up any points from those search results, which can often lead to a request for further documents or additional replies to new enquiries. Your Land Agent and their Land Agent may also be in liaison concerning the transferability and requirements for transfer of the Entitlements and additional enquiries or matters that they wish to have supplied in relation to that transfer. A value may have to be set to apportion in the contract for the Entitlements, and this may serve as the basis for any deposit/retention against final transfer of the Entitlements.

When the Buyer’s solicitor has its search results, lender’s mortgage offer or loan agreement and related security details (if any) and is happy with these and the contract documents and replies to enquiries they will report to their client and approve the documents so that we can report to you and obtain your signature to the contract in preparation for an exchange of contracts.

We may need to liaise with you on completion dates, when you can give vacant possession, and the deposit to be accepted on exchange of contracts if the Buyer offers less than the usual 10%. Generally you will want to insist on a 10% deposit as it gives you greater security that the Buyer will fulfil the contract; the Buyer has sufficient incentive not to renege on their contract having more at stake if they fail to. Default on a contract is rare but not unknown and having that 10% to forfeit helpful to deal with such a blow, cover the costs of re-sale, disruption to your own plans and costs resulting and of course in a less buoyant market allow for any necessary reduction in the eventual sale price.

We need to know about any borrowings secured on the property and security in existence if you have a lender, at an early stage. We will seek an idea of the amount outstanding and will have to obtain final redemption/repayment figures and undertake to pay the net proceeds of sale to the lenders following completion if there is a charge on the property, as under the standard contract terms these have to be paid off before or at completion. At completion they will need to be discharged from the proceeds of sale. We need to ensure you can comply with the terms of the contract and therefore that the sale price will allow for this repayment in full and cover all the sale costs etc.

We will then exchange contracts at which time the completion date will be set, when you generally must give vacant possession on a fixed date unless you are selling subject to a tenancy for example, or holding over a crop or harvest, and the Buyer must pay the balance of the purchase money.

We will have provided you with our invoice and statement confirming the financial transactions that will take place at completion and will let you have that and the balance of the completion monies following completion.

Final redemption figures will be obtained.

Your Land Agents will be notified of the exchange of contracts, and they can then start preparation and completion of the Entitlement transfers, though these are generally achieved online now; and though they may be prepared, may not be submitted until the appropriate time in the agricultural year, or completion.

Transfers will be executed ready for completion.

We will need to reply to the Standard Requisitions on title and Completion information form sent by the Buyer’s solicitors to clarify and confirm the completion arrangements.

We will then complete and the lender’s will be repaid and their discharge or END notification sent directly to the Land Registry and confirmed to us.

We may need to monitor the Buyer’s progress on registration if it is a sale of part or there is an overage agreement and let you have details once we have seen and checked their registration has been correctly completed, which can take several months.

Once everything is tidied up we will send out our client closure letter. 

Costs and timescale

Once we have the details of a transaction or matter Robert Sainsbury can give you a better idea of the likely cost and timescale for an average transaction. His time is charged at £185.00 an hour for a standard transaction and at £225.00 an hour for larger or more complex transactions or matters. All files are time-costed but the charges will reflect the nature of the matter and the time involved so it is worth meeting Robert to see if he can assist once he has the background and indeed if there is anything it would be wise to look out for or take advice on before you are further committed. He will once he has an idea of the details of a transaction not only be able to confirm in writing the charges but the related expenses that you would incur whoever you instructed to act, such as Stamp Duty Land Tax (SDLT), search fees and Land Registry Fees.

Our team of specialist commercial property solicitors have extensive knowledge and experience which will enable us to deal with all aspects of your enquiry.

Call us on 01787 880440 or complete our online enquiry form, so that we can arrange to speak to you.

Our team of agriculture solicitors have extensive knowledge and experience which will enable us to deal with all aspects of your enquiry.

Call us on 01787 880440 or complete our online enquiry form so that we can arrange to speak to you.

Robert Sainsbury

Robert is the firm’s agricultural and commercial property lawyer. He joined Bates Wells & Braithwaite in 2003 having worked in East Anglia since qualifying as a solicitor in 1984.

Robert has many years’ experience of agricultural and commercial property work both freehold sales and purchases and the grant and taking of leases, options, promotional and overage agreements. He has given the Cambridge Law Society’s Agricultural Law up-date seminar in recent years.

In his spare time Robert spends a lot of time with his family, enjoys badminton and tennis and plays an active role within St Mary’s Church Bury St Edmunds.

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