The simple answer is yes, although the Covid-19 pandemic arrived at what is traditionally a popular time of year for farms to be launched onto the open market.
Depending on the objective of your farm sale, you may still want to continue with the process. The message we are hearing from those directly involved in the land market is that the current situation should not discourage those looking to market their farms.
If you have made the decision to sell your farm, there are some steps you can take now, despite the pandemic.
Farm sales typically take 6–12 months to complete, and being prepared will ease what can be a complex and involved legal process. Whilst your solicitor, bank manager and accountant are likely to be working from home, they are still available and it helps to engage with professionals early.
If you address the issues below and are fully prepared, that readiness could gain you several weeks in the transaction once a sale is agreed.
Do you legally own the land you are offering to the market?
If your farm is registered at the Land Registry, copies of the title documents can be obtained digitally. Your solicitor can check legal ownership and pick out any unusual title entries.
If this is a once in a generation sale, the farm may not have changed hands in recent years and may not be registered at the Land Registry. In this case, you will need to locate the deeds, and make sure you have all the correct deeds for the area you wish to sell.
You may think that is obvious, but when Uncle Tom passed away and you inherited his 50 acres in 1972, was that land actually legally transferred and do you have the deeds for it? Additionally, you may have thought you owned that 10 acres of woodland on the edge of the farm and always treated it as your own, but you don’t have title deeds for it. These are not uncommon situations and spotting these at an early stage will avoid delays during the transaction.
Are there any unusual or potentially off-putting title entries?
It is more than likely you have been farming the farm daily for many years without knowledge of any unusual title entries. Why is that bank loan you paid off in 1999 still noted on the title? Your solicitor can ask the bank to remove their interest to “clean” your title and prepare for a sale. The more you can do to clean up your title prior to sale, the easier it is for the buyer’s solicitor to review. Ultimately, this saves time.
Invest some time at an early stage preparing your title deeds.
A time-consuming aspect of selling your farm will be preparing replies to enquiries which the buyer’s solicitor is required to raise for their client.
Most solicitors will use a standard set of these enquiries. It is sensible to prepare replies at an early stage so that you can deal with them swiftly later on once a sale is agreed.
What is involved?
The standard enquiries comprise around 50 pages of questions, covering points ranging from boundary ownership to asbestos reports. The intention is to give the buyer’s solicitor as much information as possible. A detailed set of replies could reduce the number of additional questions they can raise.
Many questions require documentary evidence in support of replies. For instance, you will need copies of relevant planning documents, environmental permits, tenancy agreements, cropping history and employee details (if relevant). Finding and providing copies of these early in the transaction will ease the process.
Common situations and how these affect pre-contract enquiries:
- You are acting as a personal representative of a deceased i.e. you are their executor/executrix
If the sale has unfortunately been triggered by a death and you are acting as personal representative, you may need to allow yourself longer to prepare replies to these questions. They may also seem slightly overwhelming if you have little practical knowledge of how the farm has been run.
- You own the farm, but have been renting it out
You are likely to have already discussed the practicalities of selling a rented farm with your agent. It is also an important point when providing replies to enquiries. You may not have been directly involved with some aspects of the farm for quite some time, so it would be wise to allow time for input from your tenant, if they will engage in the process with you. They are under no obligation to do that.
- You own the farm, you have been renting it out and the tenant is the purchaser
The common response in this situation is that the tenant already knows about the farm and there is no point answering 50 pages of questions. We sympathise and see your point, but, the buyer may require finance for their purchase and the bank will not take the same view as the tenant. They will have stringent requirements before they will release funds, so it is as much in the interest of the tenant as the seller for the tenant to assist with the questions.
In all situations, you can only ever respond to the best of your knowledge.