Shropshire Farming Talk: Agricultural ties untangled
In the rural sector, when considering buying selling or building residential accommodation, many of us will have come across the phrase “Agricultural Ties”. Farmers will often tell us that the residential property that they want to buy or sell is subject to such a restriction but what a lot of people don’t know is that there are many different types, and the effect they have may be quite different.
What is an Agriculture Tie?: Simply put, an Agricultural Tie is a restriction of some sort imposed on a property by the Local Planning Authority as a condition of Planning Permission. They usually restrict, in some way or another, who can occupy or own the property or the use to which it can be put.
How do they get imposed?: There are a number of ways that they can be imposed. Older ties were usually imposed as a condition of the Planning Permission authorising the development. More recently, since the advent of the Town and Country Planning Act 1990, it has been more common to see them imposed by way of “Section 106 Agreements” or “Planning Obligation Agreements” which can be used to impose more complex restrictions than could have been done by a planning condition.
What do they say?: There is no one type of restriction - they come in many shapes and sizes. Some are relatively “light-touch”, and others can be very restrictive. A common theme however is that they restrict the use of the development in some way. A relatively standard restriction might be one limiting the occupation of the property to someone involved in Agriculture (which has a specific definition in planning terms), but we have seen restrictions tying a property to a certain area of land so that they can’t be sold separately or requiring the occupier to be involved in a certain business at a certain location.
How do they affect the value of the property? In general terms, given that an Agricultural Tie has the effect of narrowing the pool of potential buyers for a property, it will have the effect of reducing its value. By how much depends mainly on how restrictive it is. Also, fewer lenders are willing to lend on such properties which itself might have an impact on value.
What can be done about them? In some cases (but by no means all), it may be possible to remove an agricultural restriction, particularly if you can show that there has been a breach of that restriction for a continued period of 10 years or more. You might then be able to apply for a “Certificate of Lawfulness”. In some cases, the Local Authority might be persuaded to look at the need for the tie again, particularly if you can show that there is no demand for the property locally. It might also be possible to apply to vary the planning consent in some way. None of these routes is quick, easy or by any means guaranteed to be successful.
What if I’m thinking of Buying or Selling a property subject to a Tie? A specialist rural solicitor will look carefully at the planning history of the property and will be able to tell you what the terms of the restriction are, and how they might impact upon your purchase or sale. Bear in mind when you are negotiating the price that such restrictions will have an effect on the value of the property and its future saleability. If you are Buying, make sure that you can comply with the terms of the restriction and that your Lender is on board with it. Sorting this out at an early stage will save cost and time at a later stage. If you are selling, you might want to consider whether you can somehow remove or vary the tie to free up the potential market and again a specialist solicitor will be able to provide you with advice on this.
Arwyn Reed, Partner at Agri Advisor
