Agricultural occupancy restrictions and the need to test the market
The Upper Tribunal (Lands Chamber) recently refused to discharge an agricultural occupancy restriction imposed on a property in Wales by a planning agreement.
Known as ‘agricultural ties’, these restrictions can be notoriously difficult to lift once imposed. Local planning authorities tend to be reluctant to agree to remove them, and frequently place an obligation on the applicant to prove that there is no demand for an agriculturally tied property within the area, through a vigorous marketing test.
Typically, this exercise requires the marketing of a property at a reduced value reflecting the agricultural tie for a specified period, usually not less than 12 months. If no offers are received within that period the local planning authority may agree to the removal of the agricultural tie, but this is by no means guaranteed.
In this case the property was heavily advertised for sale for over a year. Its price was significantly reduced and still no interest was generated. Nevertheless, the applicants failed to satisfy the tribunal that the agricultural tie was obsolete and should be removed in accordance with The Law of Property Act 1925.
The tribunal criticised the applicants for failing
- to offer the land for rent instead of just for sale
- to provide an objective analysis of comparables
- to advertise the property for sale in specialist farming press
- to adjust the price to reflect the effect of general market movements
Although this case does not involve new law, it is a good example of the stringent and vigorous requirements of market testing and landowners or prospective purchasers of agriculturally tied properties in England and Wales should bear this in mind.
For advice on land and property please contact our agriculture & estates team.