I acted for a farmer in Herefordshire who had the opportunity to purchase for around £2million the freehold of his 800 acre farm over which he held a 1948 Agricultural Holdings Act Tenancy; the combined freehold and tenancy interests were worth around £7m The purchase price had to be wholly funded from bank borrowing together with further funds to achieve vacant possession in the light of the following problems.
(a) There was an underlying farming partnership with a third party which had to be terminated.
(b) There were various agricultural workers in possession of parts of the farm with some security of tenure.
(c) The tenancy interest needed to be kept separate from the freehold being acquired (and not merged) in order to save tax advantages.
(d) There were substantial mineral rights which in theory could have been exercised by a third party.
All these matters needed to be resolved simultaneously by virtue of conditional arrangements being in place prior to entering into a binding contract with the seller. This was successfully achieved, the beneficial interest in the freehold was kept separate from the beneficial interest in the tenancy, and the deal was structured to achieve maximum tax efficiency. The farming partnership was dissolved and vacant possession of all buildings was negotiated and obtained. We also acted for the funding bank and having registered a previously very complicated and unregistered title the farm was prepared for sale in lots. The client now has sold sufficient lots to be free of debt and in possession of several hundred acres of farmland with a number of residential properties worth around £7million.
Guy acted for clients who were purchasing the main house and land forming part of an estate in the South East of England which was being split up on the death of the previous owner.
Due to the size of the land being purchased and the creation of new boundaries it was important to visit and meet clients on site. These enabled the client’s requirements to be brought to the attention of the seller from the outset, which meant the negotiations over the necessary restrictive covenants were commenced without delay.
Part of the land was subject to an agricultural tenancy which would have continued and the contract was made conditional upon the surrender of that agricultural tenancy so that the client could buy free of that tenancy.
The seller agreed to carry out certain works and the documentation was amended to provide for these works to be completed to the Buyer’s satisfaction and a retention agreed to further protect the client in case of problems with the works. The completion of the works also triggered an Option Agreement and it was imperative that the clients were satisfied with the standard of those works before that Option was exercised. In addition they were interested in purchasing additional land and a pre-emption agreement was entered into to reflect this.
Because of the number of parties involved in the purchase of the estate the negotiations were lengthy as they had to be agreed by all parties. The documentation was complex, and particularly so for clients not used to this type of land transaction, so it was important that Guy kept them appraised of the problems and situations regularly through meetings, emails and telephone calls. As a result when at the last minute the Seller issued a deadline for a simultaneous exchange and completion Guy was in a position to assist the Buyers in achieving this deadline albeit outside usual working hours.