Landed Estates & Agriculture

An option agreement is a contract between parties for the sale and purchase of land (or a lease of the land). The agreement gives a third party (often a developer) the option to call on the landowner to sell the land to the third party within a certain timescale. The agreement can also work the other way by giving the landowner the option to call for the third party to buy the land.

The agreement may be very simple or include additional obligations on the third party such as an obligation to take active steps to obtain planning permission before the option can be exercised. 

A typical example of an option agreement is where a landowner grants a developer an option to purchase its land within a set timescale, subject to the developer obtaining a planning permission for development of the site. Once the developer obtains planning permission that it’s happy with, it then has the option to exercise its right to purchase the land. The price may be set at the time of contracting or there could be a mechanism to agree the price following the grant of planning permission.

A solar farm is a large collection of connected photovoltaic panels (commonly known as solar panels) constructed on land to absorb energy from the sun and convert this into electricity to feed into the National Grid. Usually, a solar farm will include a substation for transmission of the energy to the Grid, as well as battery storage.

Often, a landowner will grant a solar developer an option for a lease of their land to construct the solar farm — subject to the developer obtaining the necessary consents (including planning permission and grid connection) for the site.

If you’ve been contacted by a solar developer in respect of using your land for a solar farm, our team can provide you with advice before you sign any documents. You should also consult a land agent as part of this process.

Questions like this are usually highly fact specific. The answer will usually depend on how long the footpath has been in use, how often it’s used, who uses it, what it’s used for, whether permission has been given to use it and whether there’s any signage on the property that states whether or not it’s a public footpath. 

If the public has been using a path for over 20 years without permission, it can be designated a public footpath. If it has been designated a public right of way, you can’t block or obstruct the public’s use of the path. The local authority maintains a definitive footpath map of rights of way in its area.

Before blocking or diverting any paths on your land, it would be prudent to take professional advice.

Biodiversity Net Gain is an approach to development that ensures there’s an improvement in wildlife habitat by the end of a development project. 

Developers are currently required to deliver a BNG of at least 10% on all development projects over a certain threshold. Developers can achieve this through BNG projects on-site, off-site or through a mixture of both. 

Examples of BNG include planting trees, creating wildlife corridors and restoring wetlands.

Mines and minerals are capable of being a separately registrable interest. Sometimes, when a landowner sells land, an interest is retained in the mines and minerals. This is usually identified by an entry on the title register which states that mines and minerals have been excepted. The owner of the minerals can register this separately and there’ll be a separate freehold title for the mines and minerals under the property — though this is often left unregistered.

It's important to take legal advice before carrying out any works that involve digging into the mines and minerals at the property if these have been excepted or separately registered.

The Basic Payment Scheme was an agricultural subsidy scheme of direct payments to farmers. Following Brexit, the UK no longer participates in the Common Agricultural Policy that established the BPS.

In England, the Agriculture Act 2020 has replaced BPS and introduced de-linked payments for a transition period until the end of 2027. Environmental Land Management (ELM) schemes will ultimately replace BPS. 

In Wales, the Agriculture (Wales) Act 2023 is phasing out BPS by March 2029 and replacing it with Sustainable Land Management (SLM) schemes. 

De-linking means that the claim for payment is no longer made through BPS and isn’t dependent on the person claiming to be farming the land. The de-linked payments will reduce throughout the transition period to 2027. After this, the Government will no longer make de-linking payments and farmers will need to claim subsidies though ELMs (or SLMs in Wales).

Following the end of the BPS, the Government has set up new financial aid schemes for farmers where the focus is on improving the environmental landscape (whereas BPS was paid for how much land you farmed) — known collectively as Environmental Land Management schemes in England and Sustainable Land Management schemes in Wales. 

There are three main ELMs — Sustainable Farming Incentives, Countryside Stewardship and Landscape Recovery. 

The principle scheme under SLM will be the Sustainable Farming Scheme.

Yes, the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) may apply when you are buying a farm with several workers. 

If TUPE applies, the rights and liabilities associated with the employees who are working in the business at the time of the sale will transfer to the new owner. However, the application of TUPE depends on the nature of the sale.

If the parties don’t comply with their respective TUPE information and (if necessary) consultation obligations in advance of the transfer, each affected employee could be awarded up to 13 weeks’ gross pay by an Employment Tribunal. 

We’d strongly recommend that you seek advice from our specialist employment lawyers with regards to your personal circumstances in relation to whether TUPE is applicable to your transaction.

An Assured Shorthold Tenancy (AST) is a type of tenancy used for residential properties in England. 

From 1 December 2022, ASTs no longer exist in Wales. 

An AST enables a landlord to let a residential property to a tenant while retaining the right to repossess the property at the end of the term. The term can be for a fixed term or contractual periodic that’ll run from one period to another. While most ASTs are granted for a short term, if granted for a period of more than seven years they’ll need to be registered at HM Land Registry.

Also, while an AST can be verbal, having a written AST is best practice. This will set out the terms of the tenancy agreement for both the landlord and tenant.

A ransom strip is a parcel of land owned by a third party that lies between one piece of land and another (or a public highway) and prevents the intended use of one piece of land. 

Ransom strips are most often encountered in respect of development projects. They can be created accidentally where a landowner has sold a portion of their land for development and kept a strip to enable access to their remaining land. They can also be created deliberately when a landowner has sold a portion of their land but retains a strip intentionally, knowing that the strip will be required for access by the developer and thereby giving them leverage to negotiate a fee.

Ransom strips are usually important pieces of land that open up the potential of a development site. Without the strip of land, the development may be significantly encumbered. The owner of the ransom strip can therefore ‘hold you to ransom’ — requiring a payment to either sell the ransom strip or grant a right of way over it to allow access to the development site.

MEES affect both residential and commercial properties before they can be let and are intended to improve the energy efficiency of both residential and commercial private rented property. An Energy Performance Certificate (EPC) records a property’s energy efficiency rating using an A-G grading scale, where A is the most efficient and G is the least efficient.

For both residential and commercial properties, Part 3 of the MEES Regulations apply. For a residential property, a landlord may not grant a new tenancy of a property or continue to let a property (on or after 1 April 2020) which falls below an EPC rating of E. For a commercial property, a landlord may not grant a new tenancy of a property or continue to let a property (on or after 1 April 2023) which falls below an EPC rating of E. If the property falls below this category, the landlord must make the relevant improvements to the property so that it’s no longer sub-standard.

There are some exemptions to the MEES Regulations and once you’ve registered the relevant exemption, you’re able to let the property without being in breach of the Regulations.

Consequences for non-compliance include financial penalties.

A Grazing Licence allows a person (the grazier) to access the land of the landowner (grantor) for the purpose of grazing their animals. These are normally granted for a short period of time by landowners for the duration of the grazing season between April and October. A licence fee may be payable by the grazier to the grantor.

A Grazing Licence doesn’t grant exclusive possession of the land. It’s merely a right for the grazier to occupy the land with the grantor and can be cancelled at any time in accordance with the terms of the licence by the parties to it. The licence is personal to the grazier and can’t be inherited or assigned to a third party. It’ll come to an end automatically if one of the parties dies or the grantor sells its interest in the land.

If a tenancy is granted after 1 September 1995, it’ll be a Farm Business Tenancy governed by the Agricultural Tenancy Act 1995 (ATA 1995) (subject to exceptions) and granted by the landowner (landlord) to a person or entity (tenant) to use the land primarily or wholly for agricultural purposes (so long as at least some of the land is commercially farmed). This is usually for a longer term and grants the tenant exclusive possession for a definite period of time in return for payment of rent. The landlord can’t gain access to the land except in accordance with the terms of the FBT.

The FBT can be sold, sub-let or inherited by the tenant’s beneficiaries either wholly or in part, subject to the terms of the FBT which can restrict this. The FBT can’t be brought to an end during the fixed period set out in the FBT unless the terms of the FBT enable this and provided this is in accordance with the ATA 1995 or the tenant is in breach of its covenants under the FBT.

Listed Building Consent is a type of planning control which enables planning authorities to ensure that any changes to listed buildings are appropriate and sympathetic to their character. This consent is in addition to any planning regulations that would normally apply.

A listed building is either a building, an object or structure fixed to it (or that has been within the curtilage of the building since 1948) that has been considered to be of national importance in terms of its architecture or historic background. Details of listed buildings can be found on the List of Buildings of Special Architectural or Historic Interest. 

An application for Listed Building Consent should be submitted to the Local Planning Authority for any applications that require the extension, alteration or demolition of a listed building. If successful, this should be granted within eight weeks of the Local Planning Authority validating the application. It’s recommended that you speak to your local authority Conservation Officer and check whether consent is needed for your works.

Yes, provided that you hold sufficient legal title to evidence your ownership of the land (such as physical title deeds), you can proceed to sell your land. 

You’ll need a ‘good root of title’ and the intervening title documents from your ‘root’ to the document which evidences your current ownership of the property. A ‘good root’ of title is a deed for the sale of a property for monetary consideration that’s at least 15 years old. 

Our experts can review your title deeds to produce the necessary set of documents for a prospective buyer. We’d also recommend that you provide a buyer with a HM Land Registry-compliant plan to clearly identify the boundaries of the property that you intend on selling.

Many prospective buyers prefer to purchase registered land as it’s a state guaranteed title. However — since all land must be registered on a conveyance or transfer for value — by selling your land, your prospective purchaser will be obliged to register it at HM Land Registry.

Registered land is preferable to a potential buyer and will speed up a conveyancing process. If you wish to register any unregistered land, our experts are happy to advise on this.

FBTs and AHAs are two types of agricultural tenancy agreements that can be found in England and Wales. Prior to the 1995 Agricultural Holdings Act, all agricultural tenancy agreements were AHA tenancies. Any agricultural tenancy agreements created after 1 September 1995 must be Farm Business Tenancy agreements (unless an exception applies).

The key differences between these agreements are listed below.

If an AHA tenancy is unwritten, a landlord (or a tenant) may serve a section 6 notice to formalise the terms of the tenancy. This won’t constitute a new tenancy but will serve to document the terms of the tenancy.

Sporting rights are rights to hunt, shoot and/or fish wild animals, fish and wild game over a property. Usually, these rights will allow groups to cross land on foot with or without animals so that they may exercise the sporting rights. Sometimes, these rights will include a right to retrieve dead carcasses in addition to the sporting rights. Sporting rights are usually granted by a lease or licence. If the rights aren’t granted to a third party, they’re said to be ‘in hand’.

Sporting rights may not be owned by the owner of the land in question and may be owned by a third party. Sporting rights can be registered as a burden against a property’s legal title and are similar to easements.

Profits a prendre are rights to take items from land that are capable of ownership and a product of nature and can include rights to take wood, grass or exercise fishing rights over another person’s land. Profits a prendre can be created expressly by deed, statute, implied grant (although rarely) or long use.

An Agricultural Tie (also known as an ‘Ag Tag’) is a planning condition that stipulates a residence must only be rented or sold to a person employed (or last employed) in agriculture. This can limit those who choose to buy or rent a property as they must be employed in agriculture so as not to breach the planning condition.

To remove an Ag Tag, an application must be made to the local authority to confirm that the restriction is no longer applicable by providing a statutory declaration that confirms the property has been used by someone other than a person employed or last employed in agriculture or forestry — and that such occupation has been continuous for ten years or more without any enforcement action having been taken. This will allow you to apply to remove the ‘Ag Tag’ from the property.

A service occupancy is a form of tenancy agreement between an employer and employee. In fact, it’s a licence agreement and can only be used if the employee resides in or near the property so as to fully discharge their duties under their contract of employment. To qualify as a service occupancy, the employee must not pay any rent to the employer and must be employed by the employer while living in the property.

An example of a service occupancy would be a living arrangement for some agricultural workers who need to live close to or at their place of employment to fully perform the terms of their employment. 

If an employer provides an employee with a dwelling to reside in while they work but charges the employee rent, this will be classified as a service tenancy (and therefore regulated under the Housing Act 1988). These must not be confused with service occupancies. 

Landlords have a few options available to evict AHA tenants. 

1. Serving a notice to quit 

There are two types of termination notice under the Agricultural Holdings Act 1986:

• An unqualified notice to quit, which doesn’t require a reason. If no reason is given, a tenant can claim basic compensation. If a landlord relies on a relevant statutory ground (such as termination of the tenancy being in the interests of sound estate management), they may avoid paying additional compensation. A tenant can serve a counter-notice within one month, meaning that the notice won’t have effect unless the landlord obtains the Tribunal’s consent. 
• A case notice relying on specific statutory grounds (known as Cases A – H). Examples are tenant death (Case G) and failure to pay rent or remedy a remediable breach (Case D). With Cases A, B, D or E, a tenant can challenge the ground in arbitration. With Cases C, F, G or H, a tenant can only challenge the ground in court proceedings. 

Before serving a notice to quit, the type of tenancy must be identified. Any notice must be in writing and provide at least 12 months’ notice from the end of the current year of the tenancy (subject to exceptions). Case notices are generally preferred to unqualified notices as the tenant has no right to serve a counter-notice with the former. If the tenant fails to vacate the holding — as required by the notice to quit — the landlord will need to commence possession proceedings. 

2. Surrender

It may be possible to surrender the tenancy by mutual agreement. However, the tenant may expect to receive a surrender premium, as well as any compensation that they may be entitled to, excluding tenant’s compensation for disturbance (which only arises following termination by notice to quit). 

3. Forfeiture

A landlord may be able to forfeit a tenancy (i.e., bring it to an early end) if there’s a contractual right to do so — typically due to a tenant breach. Forfeiture can be via court proceedings or peaceable re-entry, though the latter shouldn’t be used where the holding includes a residential element. Notice specifying the breach and allowing the tenant a reasonable opportunity to remedy is required, except in cases of non-payment of rent, bankruptcy or liquidation. Tenants can, however, apply to court for relief from forfeiture to reinstate the tenancy. This is a discretionary remedy. 

Given the complexity of the law in this area, legal advice should be sought early on to agree a strategy, ensure compliance and mitigate the risk of potential challenges. 

This note is provided for informational purposes only. It is not intended to be a comprehensive analysis of the law, nor does it address the circumstances of any specific matter. Nothing in this note constitutes legal advice. For any queries, please contact our property litigation team.