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Agriculture and rural land standard enquiries
Practical Law UK Standard Document 5-616-7576 (Approx. 86 pages)
Agriculture and rural land standard enquiries
| Maintained • , England, Wales |
Use of this document is free, subject to the Conditions in Practice note, Conditions for use of agriculture and rural land standard enquiries.
This document sets out a range of pre-contract enquiries to raise on behalf of a buyer of agricultural or rural land.
This document is endorsed by the Agricultural Law Association (ALA) and uses wording from the Commercial Property Standard Enquiries 1 (CPSE.1) which has been reproduced with the kind consent of the Property Support Lawyers Group.
This document is available in two formats:
The web format incorporates guidance notes, which can be viewed or printed with, or separately from, the enquiries (see Actions pane in the top right hand corner of the screen).
The Word format can be accessed from the Word link in the Actions pane in the top right hand corner of the screen. The Word format allows a user to insert replies to the enquiries.
If you have any comments, please email [email protected].
For the Word version of this document click here.
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About this document
The Practical Law agriculture and rural land standard enquiries use similar layout, terminology and drafting principles to the Commercial Property Standard Enquiries (CPSEs). These enquiries aim to elicit information that is not necessarily available from other sources, such as searches, inspections or surveys.
Tailor the enquiries to the nature of the Seller's activities, the Property and the Transaction. Not all of these enquiries, or all parts of each enquiry, will be relevant to every transaction. Some of the enquiries will only be relevant if the transaction involves the sale of a business, rather than the sale of an asset.
Supplemental enquiries may be necessary depending on the results of searches, replies to enquires, the nature of the Property and of the Transaction.
If the Property includes residential dwellings, it may be appropriate to raise the Law Society TransAction form TA10: Fittings and contents form in relation to each dwelling. If the Property includes leasehold residential dwellings, it may be appropriate to raise the Law Society TransAction form TA7: Leasehold information form (TA7). The Practical Law enquiries include some general questions covering similar ground to the Law Society TransAction form TA6: Property information form (TA6), but the Buyer should consider whether it may be appropriate to raise the TA6 enquiries in relation to each dwelling.
If the Law Society Conveyancing Protocol applies, the forms of enquiry in TA6 and TA7 must be used (paragraph 11, general obligations). Paragraph 32 of the Protocol states:
"Raise only those specific additional enquiries required to clarify issues arising out of the documents submitted or which are relevant to the particular nature or location of the property or which the buyer has expressly requested. Resist raising any additional enquiries, including those about the state and condition of the building, that have answers which are capable of being ascertained by the buyer's own enquiries, survey or personal inspection. Such enquiries should not usually be raised. Indiscriminate use of "standard" additional enquiries may constitute a breach of this Protocol. If such enquiries are submitted, the seller's solicitor is under no obligation to deal with them. Nor does the seller's solicitor need to obtain the seller's answers to any enquiry seeking opinion rather than fact."
For more information on the Law Society Conveyancing Protocol, see:
Assumptions
Check the following assumptions carefully and ensure that none of the matters below are likely to apply to the Property. If they do apply, consider raising the additional CPSE enquiries flagged. These enquiries are drafted on the assumptions that:
- The Buyer will not be taking over the Seller's insurance policy. If insurance arrangements will remain in place following completion of the Transaction, the Buyer should raise additional enquiries (see CPSE.1 enquiries 17.4 to 17.6).
- The Property is freehold land. If instead the Property is held on a long lease, raise additional enquiries, such as CPSE.1, enquiry 23 (SDLT on assignment of a lease) and CPSE.1, enquiry 28.4. If the transaction is the grant of a new lease at a premium, raise CPSE.1, enquiry 32.7.
- The Property is not in an area subject to a Business Improvement District (BID) arrangement, and there is no proposal to create a BID that will include the Property (see CPSE.1 enquiries 18.9 to 18.11 and Practice note, Business Improvement Districts (BIDs)).
- There is no Community Infrastructure Levy (CIL) liability relating to the Property (see CPSE.1 enquiry 21 and Practice note, Community Infrastructure Levy: an overview).
- The Property does not include any land that is a freehold estate in commonhold, and there are no proposals to establish such an estate in land (see CPSE.1 enquiry 22 and Practice note, Commonhold: An overview).
- There are no new builds on the Property in the process of development. If there are, the Buyer should raise additional enquiries.
- The Property is not part of a Building to which the Building Safety Act 2022 (BSA 2022) applies, namely:
- A "higher risk building:" one that is (among other things) at least 11 metres high or have at least five storeys and contains at least two residential units (England) (section 65, BSA 2022).
- A "relevant building:" one that is (among other things) at least 11 metres or five storeys high and contains at least two dwellings (England) (section 117, BSA 2022).
If the BSA 2022 may apply, the Buyer should raise additional enquiries (see CPSE.1 enquiry 15 and CPSE.6 enquiry 21).
Agriculture and rural land standard enquiries
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Conditions
This document may be used free of charge subject to the Conditions set out in Practice note, Conditions for use of agriculture and rural land standard enquiries.
Particulars
Seller:
Buyer:
Property:
Transaction:
Seller's solicitors:
Buyer's solicitors:
Date:
Interpretation
1.In interpreting these enquiries, the terms set out in the Particulars have the meanings given to them in the Particulars and the following interpretation also applies:
- Buyer: includes tenant and prospective tenant.
- Conduits: means the pipes, wires and cables through which utilities and other services are carried.
- Property: includes any part of it and all buildings and other structures on it.
- Seller: includes landlord and prospective landlord.
2. The replies to the enquiries will be given by the Seller and addressed to the Buyer. Unless otherwise agreed in writing, only the Buyer and those acting for it may rely on them.
- References in these enquiries to "you" mean the Seller and to "we" and "us" mean the Buyer.
- In replies to the enquiries, references to "you" will be taken to mean the Buyer and to "we" and "us" will be taken to mean the Seller.
3. The replies are given without liability on the part of the Seller's solicitors, its members or employees.
4. The Buyer acknowledges that even though the Seller will be giving replies to the enquiries, the Buyer should still inspect the Property, have the Property surveyed, investigate title and make all appropriate searches and enquiries of third parties.
5. In replying to each of these enquiries and any supplemental enquiries, the Seller acknowledges that it is required to provide the Buyer with copies of all documents and correspondence and to supply all details relevant to the replies, whether or not specifically requested to do so.
6. The Seller confirms that pending exchange of contracts or, where there is no prior contract, pending completion of the Transaction, it will notify the Buyer on becoming aware of anything which may cause any reply that it has given to these or any supplemental enquiries to be incorrect.
Enquiries
1.Boundaries and extent
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Boundaries and extent
Verifying extent
This enquiry is concerned with verifying the extent of the Property. The questions are aimed at matching the title description of the Property with what appears on the ground as the physical extent of the Property, often marked by features such as walls, trees, ditches and hedges.
The Property will be defined in the title deeds and, if title is registered, the extent of the Property will be shown on the title plan. However, the Land Register is not conclusive as to boundaries and the boundary features may not correspond exactly with the title description. They may lie in either of the following positions:
- Wholly within the legal boundaries of the Property, in which case the Buyer will need to establish that nobody else has been using the land which lies between the legal boundaries and the boundary features.
- Outside the legal boundaries in which case the Buyer will wish to establish whether the Seller has acquired additional land by "adverse possession" or long usage.To do this, the Buyer needs to know the following:
- for how long any land beyond the legal boundaries has been used as part of the Property and whether there has been any objection to this use; and
- who has maintained the boundary features.
Enquiry 30 asks additional questions about watercourses, some of which also relate to boundary matters. See Drafting note, Drainage and watercourses.
Responsibility for boundary features
The Buyer needs to know who is responsible for maintaining boundary features. The title deeds may not contain information about the ownership of the boundary features or their maintenance, and in the absence of any clear indication the Buyer must find out what the Seller and others have regarded as their responsibilities. If available, the Seller should include details of all the following:
- Works to boundary features.
- Costs incurred.
- Who contributed and in what proportions.
If there is any boundary dispute, the Seller should give details here or in response to enquiry 20.
Plans
Although it is up to the Buyer to obtain suitable plans, the Seller should supply copies of whatever plans it has in the interests of speeding up the Transaction. It would be helpful if the Seller were to mark all the boundaries on a plan and indicate which belong to the Property using "T" marks along the inside of the boundary line.
Enquiry 1.5
Examples of what may be included in the reply to this enquiry include:
- Overhanging eaves.
- Flying freeholds.
Enquiry 1.6
Examples of what might be included in the reply to this enquiry include:
- Storehouses.
- Car parking areas.
- Plant and equipment rooms.
- Strips of land alongside boundaries which are used although they fall outside the legal title.
- Septic tanks.
Enquiry 1.7
The Buyer needs to establish whether there is any issue of adverse possession by the Seller. Enquiry 1.7 is concerned with land or premises which do not actually form part of the Property to which the Seller has paper title, but which the Seller is nevertheless still using or enjoying.
The reply to enquiry 1.7 will help identify whether the Buyer will acquire title to additional land by reason of the Seller's adverse possession, as well as whether use or occupation of other property will be needed by the Buyer to enjoy the Property once acquired.
NOTE: Some of these enquiries require the production of a plan. It is preferable to produce a single plan showing all the matters requested.
1.1In respect of all walls, fences, ditches, hedges or other features (Boundary Features) that form the physical boundaries of the Property:
1.5Please supply details relating to access or use of any parts of the Property that are situated beneath or above adjoining premises, roads or footpaths and show them on a plan and supply copies of any relevant licences for projections.
1.6Are there any adjoining or nearby premises or land which you use or occupy in connection with the Property?
2.Party walls
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Party walls
Where a boundary structure is jointly owned by the owners of the properties on either side of it, the structure may be a party structure. The Party Wall etc. Act 1996 gives statutory protection to the joint owners of a party wall or structure to prevent one owner carrying out work to the structure unilaterally without regard to the needs and wishes of the other. For more information, see Practice note, The Party Wall etc. Act 1996 (PWA 1996).
The Seller should give the Buyer copies of all notices, awards and agreements, whether made under the 1996 Act or by private agreement, and including any which are the subject of negotiation and settlement.
The Buyer should check all the terms, particularly those relating to payment of compensation, costs, or security.
To speed up the Transaction, the Seller could anticipate further questions about outstanding payments and arrangements for securing payments.
In respect of any party structures which form part of the Property and also in respect of any works of the kind which require notices to be served under the Party Wall etc. Act 1996 (1996 Act) please:
(a)confirm that there have been no breaches of the 1996 Act or any earlier legislation governing party structures;
3.Rights benefiting the Property
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Rights benefiting the Property
Generally rights benefiting the Property will pass to the Buyer. Examples of rights benefiting the Property are rights of way, rights of support, rights to light and rights to use Conduits serving the Property (such as water, drainage and gas pipes, and electricity and telephone cables).
Rights can be valuable, such as sporting rights, mineral rights, manorial rights and commons rights of grazing over neighbouring property. The Buyer should identify the legal nature of such rights, check that they will pass with the Property on completion and deal with any formalities required to acquire the rights. For example, is a fishing right a profit à prendre and, if so, is it appurtenant to the Property or held independently (in gross)? For more information, see Practice note, Fishing rights.
The Buyer should also check that any associated rights will also pass, such as rights to work minerals in addition to the mineral rights themselves.
Verifying the extent of manorial rights can be costly and time-consuming and may require evidence from estate records and unregistered title deeds (see LR Practice Guide 66 - Overriding interests losing automatic protection in 2013). Manorial rights lost their status as an overriding interest on 12 October 2013.
Rights may have been granted:
- Formally by deed.
- Informally by agreement but not documented.
- Informally through long use, with or without the knowledge or consent of the person over whose property the right is exercised.
If the title deeds do not show that the Seller has good title to exercise a right, the Buyer may be able to establish that the right has been granted informally or is in the course of being acquired. To do this the Buyer needs to establish:
- For how long and to what extent the right or purported right has been exercised (and this includes the frequency of exercise and whether the exercise has been over the whole or part of the relevant land or Conduits).
- Whether the right has been exercised with the knowledge or consent of the person over whose land the right has been exercised.
- Who owns and occupies the Property and the nature of that ownership.
- Whether there has been any objection to the exercise.
- Whether there are any maintenance obligations associated with the rights or whether anyone has assumed any responsibility for maintenance (for example, in relation to drains or footpaths).
- What costs have been incurred in exercising the rights, how costs are dealt with and the amount of any recent expenditure.
The Seller should supply details of all rights and arrangements benefiting the Property, even where these would be evident to the Buyer from an inspection. What is legally required may be different from what actually happens in practice, which may not be apparent. The Seller should supply copies of all relevant documents and correspondence.
Enquiry 3.2(b)
Express reference is made to plans because if the Right is an easement that is not formally documented, the Buyer will need to know the exact position, line or route of the easement. This is necessary to enable the Buyer to check the title to the servient tenement to ascertain whether the burden of the easement has been properly noted on it (without which the easement may not be binding on the owner of the servient tenement).
Enquiry 3.3
If for some reason an easement has been protected by a unilateral notice at the Land Registry, the Buyer will need to change the identity of the beneficiary of the unilateral notice. Where the servient tenement is unregistered and a caution against first registration has been registered to protect the easement, the Buyer may need to change the name and address on the cautions register or, if this is not possible, lodge a new caution in the Buyer's own name. Failure to change the beneficiary's name and address will result in any warning-off notice not being received.
NOTE: For the avoidance of doubt, Rights include, but are not limited to, sporting rights, manorial rights, commons rights, rights of light and rights in respect of mines and minerals, including rights of ownership and rights to work minerals.
3.1Unless apparent from the copy documents supplied, are there any covenants, agreements, rights or informal arrangements of any kind (including any which you may be in the course of acquiring) which benefit the Property (Rights)?
3.2In respect of any Rights benefiting the Property, and unless apparent from the copy documents supplied, please:
(a)if the Right is formally documented, show title and supply copies of all relevant documents, plans and consents;
(b)if the Right is not formally documented, supply evidence as to entitlement together with a plan showing the area over which the Right is exercised;
4.Adverse rights affecting the Property
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Adverse rights affecting the Property
Generally the burden of adverse rights to which the Property is subject will pass to the Buyer.
Adverse rights may affect:
- The use of the Property (such as the ability to graze animals in a particular field).
- Privacy (for example, in relation to a dwelling).
- Security.
- Normal farming operations.
Adverse rights commonly found in connection with agricultural land include:
- Footpaths, bridleways and public rights of access.
- Rights to use Conduits serving neighbouring property (such as water, drainage and gas pipes, and electricity and telephone cables).
- Mineral rights, sporting rights, manorial rights and commons rights.
- Covenants or restrictions affecting the use of land or buildings, preventing either the current agricultural or rural activities or any diversification away from them.
- Restrictive covenants preventing the occupation of a residential property by anyone not employed in agriculture. (The reply to enquiry 12.16 should reveal restrictions limiting occupation to agricultural workers, see Drafting note, Enquiry 12.16.)
Adverse rights would also include matters such as rights of third parties to park on the Property.
Adverse rights may have been granted:
- Formally by deed.
- Informally by agreement but not documented, or
- Informally through long use, with or without the knowledge or consent of the owner of the property.
- Unintentionally to another person, such as fishing rights or shooting rights that pass automatically to the tenant where they are not reserved in the lease (see Practice note, Fishing rights: Fishing rights could be granted unintentionally).
The Seller might reserve rights on sale, in which case the Buyer must establish the extent of the rights, who is to exercise them and how often, as this will affect the use and value of the Property.
See Drafting note, Rights benefiting the Property, as similar considerations apply.
Public rights may be acquired over property where, for example, part of the property is regularly crossed by members of the public. It is possible for a landowner to rebut a presumption of deemed dedication as a highway by displaying a notice that is inconsistent with dedication. If there are or have been any such signs erected, further enquiry should be made as to the extent of public use, its duration and as to how long the sign has been displayed.
Even if the title deeds are silent on third party rights affecting the Property, the Buyer will still need to establish that no such rights have been created informally or are in the course of being created. This is not confined to the acquisition of rights by private landowners. Public rights may also be in the course of acquisition, as explained in the preceding paragraph.
For more information, see Practice notes:
Enquiry 4.2
The reply to enquiry 4.1 should reveal any adverse rights in respect of mines and minerals to which the Property is subject, and the replies to enquiry 4.2 should provide further information about any such rights, including the extent to which they have been exercised. Depending on the replies to these enquiries and the contents of any documents provided, the Buyer might want to raise further enquiries in connection with mineral extraction, such as:
- Frequency of associated heavy vehicle traffic.
- Obligations to make good.
- Existence and amount of any associated payments to the Seller and whether the right to receive them will pass to the Buyer.
Enquiry 4.5
This enquiry concerns registered title and overriding interests. The Property may be subject to third party rights and interests that will not necessarily be apparent from the title deeds or from any inspection of the Property but will still bind the Buyer, whether or not the Buyer knows of them.
Enquiry 4.6
The impact of public rights of access on agricultural land can be significant, affecting privacy, security and use of the land.
Under Part 1 of the Countryside and Rights of Way Act 2000 (CROWA 2000) there is a public right of access to:
- Open country (mountain, moor, heath and down).
- Registered common land.
- Other land dedicated for access for the purposes of CROWA 2000.
The definition of access land excludes the categories of excepted land listed in Schedule 1 to CROWA 2000. Excepted land is land that qualifies to be access land, and as such may or may not appear on the access land maps. It does not, however, have the benefit of the access land rights because of either its location or use. Excepted land includes cultivated land, land covered by buildings and land within 20 metres of a dwelling. Enquiry 4.6(d) asks the Seller to provide this information as the Buyer will want to know which areas of the Property are free of public access rights.
The extent of access land is shown on maps maintained by Natural England for access land in England and by Natural Resources Wales for access land in Wales. The Buyer will also need to check these maps to identify whether the Property will be subject to public rights of access. The Seller may not know whether the Property has been designated as access land because the designation procedure does not include any requirement for service of a notice on the landowner. For more information about the maps in England, see the Natural England website. For information about the maps in Wales, see the Natural Resources Wales website.
CROWA 2000 gives landowners a discretionary right:
- To exclude or restrict access to their land for any purpose for up to 28 days each calendar year (except on certain summer Saturdays and Sundays and all bank holidays).
- To ban the taking of dogs onto their land in certain circumstances (for example, in the lambing season or to protect grouse).
The exercise of these discretionary rights is subject to the landowner giving notice on each occasion to the relevant authority (Natural England, Natural Resources Wales, the National Park Authority or the Forestry Commissioners) on terms prescribed by the Access to the Countryside (Exclusions and Restrictions) (England) Regulations 2003 (SI 2003/2713).
For more information on CROWA 2000, see Practice note, Public rights of access under Part I of the Countryside and Rights of Way Act 2000.
Enquiry 4.7
The purpose of this enquiry is to determine whether there is a possibility that an application may be made to register the Property as a town or village green. Where land has been registered as a town or village green, interference with it or encroachment on it is a criminal offence under section 12 of the Inclosure Act 1857 and section 29 of the Commons Act 1876.
Enquiry 22 on form CON 29O (Optional Enquiries of Local Authority) will reveal whether the Property, or any land which abuts the property, is registered as a town or village green under the Commons Registration Act 1965 or the Commons Act 2006. However, it will not reveal whether an application for such registration has been made but not yet determined by the registration authority, nor whether an application is likely to be made in the future.
It is not possible for a landowner to protect itself in any way against such an application being made, and additional enquiries are therefore needed. These may include making enquiries of the registration authority (to enquire whether there is a pending application for registration) and of the Seller.
In outline, section 15 of the Commons Act 2006 provides that anyone can apply to register land as a town or village green where "a significant number of the inhabitants of any locality, or of any neighbourhood within a locality, have indulged as of right in lawful sports and pastimes on the land for a period of at least 20 years" and either of the following applies:
- The use is continuing up to the date of the application.
- The use ceased after 6 April 2007 for land in England or after 6 September 2007 for land in Wales, but not more than two years before the application is made.
Because an application may still be made up to two years after the use ceased, enquiry 4.7 asks whether the Seller has any knowledge of recreational use of the Property by local people during the last ten years. This is a much longer period to enquire about than is necessary but, by erring on the side of caution, the enquiry is more likely to elicit relevant information where memories may be uncertain.
For more information, see Practice note, Common land and town and village greens: overview.
Enquiry 4.8
Part 9 of the Marine and Coastal Access Act 2009 (MACAA 2009) gives powers and imposes an obligation on Natural England and the Secretary of State to extend access to the English coast for recreational purposes. These powers are in addition to those that provide access under CROWA 2000. The duty to provide the route is described by two objectives:
- To secure public access to a new route around the whole English coast consisting of one or more long-distance routes that are available to the public for recreational journeys on foot or by ferry (the English coastal route).
- To provide a margin of land along the length of the coast that the public can enjoy (the coastal margin).
The margin is to exist in association with the English coastal route and is also intended to be enjoyed by the public. However, the margin does not have to be directly accessible from the English coastal route and excludes land designated as excepted land under the CROWA 2000.
For more information, see Practice note, Marine and Coastal Access Act 2009: coastal access.
Enquiry 4.9
The reply to this enquiry should indicate the existence of public rights of way that are unlikely to be revealed in pre-exchange searches. If the Property might be affected by rights of way, searches would generally include a search of the definitive map and statement, and the register of applications to modify the definitive map (see Practice note, Investigating the property: Pre-exchange searches: Definitive map and register of applications for modification).
The definitive map and statement are conclusive evidence as to the existence of a public right of way. However, there may be uncertainty as to its precise route, and the definitive map is not conclusive evidence of all public rights of way.
For more information, see Practice notes, Establishing highways at common law and Ancient highways.
Enquiry 4.10
The reply to this enquiry is particularly relevant if any future applications are made to modify the Definitive Map. If a previous landowner has deposited a section 31 statement and declaration, the applicant will require evidence going back from before the date the statement was deposited to support the modification requested.
Presumption of highway dedication
Under section 31(1) of the Highways Act 1980 (HA 1980), a way is presumed to be dedicated as a highway if both of the following apply:
- It has been actually enjoyed by the public as of right, and without interruption, for 20 years.
- It is not of such a character that public use cannot give rise to a common law presumption of dedication.
This presumption applies unless there is sufficient evidence that there was no intention during the 20 year period to dedicate it.
Section 31(6) statement and declaration to rebut presumption
The HA 1980 contains a procedure which a landowner can follow to rebut the presumption of deemed dedication. The landowner must deposit with the appropriate council:
- A statement identifying any ways that the landowner admits to being a highway and a map of the land (to a specified scale).
- A declaration that no additional land has been dedicated. The declaration must be lodged within the relevant time period, which is calculated from the date of deposit of the map and statement or, for subsequent declarations, the date that a previous declaration was lodged. The relevant time period is:
- in England in relation to applications made on or after 1 October 2013, 20 years; and
- in Wales, and in England in relation to applications made before 1 October 2013, ten years.
(Section 31(6), HA 1980 and article 4, Growth and Infrastructure Act 2013 (Commencement No. 3 and Savings) Order 2013 (SI 2013/1766).)
Local authorities are required to keep registers of information lodged under section 31(6).
For more information, see Practice note, Establishing highways at common law: Intention to dedicate.
NOTE: For the avoidance of doubt, Adverse Rights include, but are not limited to, sporting rights, manorial rights, rights in respect of chancel repair, rights in respect of telecommunications equipment, commons rights and rights in respect of mines and minerals, including rights of ownership and rights to work minerals.
4.1Unless apparent from the copy documents supplied, are there any covenants, restrictions, agreements, rights or informal arrangements of any kind to which the Property is subject (whether public or private and whether existing or in the course of acquisition) (Adverse Rights)?
4.2In respect of any Adverse Rights to which the Property is subject, and unless apparent from the copy documents supplied, please:
4.3Unless apparent from the copy documents supplied, does any person use any part of the Property with or without your permission?
4.4Have you, or to your knowledge has anyone else, applied to have any restrictive covenant affecting the Property modified or discharged?
4.5Unless full details appear from the copy documents already supplied, please supply details of any interests to which the Property is subject under Schedules 1, 3 or 12 to the Land Registration Act 2002.
4.6For the purposes of Part I of the Countryside and Rights of Way Act 2000:
(b)if the answer to enquiry 4.6(a) is "no", are you aware of anything that might result in the Property becoming "access land"; and
(c)if the answer to enquiry 4.6(a) is "yes", are there any exclusions or restrictions in force under Chapter II of Part I of the Countryside and Rights of Way Act 2000 and please describe, plotting on a plan as necessary, the extent and usage of any access rights under the Countryside and Rights of Way Act 2000; and
4.7Does the Property, or any property over which Rights are enjoyed, include any land that is currently used or has in the past ten years been used by members of the public for recreational purposes, whether with or without your permission?
4.8Is any part of the Property subject to coastal access rights under Part 9 of the Marine and Coastal Access Act 2009?
4.9Are you aware of any public rights of way claimed or exercised, or any reason for the modification of the existing rights over the Property or along its boundaries, including those in the course of being incorporated in the Definitive Map and including any ancient highways and green lanes? If so, please provide full details including indicating these rights on a plan.
5.Title policies
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Title policies
Insurance may be available to cover (for example) either of the following:
- Restrictive covenants where, for example, the nature of the covenant or the identity of the person having the benefit of the covenant is unknown.
- Lost title deeds (for example, in relation to rights benefiting the Property) or defects in title where the title to the land is unregistered.
Title insurance policies may benefit subsequent owners and mortgagees of the Property as well as the person who originally took out the insurance. The Buyer needs to be satisfied that the level of cover is still adequate. Any increase in the market value of the Property may make the level of cover inadequate, irrespective of any index-linking of the sum insured.
5.1Has anyone obtained or been refused insurance cover in respect of any defect in title to the Property, including any restrictive covenant or any lost title deed?
6.Access to neighbouring land
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Access to neighbouring land
It is often difficult or impossible for an owner or occupier to carry out repairs, alterations or other works to its own premises without going onto neighbouring land. If access is necessary but neighbours cannot agree arrangements, an application may be made to the court for an order giving access for work considered reasonably necessary for the preservation of the dominant land under the Access to Neighbouring Land Act 1992.
The Buyer will want details of all requests for access made and permissions given, whether made informally or by the court, including any applications and permissions relating to Conduits (such as for unblocking drains or laying cables) so that it is aware of any potential difficulties that are likely to arise.
6.1Has the owner or occupier of any neighbouring premises ever requested or been allowed or been refused access to the Property to carry out repairs, alterations or other works to any neighbouring premises or the Conduits serving them? If so, please give details, including copies of any access orders granted under the Access to Neighbouring Land Act 1992 (1992 Act).
6.2Have you or, to your knowledge, has any previous owner or occupier of the Property ever requested or been allowed or been refused access to neighbouring premises to carry out repairs, alterations or other works to the Property or the Conduits serving it? If so, please give details, including copies of any access orders granted under the 1992 Act.
7.Access to and from the Property
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Access to and from the Property
The Buyer needs to be satisfied that there are adequate rights of access to the Property. If access is direct to a public highway, no additional rights of way will be necessary and the Buyer will need to check only that there are no outstanding maintenance charges in respect of the highway (see enquiry 13). Access to agricultural and rural land is often obtained over private land or by a shared accessway.
Local authority enquiries should reveal whether roadways and footpaths are public highways (and therefore maintainable at public expense) but are unlikely to reveal whether the boundary of the property searched directly abuts the public highway for its full length. Supplementary enquiries at the relevant highway authority and/or the Highways Agency should disclose the extent of the area adopted as public highway. However, the quality of the plans provided by these agencies can vary and may be different, or differently scaled, from Land Registry plans. In some cases, it may be prudent to verify the results with a physical inspection and further enquiries.
7.1Does the boundary of the Property immediately adjoin a highway maintainable at public expense at, and for the full width of, each point of access?
7.2Are there any barriers to access to the Property that are controlled by a third party? If so, please give details.
8.Physical condition
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Physical condition
This enquiry relates to the physical condition of the Property.
A survey or inspection might not reveal past or intermittent defects and not everything can be inspected, such as hidden structure and Conduits. For this reason, the Seller is asked about the condition of the Property and, in answering, may be willing to give full details even where it considers that a defect or problem would be apparent on an inspection or would be revealed by a survey or has been treated or resolved.
The Seller may decline to give an answer. If the Seller does provide an answer, it may be liable for misrepresentation if the answer is incomplete or is misleading in some way.
Enquiry 8.1
Enquiry 8.1(a)
An inherent defect (sometimes referred to as a latent defect) is one that exists because of some fault or limitation in the construction or design of a building or the materials used to construct it. It may not be apparent on completion of the construction of the building, but may become apparent with time or because an intervening event triggers symptoms of the defect.
Enquiry 8.1(c)
The Seller should include in any reply, information about all defective Conduits affecting the Property, whether or not they form part of the Property.
Enquiry 8.1(e)
Flooding may ruin a crop and can affect long term productivity if the topsoil is washed away. River defences can be expensive to install and maintain and only limited funds are available through the Environment Agency.
A buyer will usually conduct a flood search to check if the Property is at risk of flooding and whether building insurance is readily available. It is also useful to ask the Seller whether any particular fields are prone to flooding, as this may affect where crops are planted or land is grazed or grassed.
Enquiry 8.3
Until the dangers from exposure to asbestos became known, asbestos was used extensively in building materials to provide protection from heat, fire and sound. It was found in, for example, floor tiles, pipe insulation, wall and ceiling panels, roofing and in decorative plasterwork. Regulations controlling the use of asbestos in buildings culminated in a total ban on the use of asbestos and asbestos containing materials in 1999. Nevertheless, much of what was used in the past is still in place, constituting a significant health risk to those involved in building, renovation or maintenance work.
The management of asbestos in buildings is highly regulated and, since 2004, regulations have included duties in relation to asbestos on those who control non-domestic premises, which include agricultural buildings.
Enquiry 8.3 (asking whether or not there is asbestos and whether any has been removed) is a starting point for the Buyer's information-gathering exercise relating to asbestos. The reply, whether positive or negative, does not absolve the Buyer of the duties it may have under the regulations.
Enquiries 8.4 and 8.5
The duties on those who control non-domestic premises are now found in regulation 4 of the Control of Asbestos Regulations 2012. Failure to comply with these duties is a criminal offence and penalties can be severe. Detailed guidance on the application and extent of the duty to manage under regulation 4 is contained in the Approved Code of Practice. For details on how to obtain this, see the website, Health & Safety Executive: Asbestos, which also has information on the duty.
Non-domestic premises are not defined in the regulations. The Health and Safety Executive advises that a broad approach will be taken (although this will ultimately be a matter for the courts to determine) and considers that they include commercial and industrial premises, service premises which members of the public will visit and certain parts of residential premises.
Regulation 4 requires the dutyholder to assess whether asbestos is present or liable to be present and, if so, to determine the risk from that asbestos and to manage that risk. The dutyholder must also prepare a written plan for managing the risk and ensure that all measures specified in the written plan are implemented and recorded. The assessment and the plan must be reviewed at regular intervals and at any time when there has been a significant change in the premises to which they relate.
A dutyholder is a person who has some contractual responsibility (for example, under a tenancy) for the maintenance or repair of the premises, or, in the absence of contractual responsibility, can exercise some control over access to and from the premises.
There may be more than one dutyholder in relation to particular premises, in which case each dutyholder's duties are determined by the nature and extent of the maintenance and repair obligations that it has. There is also a duty to co-operate with each dutyholder so far as necessary to enable a dutyholder to comply with its duties.
The Buyer will not be liable for any failure of the Seller to comply with its duties under Regulation 4, but, equally, the Buyer cannot rely on the risk assessments, written plans or any steps taken by the Seller. If the Buyer becomes a dutyholder following completion (and in many cases it will), it will have to carry out its own assessment after completion and otherwise comply with the duties in Regulation 4.
For more information, see Practice note, Control of Asbestos Regulations 2012.
The information and documents requested by enquires 8.4 and 8.5 only provide a starting point for the Buyer. The value and use of the information and documents will depend on the nature of the Transaction (freehold or leasehold, investment or vacant possession) and on the Buyer's plans for the Property (in particular whether it plans to carry out any works at the Property).
Enquiry 8.6
A particular substance on its own or used in a particular manner in a building may present no risk and no problems, but used in a different way, or in conjunction with another material, may be or become unstable or hazardous. In recognition of this, Good Practice in the Selection of Construction Materials was published in 1997 by Ove Arup & Partners, the British Council of Offices and the British Property Federation; an updated edition was published by the British Council for Offices in 2011.
Enquiry 8.6 adopts the approach taken in this guide. It does not ask whether any of a long list of particular substances has been used at the Property but is instead concerned with the presence of substances (other than asbestos) which may potentially cause problems. Whether there is an actual problem will be a matter for appropriately qualified consultants, having regard to relevant legislation and codes of practice.
Enquiry 8.7
This enquiry is concerned with materials (other than asbestos) that have been removed from the Property. The Buyer's concern is that any removal of potentially hazardous or dangerous substances has been carried out in accordance with relevant legislation and codes of practice.
Enquiry 8.8
If the reply to this enquiry indicates that buildings have been erected on the Property or that any extensions or major alterations have been carried out within the previous 12 years, the Buyer may wish to raise further specific enquiries.
Enquiry 8.10
Plant and equipment could include agricultural plant and machinery, security, access and alarm systems, CCTV, fixed fire protection systems, building management systems, air conditioning and heating systems.
A maintenance report may take the form of answers to a formal questionnaire and, as well as maintenance, could cover repair, replacement, treatment or improvements. It might be the only practical source of information on these matters. The Buyer might want reports on the main pieces of equipment included in the sale, such as the grain dryer or milking parlour.
Enquiry 8.11
The Buyer will be interested in all guarantees, warranties and insurance policies under which it may be able to claim in the event of a defect.
Enquiry 8.15
The Flood and Water Management Act 2010 (FWMA 2010) allows a designating authority to designate and protect structures or features of the environment belonging to third parties which affect flood and coastal risk management (section 30 and paragraph 4, Schedule 1, FWMA 2010). The explanatory notes state that such structures and features may include walls, channels, culverts, sluices, raised ground and embankments.
The designating authority means the Environment Agency (in England), Natural Resources Wales (in Wales), a lead local flood authority, district council or an internal drainage board (paragraph 1, Schedule 1, FWMA 2010).
The effect of designation is that no-one may alter, remove or replace a designated asset without the consent of the responsible authority (paragraph 5, Schedule 1). If a person contravenes this provision, the authority that made or adopted the designation (responsible authority) can serve an enforcement notice. Failure to comply with such a notice is an offence and would entitle the responsible authority to carry out works and recharge the costs of those works
Enquiry 8.17
This enquiry aims to identify any former excavations or voids on the Property that have been filled, such as gravel pits, mines or quarries. Buildings or other structures erected on former voids could be affected by subsidence, depending on the nature of the infilling works. The Seller might not provide full details, or might not be aware of all the former voids. An environmental search that includes historic data, and a mining search, should reveal former pits and voids.
Enquiry 8.18
On 1 January 2005, a new Part P of the Building Regulations came into force, relating to electrical safety. If electricity rewiring or electrical installation work has taken place since that date, the Buyer will want to see copies of the relevant certificate showing compliance with the Building Regulations. The Seller should provide this in reply to enquiry 12.1.
Enquiry 8.23
Building Regulations have applied to replacement glazing since 1 April 2002. If any replacement windows, roof windows, roof lights or glazed doors have been installed since that date, the Buyer will want to see copies of the relevant certificate showing compliance with the Building Regulations. The Seller should provide this in reply to enquiry 12.1.
8.2Is the Seller aware of any Green Deal Plan affecting the Property (whether entered into by the Seller, any predecessor in title, or any previous or current tenant or occupier)? If yes, please supply a copy of the relevant documentation.
8.3Has asbestos been used in the present structures forming part of the Property or of any premises of which the Property forms part, including Conduits, fixtures, plant and equipment?
8.4Please supply a copy of the most recent survey or assessment carried out in relation to the Property (whether by the Seller or by any other person) for the purposes of complying with regulation 4 of the Control of Asbestos Regulations 2012 (or any previous Control of Asbestos Regulations) or advise us when and where it can be inspected.
8.5Please supply a copy of the written plan and any other records prepared for managing asbestos in the Property or in any premises of which the Property forms part, or advise us when and where they can be inspected.
8.6Has any substance (other than asbestos) known or suspected to be unsuitable for its purpose, unstable or hazardous, been used in the present structures forming part of the Property, including Conduits, fixtures, plant and equipment?
8.7Has any asbestos, or any other substance known or suspected to be unsuitable for its purpose, unstable or hazardous, been removed from the Property in the past?
8.8Please identify:
which have been erected, made or carried out at the Property within the last 12 years.
8.9In respect of anything identified in reply to enquiry 8.8, please supply copies of any subsisting guarantees, warranties and insurance policies, for example, a new home warranty such as NHBC.
8.10In respect of all Conduits, fixtures, plant or equipment which will remain part of the Property or which will serve the Property after completion of the Transaction:
(b)please confirm that, so far as you are aware, there are no items requiring significant expenditure within the next three years;
8.11In relation to the guarantees, warranties and insurance policies identified in reply to enquiries 8.9 and 8.10, please confirm that:
8.12If the Property has been affected by any of the matters listed in enquiry 8.1, then in addition to any details already provided, please:
8.13If the Property has been affected by flooding, then in addition to any details already provided in reply to enquiry 8.1(e), please provide details of the source of the flood, the year (or years) in which it occurred, and whether the flooding is seasonal.
8.14Have any flood defences been installed on the Property or its boundaries? If so, please specify who was responsible for their installation.
8.15Are you aware that any structure or feature on the Property is designated under the Flood and Water Management Act 2010, or is under consideration for such designation by the relevant authority? If so, please provide details.
8.16Are there any pipelines, cables, wires, underground tanks, drains or ditches not apparent on physical inspection that could interfere with normal farming operations?
8.17Has there been any filling of former excavations or voids on the Property, such as gravel pits, mines or quarries? If so please:
8.18Since 1 January 2005, have either of the following taken place on the Property:
If so, please supply a copy of the certificate issued to confirm that any such rewiring or installation work was carried out in accordance with building regulations.
8.19Has any part of the electrical installation on the Property been tested? If so, please specify when it was tested and provide copies of any test certificates.
8.20If there is central heating on the Property please provide details of:
8.21Do all gas appliances and associated fittings on the Property comply with the Gas Safety (Installation and Use) Regulations 1998 (SI 1998/2451)?
8.22If there are any burglar alarms or other security devices fitted to the Property, please confirm that these are included in the sale. If so, please supply details of any applicable guarantee and maintenance agreement and confirm that the burglar alarm or security device is in full working order.
9.Contents
Close Drafting Note
Contents
The Buyer and the Seller need to agree what items will be left at the Property on completion of the Transaction and what items will be removed, and any effect this may have on the price. This enquiry is to clarify what the Buyer expects to receive and what the Seller must do to give vacant possession of the Property. Items of fixed equipment on agricultural land are costly to buy and expensive to replace, and can range from items such as fencing to barns and stables.
The general rule, unless the parties agree otherwise, is that:
- Fixtures remain in the Property and pass to the Buyer.
- Chattels do not pass and the Seller is legally obliged to remove them prior to completion.
The distinction between fixtures and chattels can be difficult to determine, which is why the enquiries avoid these terms in favour of "item". The courts have evolved tests by reference to the degree and purpose of annexation to the property. Generally if something has been fixed to a property so that it is difficult to remove without causing damage and was fixed to improve that property permanently, it will be a fixture.
Rather than rely on this imprecise test, however, it is prudent for the parties to come to a clear agreement. In the case of telecommunications links and equipment, replies should clearly set out what will be removed, what will remain, and what is the undertaker's property.
Enquiries 9.1 and 9.3
It is particularly important that the parties agree whether fixed plant is to be removed on completion or is to remain in the Property. Fixed plant tends to be heavy, difficult to move and expensive and generally will play a significant part in the business or use of the Property. It may not be clear whether it should be treated as a fixture or a chattel, and any misunderstanding between the parties as to whether it stays in the Property on completion or is removed may have serious consequences. These could include items such as a lock-up or a secure storage unit.
Enquiry 9.4(b)
Examples of third party claims which may affect items that the Seller is proposing to leave at the Property following completion include credit or conditional sale agreements, hire and hire purchase agreements, finance and leasing agreements. Some of these may contain title retention clauses, which would mean that the Seller does not own the item in question. In relation to such items there may be some overlap with enquiry 9.5.
Enquiry 9.5
Items which will remain in the Property but which will belong to a third party include telecommunication masts, advertising hoardings, telephones and water or gas meters.
Enquiry 9.6
These enquiries are drafted on the assumption that the Seller will give vacant possession, and any tenants will be leaving on or before completion. The Buyer may not appreciate that certain items on the Property belong to a tenant, rather than the Seller, and might be removed by the tenant before completion. This enquiry aims to flush out any such items. These might include workshop facilities (such as compressors), grain dryer, aeration fans in the grain store, pipework for the grain store, milking parlour, lighting and fixed CCTV and security systems.
9.1Please list any items which are currently attached to the structure of the Property in some way (e.g. wired, plumbed, bolted) and which you propose removing from the Property prior to completion of the Transaction.
9.2Please confirm that you will make good before completion any damage caused by the removal of any fixtures and fittings.
9.3Please list any items (other than those belonging to an occupational tenant) that are not attached to the structure of the Property, and which you propose leaving at the Property after completion of the Transaction.
10.Utilities and services
Close Drafting Note
Utilities and services
Enquiry 10.1
There will often be a variety of buildings on agricultural or rural land, including residential properties. Utilities and services may include:
- Water.
- Drainage of foul and surface water, including drainage to septic tanks.
- Gas.
- Oil.
- Electricity.
- District heating schemes.
- Telecommunications, including telephone and internet access.
- Cable and satellite communications systems.
Connection of services is important when buying agricultural land for three reasons:
- Services may cover long distances and the cost of replacing and maintaining these services can be considerable.
- Services may need to be upgraded, for example, to a three-phase electricity supply, which can be expensive.
- It is important to establish the exact position of any buried pipes or service media to avoid interfering with farming operations, such as ploughing.
Enquiry 10.2
Although usual for a property to be connected to mains utilities (such as water, drainage, gas and electricity), this is not always so. Also, there may be more than one source of the utility supply. Water may come from a mains supply and a well or be drawn directly from a river or lake. Electricity may come from a private generator instead of or in addition to the mains supply.
If Conduits do not run directly from a highway maintainable at public expense, details of the rights to use the Conduits should be given in reply to enquiry 3.
Enquiry 10.3
Some buildings with communal heating, or served by a district heating network, are subject to the Heat Network (Metering and Billing) Regulations 2014 (SI 2014/3120). It is useful for the Buyer to know this in advance as it has implications for billing and charging for heat and hot water services. If the Seller has previously registered under those Regulations, the Buyer may need to raise further questions.
Enquiries 10.4 and 10.5
Although the Buyer will not generally be concerned to see supply contracts for mains utilities, they will need to see copies of all supply contracts and consents which either will continue to affect the Property after completion or which it may wish to take over. An example would be a water abstraction licence. Details of all contracts and licences are requested so that the Buyer can decide what may be of interest.
10.1Please provide details of the utilities and other services connected to or serving the Property.
10.2In respect of each utility or service listed in reply to enquiry 10.1, please state:
10.3Has a notification been submitted in relation to the Property pursuant to regulation 3 of the Heat Network (Metering and Billing) Regulations 2014? If so, please supply a copy.
10.5Please provide details of any contracts for the supply of services carried out at the Property (e.g. security or cleaning).
10.6In respect of each utility or service listed in reply to enquiry 10.1, please provide a plan showing the routes of the Conduits, the locations of their connections to the mains and the locations of any meters.
10.7In respect of any utility or service listed in reply to enquiry 10.1 that is not connected to the mains, please provide details of how the utility or service is supplied to or serves the Property.
11.Fire safety and means of escape
Close Drafting Note
Fire safety and means of escape
Since 1 October 2006, fire safety for most non-domestic premises is dealt with primarily under the Regulatory Reform (Fire Safety) Order 2005 (SI 2005/1541) (Fire Safety Order 2005).
The extent to which the Buyer will need to have regard to the Fire Safety Order 2005 will depend on the character of the Property. If further questions are appropriate, for example, if the Buyer is likely to be responsible for fire precautions in co-ordination and co-operation with others, raise the additional enquiries in relation to fire safety contained in CPSE.1.
The burden of compliance with the requirements of the Fire Safety Order 2005 lies with the "responsible person", who is defined in article 3 of the Fire Safety Order 2005 to be:
- In relation to a workplace, the employer, to the extent that the workplace is under the employer's control.
- If there is no employer, the person who has control of the premises for the purposes of a trade, business or undertaking (whether or not for profit).
- Otherwise, the owner, which would be the case in relation to a newly constructed building that has yet to be occupied.
There may be more than one "responsible person" in respect of the same premises (for example, if the Property forms part of a building in multiple occupation). Where there is more than one responsible person in respect of a single property, each has a duty to co-operate, to co-ordinate fire safety measures and to give the others information on fire safety risks.
Fire safety duties are also imposed on any person who has, to any extent, control of the premises, insofar as the fire safety duties relate to matters within that person's control (article 5(3), Fire Safety Order 2005).
A person with obligations under a lease or any other contractual agreement for the maintenance or safety of the premises is considered to have control of the premises (article 5(4), Fire Safety Order 2005).
The duties include the following:
- A duty to take whatever fire precautions are reasonably practicable to ensure that employees at or in the vicinity of, the premises are safe, and to take whatever fire precautions are reasonably required to ensure that the premises are safe for "relevant persons" (employees and non-employees who are lawfully at or in the vicinity of the premises and at risk from a fire at the premises).
- A duty to carry out an assessment of the fire risks at the property, with a view to identifying what fire precautions are needed to ensure that the premises are safe for "relevant persons".
- A duty to keep the fire risk assessment under review.
- A duty to keep a record of significant findings of any fire risk assessment, of any precautions that have or will be put in place to address findings and of any group of people identified in the risk assessment as being particularly at risk. Note that certain people are exempt from this requirement, for example, employers with fewer than five employees.
- A duty to maintain fire-fighting equipment, ensure that the premises are maintained to ensure the safety of "relevant persons" in the event of fire, and to keep fire exits clear.
The fact that the obligations rest with people who are currently responsible in some way for the property and what is going on in it, means that a buyer is going to be under a duty to comply with the Fire Safety Order 2005 as from the moment of purchase. There is no lead-in period, so in theory at least, a buyer can be liable for breach at the point of completion. It follows from this that:
- The Buyer needs to collect as much information as possible before completion to be as prepared as possible.
- Whatever information the Seller has may be of limited use. The Buyer cannot produce the Seller's risk assessment in satisfaction of the Buyer's obligations and many of the factors affecting the risk assessment are likely to have changed with the Buyer's ownership.
Note that breaches and notices served by enforcing authorities that relate to fire safety may also be disclosed in response to enquiry 14 (Statutory and other requirements) or enquiry 19 (Notices).
Enquiry 11.1
The solicitors acting for the Buyer are unlikely to want the fire safety records themselves, so the enquiry asks where the papers may be inspected. The Buyer may find the records useful, although they will not absolve the Buyer of its responsibilities under the Fire Safety Order 2005.
The enquiry refers to "any records" because:
- The duty to keep records goes beyond the duty to carry out a fire risk assessment.
- The records may not have been made by the Seller itself.
Note that a fire risk assessment may not be a single document, but a collection of documents.
Enquiries 11.2 and 11.3
This information may be disclosed as part of the response to enquiry 11.1, but it is worth asking the question directly as in practical terms the means of fire escape is one of the most significant issues for the Buyer and for the Buyer's compliance with its duties under the Fire Safety Order 2005.
Particular attention will need to be given by the Buyer to any agreements that authorise use of the fire escapes:
- There may be conditions of use.
- The right to use may be personal to the Seller
- There may be contractual obligations to maintain the fire escapes, that may be in addition to or go beyond the obligations that the Buyer will be under by virtue of the Fire Safety Order 2005.
- There may be conflicts between the contractual obligations and contractual restrictions on the use of fire escapes and the statutory duties.
Agricultural property will not necessarily always include a margin of land surrounding a building (so that escape onto that margin is the designated route). There may be agricultural buildings that rely on fire escape across neighbouring land, in which case enquiry 11.3 will be relevant.
In this enquiry, Fire Safety Order 2005 means the Regulatory Reform (Fire Safety) Order 2005 and any regulations made under it.
11.1Please advise us where we may inspect any records in relation to the Property, made for the purposes of complying with the Fire Safety Order 2005, including any records of findings following a fire risk assessment of the Property.
12.Planning and building regulations
Close Drafting Note
Planning and building regulations
Planning law is contained in a number of statutes and subordinate legislation, principally the Town and Country Planning Act 1990 (TCPA 1990), the Planning (Listed Buildings and Conservation Areas) Act 1990, the Planning (Hazardous Substances) Act 1990 and the Planning (Consequential Provisions) Act 1990.
Planning permission is required for the "carrying out of any development on land" (section 57(1), TCPA 1990).
Development is defined as the "carrying out of building, engineering, mining or other operations in, on, over or under the land or the making of any material change in the use of any buildings or other land" (section 55(1), TCPA 1990).
For further information, see Practice notes:
In addition to the usual planning enquiries, two areas require particular attention when looking at planning issues in relation to agricultural and rural land: permitted development and use.
Permitted development
In England, the Town and Country Planning (General Permitted Development) Order 1995 (SI 1995/418) (GPDO 1995) and in Wales , the Town and Country Planning (General Permitted Development) Order 1995 (SI 1995/418) (GPDO 1995) grant deemed planning permission for certain agricultural development including:
- Agricultural buildings below a certain size. These could include buildings such as slurry tanks, depending on their size.
- Forestry buildings and forestry roads.
- Caravan sites and related buildings in some circumstances.
For further information, see Practice notes:
As a result, certain farm buildings including barns and stables may not require express planning permission from the local planning authority, instead they have the benefit of deemed planning permission under the GPDO 2015 or GPDO 1995.
If planning permission was required for the development, but was not obtained, no enforcement action can be taken four years after the date on which the operations were substantially completed. This four-year period applies to breach of planning control relating to building, engineering, mining or other operations in, or over or under the land.
For information on the immunity periods for breaches of planning control, see Practice notes:
For information on planning enforcement generally, see Planning enforcement toolkit.
Use and diversification
If there has been diversification into non-agricultural activities, planning permission may be required for changing the use of the land and buildings. The Buyer should check that any current use of the Property is lawful. Diversification on farming holdings is becoming increasingly common, for example:
- Converting any farm buildings into holiday accommodation.
- Caravan sites.
- Farm shops.
- Food processing units.
- Excavating an amenity lake.
- Allowing public access for a farm trail.
- Changing from grazing horses to equestrian use, such as a stud farm.
For background information, see Practice note, Agricultural buildings: permitted development rights for certain changes of use.
For details of the immunity periods for unauthorised material changes of use, see Practice notes:
Enquiry 12.1
The importance of establishing that Building Regulations consent was obtained, where required, and that works were carried out in accordance with the approved plans, was illustrated in Cottingham v Attey Bower and Jones [2000] EGCS 48 (ChD).
Building Regulations completion certificates were introduced into the Buildings Regulations in 1991. The production by the Seller of a completion certificate will be evidence (but not conclusive evidence) that works were carried out in accordance with Building Regulations. Building Regulations approval or completion certificates are not necessary where the work can be self-certified as complying with the Building Regulations.
Self-certification can be carried out by someone who is a member of a competent person scheme under the Building Act 1984. For information on the Competent Person Scheme, see DCLG: Competent Person Schemes.
For further information about building regulations, see Practice note, Building regulations: an overview.
Enquiry 12.2
Full planning permission is usually granted subject to a condition requiring the development to be started within a specified time period, usually three years from the date of the permission (section 91, TCPA 1990).
For information about the lawful implementation of planning permissions, see Practice note, Planning permission: lawful implementation.
Enquiries 12.3, 12.4, 12.5
Established use certificates are no longer granted. Since 27 July 1992, the equivalent is a certificate of lawfulness of existing use or development (CLEUD) or a certificate of lawfulness of proposed use or development (CLOPUD) (sections 191and192, TCPA 1990).
Existing established use certificates are still valid and can be relied upon, however, and so their existence is still relevant for the Buyer. There is a procedure for converting an established use certificate into a CLEUD.
For further information about CLOPUDs and CLEUDs, see Practice note, Lawful development certificates.
Enquiry 12.4
The existing buildings on the Property may be authorised by means of an express planning permission, the GPDO 2015 or GPDO 1995 or by a CLEUD.
Enquiries 12.5 and 12.6
The existing use of the Property may be authorised by means of an express planning permission, under a CLEUD or by the GPDO 2015 or GPDO 1995.
The Property may have a single use or a single use with an ancillary use. Where one use is ancillary to another (for example, storage associated with a shop) a separate permission for the ancillary use will not generally be required.
It is possible for the Property to have more than one use where the further uses are not ancillary but are main uses in their own right, such as a shop at ground level with a flat above. Separate permissions are required for each main use but each main use may still have its own ancillary uses.
For further information, see Practice notes:
Enquiries 12.7, 12.8 and 12.9
Where planning permission is required for a development (whether building works or a change of use), the local planning authority can take enforcement action if the development is carried out without planning consent.
For details of the immunity periods for unauthorised material changes of use, see Practice notes:
Where a building is listed under the Planning (Listed Buildings and Conservation Areas) Act 1990, there is no time limit for enforcement action in respect of a breach.
A breach of listed building control can be enforced against an owner no matter when or by whom the breach was committed. For further information, see Practice note, Breach of listed building control: listed building enforcement notices.
A practical problem may arise because when a property is listed, the listing may fail to record the state and extent of the listing, making it difficult for buyers, sellers and local authorities to establish whether any breach has occurred. Works that need to be considered include both internal and external works to any buildings, and also works within the curtilage of the building.
For further information on listed buildings and listed building consent generally, see Practice notes:
Enquiry 12.10
Third parties may challenge the grant of a consent or a certificate either by judicial review or by appeal in the courts under procedures provided in the Planning Acts.
For further information, see Practice notes:
Enquiry 12.12
Outline planning permissions are permissions for the construction of a building that are granted in principle, subject to reserved matters. The outline planning permission cannot be implemented until the reserved matters are approved.
Many planning permissions come with conditions such as a time limit for implementation, restrictions on use of the newly developed property or requirements for landscaping and the like.
In addition, every planning permission granted in England pursuant to an application lodged on or after 12th February 2024 is deemed to be subject to a condition that development may not be begun unless a "biodiversity gain plan" (see below) has been submitted to and approved by the local planning authority. The commencement date for "small sites" and certain other properties is slightly later: 2nd April 2024. Householder applications are exempt.
A biodiversity gain plan sets out how the developer intends to achieve a biodiversity net gain of at least 10%, either on-site, off-site or by the purchase of statutory credits. For more details, see Biodiversity net gain on developments under the Town and Country Planning Act 1990 .
The relevant legislation is schedule 7A to the Town and Country Planning Act 1990, as inserted by s.98 of and schedule 14 to the Environment Act 2021. Separate arrangements apply in Wales.
Enquiry 12.12 refers to any planning permission with conditions which need to be satisfied for development to proceed, and asks what has been done to satisfy such conditions. By checking the date when a planning application was lodged, the buyer can work out whether the permission is deemed to be subject to a biodiversity net gain condition. Some planning authorities may insert an express condition.
The response to enquiry 12.12 is a suitable place for the seller to provide a copy of its biodiversity gain plan and to confirm whether the planning authority has approved this.
For further information on outline planning permissions, see Practice note, Planning permissions: an overview.
Enquiry 12.14
Where a breach of planning control has been concealed, an LPA can apply to a magistrates' court for a planning enforcement order, after the statutory time limit (four or ten years) has expired (section 171BA(1), TCPA 1990).
For further information on planning enforcement orders, see Practice note, Enforcement of concealed breaches of planning control.
The purpose of this enquiry is to create an audit trail that might help persuade a court (should a concealed breach be discovered that occurred in the past) that the current owner was innocent of it, so should not be the subject of a planning enforcement order.
Enquiry 12.15
If the Property is listed as an asset of community value, and the Transaction is a relevant disposal (which includes a disposal of a freehold estate with vacant possession) and is not an exempt disposal, the Seller must notify the local authority of the proposed Transaction and cannot sell until a certain period of time has passed. This time period gives the community the opportunity to develop a bid and raise capital to buy the land.
The right to bid provisions are contained in sections 87 to 108 of the Localism Act 2011 (LA 2011), with more detail in relation to England set out in the Assets of Community Value (England) Regulations 2012 (SI 2012/2421). These provisions are not yet in force in Wales. (. These provisions do not give anyone right of first refusal and do not restrict to whom the Seller can sell their land or at what price.
Every local authority is required to maintain a list of land in its area that is land of community value. Land is automatically removed from the list after five years.
A building or other land will have community value if its main use furthers the social well-being or social interests of the local community, or if it has been used for such a purpose in the recent past and it is realistic to think that it will be used for the same purpose again within the next five years. Examples might include city farms, village shops, local pubs, community centres and markets. Certain types of land may be exempted by regulations. However, the local authority will only list the land following a successful nomination.
Exempt disposals include gifts, disposals to family members or by personal representatives, business transfers as a going concern and disposals between connected companies. The regulations also exempt disposals in pursuance of a planning obligation, an option or pre-emption right made before the land was listed, and disposals by a mortgagee under a power of sale.
For more information, see:
- Assets of community value: frequently asked questions.
Enquiry 12.16
An agricultural occupancy restriction (ag tag) limits the occupation of a property to a person employed in agriculture, and is often imposed as a condition of planning consent for farm dwellings. Occupancy tends to be restricted to people solely or mainly working in agriculture in the locality. Agriculture is defined in section 336 of the TCPA 1990.
This restriction should show up in a local authority search but can also be imposed in a covenant on the title. Such a restriction will limit the market value of a property and could affect the Buyer's use and enjoyment of the Property.
Where an ag tag has been imposed by a planning condition, if that condition has been breached continuously for a period of ten years, the breach may be immune from planning enforcement action. In these cases a CLEUD may be obtained for use of the property without the condition.
Enquiry 12.19
A tree preservation order (TPO) is the principal regulatory means for protecting trees. The purpose of a TPO is to protect trees of amenity value to local communities (including those under threat from new development). For further information, see Practice note, Tree preservation orders (TPOs): obtaining consent to carry out works to a protected tree.
Enquiry 12.20
Ancient monuments are often found in rural areas. Although a local land charges search should reveal any property listed as being of special architectural or historical interest, the details given are brief and often it is difficult to know the extent and location of the site without local knowledge of the Property.
Where a site is on the Property, the Buyer will want to know whether the Seller has complied with the general statutory responsibilities and the specific requirements of the listing. They will also want confirmation that alterations to the Property were carried out in accordance with any consents required.
For more information, see Practice note, Scheduled monuments.
12.1Please supply a copy of any planning permission, approval of reserved matters, prior approval, building regulations approval, building regulations completion certificate, self-certification, listed building consent and conservation area consent which relates to the Property, and of any consent for the display of advertisements at or from the Property (each a Consent).
12.3Please supply a copy of any of the following certificates (each a Certificate) which relate to the Property:
12.6What is the existing use of the Property, when did it start and has it been continuous since? If there is more than one existing use please specify each use and indicate which are main and which are ancillary, and when each use started.
12.7Where the Property is not listed under the Planning (Listed Buildings and Conservation Areas) Act 1990, please provide details of any building works, demolition, mining or other engineering works that have taken place at the Property within the past ten years and confirm that all necessary Consents were obtained for them.
12.8Where the Property is listed under the Planning (Listed Buildings and Conservation Areas) Act 1990, please provide:
12.9Have there been any actual or alleged breaches of the conditions and limitations and other terms in any Consents or Certificates?
12.10Is any Consent or Certificate the subject of a challenge in the courts either by way of judicial review or statutory proceedings? If not, is a challenge expected?
12.12If there is any existing outline planning permission relating to the Property or other planning permission with conditions which need to be satisfied in order for development to proceed, what has been done to obtain approval of reserved matters and/or satisfaction of those conditions?
12.13Please supply a copy of any letters or notices under planning legislation which have been given or received in relation to the Property.
12.14Please confirm that you are not aware of any circumstances by reason of which a planning enforcement order might be made as a result of an apparent breach of planning control that has been deliberately concealed by you or (to your knowledge) any other person.
12.15Have you notice of any matter, fact or thing that would lead you to believe that the Property or any part of it is to be listed in the local authority's list of assets of community value?
12.16Are there any restrictions on any part of the Property limiting its occupation to agricultural workers? If so:
12.17Has an application ever been made for a certificate of lawful use or development in relation to the Property or any part of it?
12.18Are you aware of any proposals for major development in the near vicinity (between 200 metres and 1000 metres) that would affect the use and enjoyment of the Property?
12.19Are any trees on the Property subject to a tree preservation order? If so, have there been any breaches of that order?
13.Statutory agreements and infrastructure
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Statutory agreements and infrastructure
The Buyer will make a local authority and local land charges search. The results should disclose agreements and notices relating to roads, drains, public health matters and repair obligations. The following are examples of the types of agreement and notice about which the Buyer will need information:
- Agreements under section 38 of the Highways Act 1980.These impose obligations on a developer to make up roads and footpaths to a standard required by the local highway authority and to maintain them for a specified period. The road or footpath is then adopted by the highway authority and maintained at public expense. Normally the agreement is supported by a bond to pay for completion of the works if the developer fails to carry them out.Section 38 agreements do not run with the land so, if the Seller is party to one where any obligations remain outstanding, the Buyer may need to take an assignment of it to ensure that the remaining obligations are performed and prevent the closure of the road by the highway authority. A local highway authority may agree or resolve to make up roadways or footpaths at the cost of owners of premises fronting the roadway. The Buyer will require full details to identify potential liabilities.
- Agreements under section 104 of the Water Industry Act 1991.These impose obligations in relation to sewers comparable to those relating to roads under section 38 of the Highways Act 1980.
- Planning obligations under section 106 of the TCPA 1990.These may require a landowner to carry out specified works or they may impose restrictions on the development or use of land or require money to be paid to a local planning authority. Such obligations are normally entered into as part of negotiations for planning permission and may provide for the making up and adoption of roads and footpaths.
- Conservation Covenants under Part 7 of the Environment Act 2021.Any conservation covenants on the land are registered as a local land charge, see Practice note, Conservation covenants.
The local authority search may not always disclose all relevant agreements and notices, which is why the detailed questions in enquiry 13 are worth raising with the Seller.
Enquiry 13.1
Examples of the types of agreement to which this enquiry relates include:
- Agreements relating to the construction and adoption of roads, footpaths, drains and sewers, such as those mentioned above.
- Agreements relating to the laying of gas pipes, electricity and telecommunications cables, wires and other equipment including transformer substations.
- Water abstraction licences.
- Conservation covenants
Enquiry 13.2
This enquiry covers, for example, obligations on the Seller to enter into any highway, water or sewerage agreements or a section 106 planning agreement, or conservation covenant.
Enquiry 13.3
The reply to this enquiry might include matters such as a road closure order, a diversion order, a traffic flow order (which, if implemented, might affect access to the Property or the ability to park near or deliver to the Property) or a food hygiene order.
Enquiry 13.4
If the Seller is aware of anything which is not yet, but will be, registered it should be disclosed here, unless already mentioned in reply to enquiry 13.1.
Some matters are not required to be registered as a local land charge, such as planning contravention notices and notices of intention to adopt a highway.
Enquiry 13.6
The local authority, or other public or private bodies such as the Homes and Communities Agency, can make financial grants. These are generally made to promote development and improvement and may be subject to repayment obligations in certain circumstances.
The Buyer needs to know what grants have been made, by whom, for how much and on what terms and, in particular, will need to know about repayment obligations to include appropriate provisions in the sale contract.
Enquiry 13.7
The Seller may have received compensation for matters such as:
- Compulsory purchase of part of the Property under section 226 of the TCPA 1990.
- Extinguishment of easements or covenants under section 237 of the TCPA 1990.
- Compulsory purchase to facilitate the construction of Crossrail or the HS2 railway line under the legislation governing those projects.
13.1In relation to any agreements affecting the Property that have been entered into with any planning, highway or other public authority or utilities provider:
13.2Are you required to enter into any agreement or obligation with any planning, highway or other public authority or utilities provider or responsible body for a conservation covenant under Part 7 of the Environment Act 2021?
13.3Are there any proposals relating to planning, compulsory purchase powers, infrastructure (including parking, public transport schemes, road schemes and traffic regulation) or environmental health which, if implemented, would affect the continued use of the Property for its present purposes?
13.4Is there anything affecting the Property that is capable of being registered on the local land charges register but that is not registered, such as a conservation covenant?
13.5Please confirm that the Property is not subject to any charge or notice remaining to be complied with.
14.Statutory and other requirements
Close Drafting Note
Statutory and other requirements
Enquiry 14 addresses potential liabilities in connection with the Property and concentrates mainly on statutory liabilities.
Liability under statute may be strict, which means that the person responsible for the breach will be liable regardless of the state of their knowledge about the breach. This is often the case with health and safety legislation, which is designed to protect the welfare of employees and occupiers of premises.
Liability may, in other cases, depend on the state of knowledge of the person responsible for the breach. Statute will provide who is responsible for compliance.
Liability may rest with the occupier and/or the owner. The owner may be defined to include the landlord, any superior landlord and/or the freeholder. Some legislation, such as fire regulations, extends the meaning of owner to include anyone in receipt of rents and so may include a trustee of the landlord or a managing agent.
Enquiry 14.1
The enquiry is wide and addresses all legislation that may affect the Property, including the new concept of a conservation covenant which a responsible body may agree with a landowner and then register as a local authority land charge. See Practice Note: Conservation Covenant.
To the extent not covered elsewhere, the reply should cover all breaches of legislation, such as breaches of environmental and conservation legislation, breaches of legislation governing the use, management and disposal of manure, slurry, effluent and farm waste, breaches of building regulations, breaches of fire regulations, gas safety legislation, highway and drainage obligations, section 106 agreements, planning control, waste storage and management, hazardous substances, advertising control, and bye-laws, such as those relating to drainage.
A byelaw is a form of delegated legislation made under an enabling power established by legislation that is confirmed by the Secretary of State of the relevant government department (usually the Department of Communities and Local Government). Byelaws commonly require something to be done or refrained from in a particular location and are accompanied by a sanction or penalty for non-compliance. Bye-laws are not local land charges and will not show up on a local land charge search (see section 2 of the Local Land charges Act 1975). For more information on bye-laws, see Practice note, Bye-laws.
For more information on advertisement control, see Practice note, Advertisement control: is consent required to display an advertisement?
Enquiry 14.2
This enquiry is not limited to statutory matters. It does not cover works to be carried out to anything other than the Property and so will not include section 38 highway agreements or section 106 agreements unless the land over which the works are to be carried out is included within the definition of the Property.
Enquiry 14.3
This enquiry is designed to catch licences and consents such as water abstraction licences and liquor licences, and activities controlled by law.
Enquiry 14.4
Replies to this enquiry may be affected by the Construction (Design and Management) Regulations in 1994, 2007 or 2015 (referred to in this note as CDM 1994, CDM 2007 and CDM 2015).
CDM 1994 applied to all construction work carried out between 31 March 1995 and 5 April 2007 (with a few exceptions including small projects where the number of people working on the project at any one time was not expected to exceed four and the project was not expected to last longer than 30 days).
The CDM 2007 replaced CDM 1994 from 6 April 2007. They covered all construction work, including small projects. There were limited exceptions relating to mineral extraction works and transitional provisions for construction projects that were started under CDM 1994 and continued under CDM 2007. The last of these transitional provisions came to an end on 5 April 2012. Under CDM 2007 the definition of construction work was extended to include:
- "construction, alteration, conversion, fitting out, commissioning, renovation, repair, upkeep, redecoration or other maintenance (including cleaning which involves the use of water or an abrasive at high pressure or the use of corrosive or toxic substances), de-commissioning, demolition or dismantling".
- Installing or removing, for example, mechanical and electrical equipment or telecommunications equipment (regulation 2(1), CDM 2007).
CDM 2015 replaced CDM 2007 from 6 April 2015. They cover a very similar range of construction work and impose similar duties to keep a Health and Safety file for the Property (though they exempt small projects with a sole contractor). Transitional provisions apply for six months.
A complete Health and Safety file for the Property should contain all health and safety information necessary for the proper maintenance, repair, alteration, decoration and demolition of the Property. The Buyer needs the information requested as it could affect the Buyer's ability to carry out works, the method of carrying them out and the value and marketability of the Property.
If the Health and Safety file will not be handed over at completion (for example, where it is retained by the occupational tenant of whole), the Buyer must ensure there are arrangements to allow it to access the original. Under CDM 1994, a Health and Safety file was required for each "structure" forming part of a project. CDM 2007 and CDM 2015 allow a single Health and Safety file to relate to more than one building. The file may be physical or electronic.
Enquiry 14.5
This enquiry requests confirmation that any Health and Safety file has been compiled and maintained in accordance with the relevant CDM regulations. This is because the Health and Safety file may have been compiled when the works were done and no new works have been carried out since, so the file contents are to be judged by the standards set out in the historic version of the CDM regulations. Most Health and Safety files are constantly updated as new construction works are carried out.
Enquiries 14.6 and 14.7
An Energy Performance Certificate (EPC) is a certificate containing information about the energy efficiency of a building. The EPC is produced by the seller or landlord or developer and must be accompanied by a recommendation report containing suggestions for the improvement of the energy performance of the building.
The obligation to produce EPCs is contained in the Energy Performance of Buildings (England and Wales) Regulations 2012 (SI 2012/3118) (EPB Regulations 2012).
EPCs are required when a building is constructed, sold or rented out. There are several types of building and transaction (for example, lease renewals or extensions, lease surrenders) which are exempt from the need to provide an EPC.
The seller or landlord is required to provide the prospective buyer or tenant with a valid EPC and a recommendation report, free of charge, at the "earliest opportunity" and by no later than whichever of the following actions first takes place:
- The seller or landlord provides written information about the building to a person who has requested that information.
- A prospective buyer or tenant views the building.
The seller or landlord must ensure that the ultimate buyer or tenant has received a valid EPC. A copy of a valid EPC is sufficient, and an electronic copy is permissible if the recipient consents to receiving the certificate electronically.
The obligation to provide an EPC does not apply if the seller or landlord has reasonable grounds to believe that a prospective buyer or tenant:
- Is unlikely to have sufficient funds to buy or rent the building.
- Is not genuinely interested in buying or renting that type of property.
- Is not someone to whom the seller or landlord would be prepared to sell or rent out the building.
In addition, before marketing a property, the seller or landlord must ensure that it either has an EPC or has commissioned an EPC for the property. The seller or landlord must use all reasonable endeavours to ensure that an EPC is obtained within seven days of marketing (although there is an additional 21 day period during which the EPC can be obtained, if it is not obtained during the initial seven day period).
A developer is required to produce an EPC when a new building is erected or where an existing building is converted into fewer or more units and the services (for example, the heating, hot water or air-conditioning systems) in the building are modified. Unless an EPC and recommendation report have been given to the owner of the building by the developer, the building control inspector cannot issue a completion certificate for the works.
Certain buildings are not subject to the Building Regulations 2010 but are still within the scope of the EPB Regulations 2012. In such cases, the person who carries out the construction work must give the owner of the building an EPC and recommendation report within five days of completing the construction work.
The general rule is that an EPC is valid for ten years from the date on which it was issued. It will be revoked if a new EPC is issued for the same building. Where there is a valid EPC of the whole building, a later EPC of part will not invalidate the existing EPC of whole and vice versa.
For example, on a sale of the whole building the original EPC remains valid, but on a letting of the part for which a new EPC has been produced, the new EPC is the relevant document.
EPCs and recommendations reports must be lodged by the energy assessor who produced them on the central EPC Register operated by Landmark Information Group on behalf of the government. Subject to certain exceptions, data which is legally required to be included in an EPC can be accessed, free of charge, via this register. This will include a property's energy efficiency rating and recommendations made by the energy assessor.
The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 (SI 2015/962) (MEES) applies to privately rented properties, including farm buildings, farm houses and farm cottages in England and Wales that are let on a relevant tenancy and are required to have an EPC. This is a complex area for more information on the application of MEES, see
In general terms, the buyer will want to establish whether, each building which uses energy to condition the indoor climate of the property has a valid EPC. Whether any of the properties are sub-standard for the purpose of the EPC (currently below a level E rating), if so, do they have registered exemption. If not, the buyer will not be able to let the sub-standard buildings out on tenancies without either doing works to get the buildings up to a standard EPC rating of E or above or obtain a registered exemption. If the buyer does not comply with MEES they will incur penalties, which can be severe and will apply to each building.
For more information, see Practice note, Energy performance certificates (EPCs) and Toolkit, MEES: minimum energy efficiency standards toolkit
Enquiry 14.8
The EPB Regulations 2012 require five-yearly air-conditioning inspections, which are intended to promote the improvement of the energy performance of buildings in England and Wales. This requirement was first introduced in the 2007 version of the EPB Regulations 2012.
Where a system was in service before 1 January 2008, then if the system has an output of over 250kW, the first inspection must take place by 4 January 2009, and if the system has an output of over 12kW by 4 January 2011. Where a system was first brought into service on or after 1 January 2008, the inspection must be carried out within five years of when it was first put into service. After the first inspection, systems must be inspected at five-yearly intervals.
From 6 April 2012, the energy assessor who carries out the inspection must lodge a report of the inspection on the central EPC Register which is operated by Landmark Information Group for the Government.
The Department for Communities and Local Government has published guidance on the duty to have air-conditioning systems inspected (see DCLG: A guide to air conditioning inspections for buildings (December 2012)). This guidance is aimed at anyone who manages or controls air-conditioning plant and includes information on:
- What an air-conditioning inspection covers.
- Obtaining an air-conditioning inspection.
- Applying the regulations in practice, including determining the size of an air-conditioning system.
Enquiry 14.9
The Buyer will need to be aware of the existence of protected species on the Property and the location of plants, nests, roosts, dens and so on. The presence of protected species could affect agricultural operations or future planning applications for development.
It is an offence to deliberately pick, collect, cut, uproot or destroy a wild plant of a European protected species listed under Schedule 5 to the Conservation of Habitats and Species Regulations 2010 (SI 2010/490) (Habitat Regulations 2010). Certain animals are also protected such as bats, dormice and natterjack toads. For a full list of European protected animals see Schedule 2 to the Habitat Regulations 2010.
The Wildlife and Countryside Act 1981 sets out various lists of species with differing levels of protection. For example, Schedule 5 lists protected animals (including water voles and red squirrels), and Schedule 8 lists protected plants.
For more information, see:
14.1Are you aware of any breach of, alleged breach of or any claim under any statutory requirements or byelaws affecting the Property, its current use, the storage of any substance in it or the use of any fixtures, machinery or chattels in it?
14.2Please give details of any notices that require works to be carried out to the Property under any statute, covenant, agreement or otherwise and state to what extent these notices have been complied with.
14.3Other than any already supplied, please provide details of any licences or consents required to authorise any activities currently carried out at the Property, including any required under local legislation.
14.4Are you aware, in relation to the Property, of any breach or alleged breach of the Construction (Design and Management) Regulations 1994, 2007 or 2015?
14.5Has a Health and Safety file been prepared for the Property? If so, please:
14.6In relation to any dwelling, or building which uses energy to condition the indoor climate on the Property, please::
(a)Confirm if you require an Energy Performance Certificate (EPC) or are covered by the exceptions to the Energy Performance of Buildings (England and Wales) Regulations 2012/3118 (MEES).
14.7If you have not supplied a valid EPC for the Property (including any farmhouses, farm cottages or farm buildings) which are subject to climate control, please:
14.8If the Property contains any air-conditioning, please:
14.9Are you aware of any protected species on the Property, such as species of animals, plants or birds protected under the Conservation of Habitats and Species Regulations (SI 2010/490) or the Wildlife and Countryside Act 1981? If so, please give details of the species and its location.
14.10Is the Property subject to any conservation designations, such as a Site of Special Scientific Interest (SSSI), Special Protection Area (SPA), Special Area of Conservation (SCA), nature reserve or Marine Conservation Zone, or any other conservation designations that could restrict the use of the Property for farming? If so, please provide details, including any payments made or to be made in relation to them, and copies of any management agreements and please indicate their location on a plan.
15.Environmental
Close Drafting Note
Environmental
The primary objectives of environmental legislation are:
- Protection of the environment from pollution.
- Remediation of existing contamination.
- Prevention of future contamination.
- Better management of natural resources and promotion of sustainable development.
Enquiry 15 is a general enquiry about environmental issues, aimed at sites with no known environmental problems. More specific questions can be raised if the Buyer's requirements, or the state of the Property, demand.
A fundamental principle of environmental legislation is that "the polluter pays". The definition of polluter is wide so that it can include parties who have not been directly responsible for the contamination, including a subsequent owner of the land. Legislative requirements for undertaking remedial action of a site are in Part 2A of the Environmental Protection Act 1990, but there are other regimes that might be relevant, including the Environmental Damage Regulations, Water Resources Act and the planning regime. There may also be civil liability under common law nuisance if contamination causes damage to neighbouring land. In many instances the preferred method of enforcing clean-up will be through conditions on a planning permission for a redevelopment.
These enquiries are intended to alert the Buyer to any matter which may need further investigation so the Buyer can be fully aware of what environmental liabilities it may inherit as a result of the Transaction.
The cost of remedying damage caused by contamination may be significantly more than the value of the Property (particularly if the groundwater is affected) and this can make it difficult to identify any arbitrary value below which it can be said that any form of environmental investigation is unnecessary.
The following are examples of the types of hazard with which these enquiries are concerned:
- Pollution and protection of the environment.
- Emissions and releases.
- Disposal of farm, industrial, commercial or household waste.
- Discharges of radioactive waste or chemical or other pollutants or contaminants or toxic or hazardous substances.
- Manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of any discharges or waste materials.
- Control of noise and noise emissions.
- Water pollution, including pollution by trade and sewage effluent.
- Water abstraction and discharges into controlled waters (see Drafting note, Enquiry 15.3).
For more information, see Practice note, Environmental law: overview.
As agricultural transactions will usually involve the sale of land rather than the sale of a business, liability under health and safety legislation is unlikely to be relevant. However, if the transaction involves the sale of an agricultural business, consider whether to raise any health and safety enquiries, in addition to environmental enquiries. For more information, see Standard document, Due diligence questionnaire: environmental issues in asset purchases: clause 2.
Enquiry 15.2
If replies to enquiry 10.7 revealed any generating equipment forming part of the Property services, that equipment may also be subject to a requirement for a permit that should be supplied in reply to this enquiry. Small generators (rated thermal input up to 50 MW) now require an environmental permit (see Practice note, Environmental Permitting: regulation of industrial installations in England and Wales: Additional controls on NOx emissions from small generators). Note that generators would normally be fixed equipment and not necessarily included in the sale.
An environmental permit will be needed for waste management activities like waste storage, unless the activity complies with one of the exemptions.
If oil is stored in an above ground tank specific (different) regulations regulate that storage in England and Wales, both aiming to prevent water pollution from oil spills. The extent to which the regulations from each country regulate oil storage on farms differs. For more information see Toolkit, Environmental requirements for agriculture toolkit: Storage of oil in above-ground storage tanks.
For information about sewage discharges see Clause 31.
Consideration should be given as to the need to transfer permits and other authorisations and licences from the seller to the buyer. In relation to small generator and waste management permits, for example, the seller and buyer would make a joint application to the Environment Agency or National Resources Wales.
Enquiry 15.3
If any authorisations are disclosed then the Buyer should consider asking for confirmation that:
- The authorisations have not been breached.
- No upgrade of plant or equipment and no capital expenditure is needed before authorisations can be complied with.
- No notice or other communication has been received from an enforcement authority which may materially affect the terms of such authorisations or their continued validity.
The Buyer must satisfy itself that any authorisations will be sufficient for the Buyer's proposed use of the Property.
In relation to water abstraction, as the ability to secure a water supply will be crucial for most farming operations, the Buyer will want to be sure all information about water abstraction licences has been supplied. Replies to enquiries 14.3 and 15.2 may have revealed the existence of any water abstraction licences but, if not, enquiry 15.3 explicitly requests this information (in addition to any other licences or authorisations not already supplied).
Water abstraction licences are issued by the Environment Agency (EA) in England and Natural Resources Wales (NRW) in Wales. It is a criminal offence to take water from any source of supply (surface water or groundwater) without a licence under section 24 of the Water Resources Act 1991 (WRA 1991). For more information on water abstraction, see Practice note, Water abstraction regime.
An abstraction licence will specify:
- Where the water can be taken from (the source).
- The quantities that can be taken.
- What the water can be used for.
- How the water can be abstracted (that is, specific works or machinery).
- For water abstraction licences issued since April 2004, when the licence starts and expires (prior to 1 April 2004 it was possible for a licence to be issued to remain in force until revoked, commonly known as a permanent licence, since 1 April 2004 only licences to obstruct or impede inland waters can be issued to remain in force until revoked).
Enquiry 15.3(d) seeks confirmation that the licence will be assigned to the Buyer. When land is sold with a water abstraction licence, and no changes are needed to the licence, the Buyer and Seller need only apply to the EA or NRW to transfer the licence. There is no need for the Buyer to apply for a new licence. The holder of a full abstraction licence can also apply to the EA or NRW for the apportionment of the licence between two or more parties (otherwise known as water rights trading) (section 59C, WRA 1991). In the case of a sale of part, the parties should ensure that each person who will benefit from an abstraction licence will have suitable rights of access to the abstraction land (for example inland waters or underground strata). See Practice note, Water abstraction regime: Right to access land where abstraction to take place. Where apportioning the water abstraction licence, the EA confirm that the parties are free to decide how to divide the licensed volume between themselves.
Enquiry 15.3(e) seeks to clarify whether the risk of variation or revocation without compensation is a possibility. Water abstraction licences can be varied or revoked by the EA or NRW (see Practice note, Water abstraction regime: Revocation and variation of licences). The right to claim compensation does not apply in all circumstances. One such circumstance is where no water has been abstracted under the licence for four years before a notice to revoke or vary is served by the EA or NRW (section 61(4) of the Water Resources Act 1991) (see Practice note, Water abstraction regime: Limited compensation for revocation or variation). The EA confirm that they interpret s.61(4) of the Water Resources Act 1991 as it is written, so if the licensee has abstracted water within the 4-year period (even if only on one occasion), they would remain eligible to claim compensation for loss suffered.
In England, the Environment Bill 2019-20 (at clause 78) proposes the addition of a further right for the EA to vary or revoke a water abstraction licence based on underuse of the volume permitted by the water abstraction licence over an assessment period of 12 years. The current drafting would mean that from 1 January 2028 the EA could retrospectively assess 12 years usage, meaning usage as far back as 1 January 2016 could be relevant. If in each year of the 12-year period, the quantity abstracted did not exceed 75% of the volume authorised by the abstraction licence then the licence may be varied to reduce the permitted volume without the obligation to pay compensation. This clause 78 is currently drafted to apply only to permanent licences (i.e. licences issued to remain in force until revoked). This provision, if enacted, would therefore mostly affect water abstraction licences issued before 1 April 2004 (when the requirement to issue water abstraction licences with expiry dates came into force). Where water abstraction is a concern for a Buyer in England, it may be prudent to enquire about usage from 1 January 2016.
A Seller should have usage data to provide because annual returns are part of the monitoring process. Whilst the type of monitoring conditions specified on individual licences may differ (for example some may require installation of a meter, some may allow usage to be calculated based on the average volume of water the activities on the Property would be expected to use, and some may detail no monitoring requirements), all licence holders confirm their abstraction records to the EA in annual returns.
Where the Seller may have received communication from the EA or NRW about variations to a water abstraction licence this may be disclosed in reply to enquiry 15.3(c). Nonetheless, where the reply to enquiry 15.3(e) highlights non-use or underuse of a water abstraction licence, it may be preferable to direct a specific additional enquiry to the Seller to clarify no communication has been received from or made to the EA or NRW relating to revocation or variation of a water abstraction licence for reasons of non-use or underuse.
Currently, the EA advise they do not operate any formal warning system to alert a Buyer to the status of individual licences. The EA operate an Abstraction Licensing Strategy (ALS) that records water availability in different parts of the country (see Practice note, Water abstraction regime: Abstraction Licensing Strategies). The ALS may indicate whether the Property is in an unsustainable area, so inferring the EA are more likely to be reviewing licence usage, but there is no formal process to check the likely risk of individual licences being reviewed.
Enquiry 15.4
This enquiry focuses on whether the Property has been subject to potentially contaminative uses or whether there is any hazardous material in the Property. It has been deliberately framed widely to avoid the Seller having to form a view on whether or not information given is indicative of a contaminative use.
Enquiry 15.6
The enquiry does not expressly ask for sight of waste transfer notes (which have to be provided to anyone disposing of waste and which might be numerous). The Buyer could request these if concerned about the proper disposal of waste.
An environmental permit is required for handling and disposing of farm and horticultural waste, in order to ensure that agricultural waste is managed and disposed of in ways that protect the environment and human health (see Practice note, Waste permitting).
Some waste management activities are exempt from the requirement to have an environmental permit, and there are specific exemptions for certain uses of agricultural waste.
Note that manure, slurry and effluent are not waste when directly used as fertiliser on the farm, but they will need to comply with the requirements of the Nitrates Directive (Directive 91/676/EEC concerning the protection of waters against pollution caused by nitrates from agricultural sources) (see Drafting note, Nitrate Vulnerable Zone (NVZ)).
For more information, see Defra: Non-hazardous farm waste: treatment and disposal and Gov.uk: Hazardous waste.
Enquiry 15.7
The reply to this enquiry should reveal matters such as migrating contamination both from and to the Property; dust, noise and other forms of nuisance; and breaches of waste disposal requirements.
Enquiries 15.14 and 15.15
If the parties agree that items such as silage or fuel oil are left on the Property, the parties should agree their value and the sale contract should specify how the Seller is to be compensated. Such matters are generally addressed in the tenant right clause of the sale contract.
Enquiry 15.16
If a farmer plans to increase the agricultural productivity of uncultivated or semi-natural land, or to restructure a rural land holding, they must first submit a screening application. If Natural England decides that the project is likely to have a significant impact on the environment, the farmer must apply for consent to undertake the work.
This reply to this enquiry might help to identify projects to plough up permanent grassland. Consent from Natural England is required before ploughing up or improving land that has not been cultivated for 15 years or which is semi-natural grassland (or another semi-natural area). Submission of a screening application is the first step. For more information, see Natural England: Environmental Impact Assessment (Agriculture) Regulations: apply to make changes to rural land.
15.1Please supply a copy of all environmental reports that have been prepared in relation to the Property or indicate where such reports may be inspected.
15.2What (if any) authorisations are required under environmental law for activities currently carried out or processes occurring at the Property, including storage of materials, water abstraction, discharges to sewers or controlled waters, emissions to air and the management of waste?
15.3Please:
(a)supply a copy of all environmental permits, licences and authorisations given in relation to the Property under environmental law (including without limitation water abstraction licences) and confirm that the terms of all such licences and authorisations have been complied with and will continue to be complied with until completion;
(b)supply details of any licences and authorisations for which application has been made but that have not yet been given (including without limitation water abstraction licences);
15.4Please give details (so far as the Seller is aware) of:
(b)the existence of any hazardous substances or contaminative or potentially contaminative material in, on or under the Property, including asbestos or asbestos-containing materials, any known deposits of waste, existing or past storage areas for hazardous or radioactive substances, existing or former storage tanks (whether below or above ground) and any parts of the Property that are or were landfill.
15.5Please provide full details of any notices, correspondence, legal proceedings, disputes or complaints under environmental law or otherwise relating to real or perceived environmental problems that affect the Property, or which have affected the Property within the last ten years, including any communications relating to the actual or possible presence of contamination at or near the Property.
15.6Please:
(a)provide full details of how any forms of waste or effluent from the Property (including surface water) are disposed of, including copies of any relevant consents, agreements and correspondence;
15.7Please give details of any actual, alleged or potential breaches of environmental law or licences or authorisations and any other environmental problems (including actual or suspected contamination) relating to:
15.8Please provide copies of any insurance policies that specifically provide cover in relation to contamination or other environmental problems affecting the Property. If such insurance cover has at any time been applied for and refused, please provide full details.
15.9Please give details of any actual or suspected migration of contamination or water (including groundwater) pollution to, or from, the Property.
15.10Please provide details of any material expenditure on environmental matters that is likely to be required in respect of the Property or its use, such as upgrade works necessary to comply with environmental laws or permits.
15.11Is there any farm dump on the Property? If so, please confirm that no waste has been added to the farm dump since 15 May 2006.
15.12If there are any storage facilities for silage, slurry and agricultural fuel oil on the Property, please give details of their age and condition, the results of any inspections, and the dates and extent of any leaks.
15.13Please provide a plan showing the location on the Property of any storage facilities for silage, slurry and agricultural fuel oil (including any associated pipes and channels), and the location of any dung heap.
15.14Please confirm that all storage facilities for silage and slurry on the Property will be emptied before completion.
15.15Please confirm that in the case of the following materials, the storage facilities comply with the requirements of the Water Resources (Control of Pollution) (Silage, Slurry and Agricultural Fuel Oil) (England) Regulations (SI 2010/639), the Water Resources (Control of Agricultural Pollution) (Wales) Regulations 2021 (SI 2021/77) and the Water Resources (Control of Pollution) (Oil Storage) (Wales) Regulations 2016 (SI 2016/359):
16.Occupiers and employees
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Occupiers and employees
Enquiry 16 is concerned with the rights, statutory or otherwise, of anyone who will, following completion of the Transaction, either remain in occupation of the Property or who will be employed to work at the Property.
Occupiers may have specific rights of occupation which need to be addressed as part of the Transaction and where there are leases and licences conferring these occupational rights, the Buyer may need to raise agricultural tenancy enquiries.
Occupiers may have rights which go beyond those set out in a formal lease or licence and these rights may be protected as overriding interests, information about which should have been included in reply to enquiry 4.
There may be people in occupation who are employed to work at the Property and they may have rights as employees under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (SI 2006/246) (TUPE) (see enquiries 16.4 and 16.5).
Enquiry 16.1
Where the Seller is a company, firm or partnership or some other corporate body, the Seller is not required to give the names of all shareholders, partners or employees but should give details of any other body in occupation including a company in the same group.
The Seller should explain whether occupation is by virtue of lease or licence or whether there is no formal right to occupy, in which case the Seller should give details of the length of occupation, any payments received in respect of it and any objections made to it.
Enquiry 16.3
Whether the Property is vacant, and the period during which it has been vacant, may be relevant for a number of reasons. For example, it could affect the validity of insurance cover and liability to pay business rates, and may put the Buyer on notice that squatters could be in occupation.
Enquiries 16.4 and 16.5
The purpose of TUPE is to protect the jobs and terms and conditions of employment of employees where the undertaking by, or in respect of which, they are employed is transferred. TUPE applies to any transaction considered to be the transfer of an economic entity and can include the transfer of premises as part of a business sale and transfers of investment properties such as shopping centres or office buildings.
TUPE also applies where a client engages a contractor to do work on the client's behalf, and the client then reassigns the contract or brings the work in-house (a service provision change).
For TUPE to apply to service provision changes, there must have been an organised grouping of employees before the change whose principal purpose was to carry on services for the client. It is expressly stated that the grouping of employees may be only one employee.
TUPE applies to staff employed in respect of the business or property which is being sold or the service which is to be provided by a new supplier. It extends to managers, managing agents, caretakers, cleaners, maintenance staff and security guards employed in respect of buildings which may otherwise be empty.
All employees employed in the undertaking or service automatically transfer to the Buyer on their existing terms and conditions (save for pension schemes) and their employment is treated as being continuous for purposes of all statutory claims including redundancy and unfair dismissal. Any dismissals connected with the transfer are considered to be automatically unfair.
Under TUPE, the Buyer takes on all rights, liabilities and responsibilities for anything done by the Seller in respect of the transferring employees and may therefore inherit liability for unfair dismissals, claims in relation to any form of discrimination and any failure to pay wages or bonuses which arise before the time of the transfer.
TUPE imposes obligations on both the Seller and the Buyer to inform and consult with appropriate representatives of any affected employees.
TUPE also requires the Seller to provide the Buyer with certain information (Employee Liability Information) about the transferring employees, including their identity (see regulation 11 of TUPE). If the Seller provides any further information about the transferring employees it should omit names and other identifying details such as job titles. This is to ensure compliance with the Employment Practices Code issued by the Information Commissioner to take account of the obligations under the Data Protection Act 1998 (see Information Commissioner: Employment Practices Code).
Enquiry 16.6: ages of those in occupation
Occupiers might need to be joined as party to the contract if they will be over 18 on exchange. For information on the rights of occupiers, see Practice note, Investigating the property: the physical inspection: Third party rights.
16.1Please give the names of anyone in actual occupation of the Property or receiving income from it. Except where apparent from the title deeds, please explain what rights or interests they have in the Property.
16.2Except where apparent from the title deeds or revealed in reply to enquiry 16.1, please state whether any person, apart from you, has or claims to have any right (actual or contingent) to use or occupy the Property or any right to possession of the Property or to any interest in it.
16.4Is there anyone to whom the Transfer of Undertakings (Protection of Employment) Regulations 2006 will or might apply, who is:
17.Insurance
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Insurance
Enquiry 17 concerns buildings insurance as opposed to contents insurance or title insurance.
These enquiries are drafted on the assumption that the Buyer will not be taking over the Seller's insurance policy. The convention is that once contracts are exchanged, the Buyer takes over the risk in the Property and must therefore insure from that date.
If instead the Seller's insurance will remain in place between exchange of contracts and completion, or the existing insurance arrangements will remain in place following completion, the Buyer should raise additional enquiries, such as CPSE.1 enquiries 17.4 to 17.6. If the Buyer is to rely on the Seller's insurance between exchange and completion, the contract may need to cover noting the Buyer's interest on the policy.
18.Rates and other outgoings
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Rates and other outgoings
The Buyer will need to know its liability for periodic payments following completion of the Transaction. The main liabilities are likely to be business rates, water and sewerage charges, and council tax but there may be others.
These enquiries are drafted on the assumption that the Property is not in an area subject to a Business Improvement District (BID) arrangement, and there is no proposal to create a BID that will include the Property, so they do not include equivalents to CPSE.1 enquiries 18.9 to 18.11. For more information on BIDs, see Practice note, Business Improvement Districts (BIDs).
Business rates and agricultural land and buildings
Agricultural land and agricultural buildings are exempt from business rates, but the agricultural definitions are detailed and narrow (Schedule 5, Local Government Finance Act 1988). Business rates could apply where agricultural or rural buildings are not used for crops or livestock, such as any of the following:
- Stables for horses, whether or not used commercially.
- Equestrian or riding centres.
- Farm shops that do not meet the agricultural buildings criteria.
- Any agricultural buildings put to unconventional uses, such as for zoo animals.
- Buildings used for non-agricultural purposes such as venues for weddings or conferences.
- Land or buildings used for renewable energy such as solar panels.
- Holiday lettings or caravans.
Enquiry 18.1
The rateable value of the Property is the open market rental value attributed to it for the purpose of calculating business rates payable on it. This information will be on the rating assessment of the Property and on the rate demands received from the local authority but can also be obtained from the local authority.
Enquiry 18.2
Whether or not the Property is separately assessed for business rates is important because if it is assessed as part of other premises that are not included in the Transaction, it may have to be reassessed following completion of the Transaction.
Enquiry 18.3
Rateable values on local rating lists are revised every five years.
Valuation officers may serve notice on an occupier or owner of a property requiring information about that property. Any correspondence passing between the Seller or occupiers of the Property and the valuation officer regarding a revaluation should be disclosed in response to this enquiry, including copies of all relevant proposals, notices, returns and appeals.
Enquiry 18.4
The rateable value of a property may be revised at any time due to a material change in circumstances. An owner or occupier of a property can at any time apply to the valuation officer requesting an alteration to the rateable value shown in the rating list or an alteration to any other statement made in the rating list about the property.
The valuation officer may also propose an alteration if there have been any alterations or improvement works, works to extend or enlarge the property or a change of use of the property. Copies of all relevant correspondence and documentation should be produced including all proposals, notices, returns and appeals.
Enquiry 18.5
The amount payable for business rates, council tax, water rates, sewerage and drainage charges can be obtained from the local authority and the water company.
If the Property forms part of other premises for which there is only one assessment for business rates and for water, sewerage and drainage rates, that fact should be disclosed in this reply.
Local authorities and water companies have a financial year that runs from 1 April each year. Accordingly, reference to the current year in this enquiry will mean the financial year that started on the most recent 1 April.
Enquiry 18.6
If a property is vacant, the owner or occupier may be entitled to 100% empty rate relief for a period of three months (or six months if industrial or warehouse property) following the date on which the property becomes vacant. Subject to various exceptions, full rates again become payable at the end of that period.
If the property has been left vacant for any period and empty rate relief has been claimed, full details should be provided.
If the property is currently vacant, the date on which the property was vacated should also be provided.
Exemptions from business rates include agricultural land and parks. There are several others.
Enquiry 18.7
Transitional charging arrangements are concerned with phasing in new rates bills when they are significantly above or below the previous year's bills.
Enquiry 18.8
The types of periodic charges envisaged by this enquiry include payments in respect of private water supplies, private access routes to the Property and rentcharges (annual or other periodic sums charged on or issuing out of land). The reply is not expected to include details of rent and service charges payable under a lease of the Property.
For more information on rentcharges, see Practice note, Rentcharges: overview.
Enquiry 18.9
Council tax bands are based on property valuations at 1 April 1991. Council tax bands for Wales were revalued from 1 April 2005, based on property values as of 1 April 2003.
When a property is improved or extended, the Valuation Office Agency (VOA) only increases the existing band of that property when there is a relevant transaction. The term "relevant transaction" simply means that the property has been sold as a freehold, or a lease for a period of seven years or more has been granted or transferred to another party.
The VOA receives information on improvements from the local authority, usually from the planning and building control process. They also receive information of the sale from HMRC. If the VOA has a record of any improvements to the property it will review the council tax band and, if necessary, alter the entry in the valuation list. The subsequent increase in council tax will be effective from the date the council tax valuation list is altered.
18.2Please confirm that the Property is not assessed for business rates together with other premises or, if it is, please give details.
18.4Please give details of:
18.6Have you made any claim for void period allowance or for exemption from liability for business rates? If so, please give details.
19.Notices
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Notices
The Buyer needs details of every notice affecting the Property so that it:
- Knows what may affect the Property.
- Can take steps in the contract to ensure that the Seller deals with all notices as appropriate.
- Is prepared to take appropriate action following completion of the Transaction.
- May negotiate an indemnity.
Examples of notices which could affect the Property include planning notices, compulsory purchase notices, public utilities' notices, repair notices, landlords' notices of intention to sell the freehold, tenants' notices of intention to buy the freehold or to enfranchise, notices about a change of landlord, or tenant, mortgages and rent review.
Notices about disputes should be included in the reply to enquiry 20.
If the Buyer raises supplemental enquiries, it may be more appropriate to give details of landlords' and tenants' notices in response to those supplemental enquiries. Alternatively the information can be given here and a cross-reference made in the replies to the supplemental enquiries.
19.1Except where details have already been given elsewhere in replies to these enquiries, please supply copies of all notices and any subsequent correspondence that affect the Property or any neighbouring property and have been given or received by you or (to your knowledge) by any previous owner, tenant or occupier of the Property.
20.Disputes
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Disputes
The Buyer needs details of every dispute relating to the Property so that it may:
- Appreciate what liabilities it may be incurring.
- Be aware of potential obstacles to the use and enjoyment of the Property.
- Take steps in the contract to ensure that the Seller deals with all disputes as may be appropriate.
- Be prepared to take appropriate action following completion of the Transaction.
- Negotiate an indemnity.
Disputes include those that have arisen in the past, whether or not they have been resolved. The existence of a dispute in the past may indicate a potential problem for the future and also may explain facts and circumstances about the Property. The Seller should include information on anticipated disputes, even where there is nothing formally on record.
20.1Except where details have already been given elsewhere in replies to these enquiries, please give details of any disputes, claims, actions, demands or complaints (including without limitation any that relate to Boundary Features) that are currently outstanding, likely or have arisen in the past and that:
(a)relate to the Property or to any rights enjoyed with the Property or to which the Property is subject;
20.2Are you aware of any noise, odour, dust or spray drift arising from neighbouring land but noticeable on or in the Property?
20.3Have you complained about such noise, odour, dust or spray drift? If so, please give details of the complaint and its outcome.
20.4Have any of your predecessors in title complained about such noise, odour, dust or spray drift? If so, please give details of the complaint and its outcome.
21.Deferred payment of SDLT or LTT
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Deferred payment of SDLT or LTT
Where the whole or part of the consideration for a land transaction is contingent, uncertain or unascertained, the taxpayer is under an obligation to pay SDLT or LTT on completion of the transaction on its reasonable estimate of the amount of contingent, uncertain or unascertained consideration that will be payable. Where the payment of additional consideration is contingent, the taxpayer must assume that the additional consideration will become payable (regardless of the likely outcome of the contingent event).
If the contingent, uncertain or unascertained consideration will not be payable within the first six months of completion of the transaction, the taxpayer can make an application to HMRC to defer the payment of SDLT, or to the Welsh Revenue Authority (WRA) to defer the payment of LTT, on the contingent or uncertain amount. The application for deferral must be made before the taxpayer makes its land transaction return in accordance with the Stamp Duty Land Tax (Administration) Regulations 2003 (SI 2003/2837) or Chapter 3 of Part 6 of the Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017.
If an application for deferral is successful, the taxpayer remains liable for any additional SDLT or LTT payable but the taxpayer may want an indemnity from any Buyer where that Buyer, and not the taxpayer, becomes liable for the payment of the additional consideration to the original Seller. The Buyer will therefore need to know the additional amount of SDLT or LTT that may be payable.
If you have made any application to defer the payment of SDLT or LTT on any contingent, uncertain or unascertained consideration and you are seeking an indemnity from the buyer in respect of the deferred payment:
(a)please provide a copy of the original land transaction return made to HMRC or the WRA and a copy of the certificate issued by HMRC or the WRA certifying that the transaction was notified to them;
22.Value Added Tax (VAT) Registration information
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Value Added Tax (VAT) Registration information
Most property transactions carried out in the course of a business are within the VAT regime, but this does not necessarily mean that VAT must be added to the price. The most common VAT classifications are standard-rated supplies, exempt supplies and transfers as a going concern. Transactions involving certain types of property may occasionally be zero-rated supplies.
These enquiries will not elicit all necessary information about the VAT position but the replies should trigger a series of additional enquiries as appropriate, which can then be referred to VAT experts. To avoid delay, these notes suggest relevant additional enquiries and the Seller is encouraged to volunteer the replies before waiting to be asked.
It is essential to establish if the Seller is registered for VAT to ensure that any charge to VAT is valid. The information is also important in deciding whether an option to tax should be made. If the Seller is registered as part of a VAT group, the name of the group representative member is needed, as the Transaction will be deemed for the purposes of VAT to be made by that company.
23.Transfer of a business as a going concern (TOGC)
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Transfer of a business as a going concern (TOGC)
No VAT is payable where a transaction qualifies as a transfer of a business as a going concern (TOGC). The following transactions may qualify as a TOGC:
- The sale of an investment property subject to one or more leases.
- The grant of a long lease of an investment property, subject to one or more leases, so long as the reversionary interest is "small enough not to disturb the substance of the transaction".
- A business asset sale, which includes property assets used in the trade.
Qualification for treatment as a TOGC requires all the following:
- The asset or assets are intended to be used by the Buyer in carrying on the same kind of business (but not necessarily identical) as that carried on by the Seller.
- Where the Seller is a taxable person (that is registered or liable to be registered for VAT), the Buyer must already be a taxable person or immediately become, as a result of the transfer, a taxable person.
- In relation to a part transfer, that part is capable of separate operation.
- The effect of the transfer must be to put the Buyer in possession of a business which can be operated as a business.
- The business, or part, transferred must be a "going concern" at the time of transfer, which in essence means that it is a business, whether profit-making or not.
- There should not be a series of immediately consecutive transfers of the business.
- There should be no significant break in the normal trading pattern before or immediately after the transfer.
- Where the Seller has opted to tax, or the supply is the freehold sale of new buildings or civil engineering works which are less than three years old, the Buyer must opt to tax the land and buildings concerned and notify HMRC of that option before the first occasion on which a supply of the Property is made. This may mean that the Buyer must opt to tax the Property before exchange, if, for example, it is to pay a deposit on exchange of contracts to the Seller's representative as agent for the Seller (as often happens in auction sales) rather than to a stakeholder.
The position on VAT records will depend on whether the Buyer takes over the Seller's VAT registration number. To take over the Seller's VAT registration number, the Seller and the Buyer have to make a joint application to HMRC. Provided that certain conditions are fulfilled, HMRC may (but is not obliged to) agree to transfer the Seller's VAT registration number to the Buyer. It is rare, in practice, for a Buyer of a business to take over the Seller's VAT registration.
If the Buyer does not take over the Seller's VAT registration, the general VAT law will apply: the Seller will be obliged to retain the VAT records of the business for six years (paragraph 6, Schedule 11, Value Added Tax Act 1994 and regulation 31, Value Added Tax Regulations 1995).
Section 49 of the Value Added Tax Act 1994 should ensure that the Buyer can gain access to the VAT records of the business. Where there is a TOGC and the Seller is required to keep the records, the Buyer can require the Seller to do the following, so far as is necessary to enable the Buyer to comply with its own VAT obligations:
- Give the Buyer whatever information is contained in the VAT records as the Buyer may reasonably specify, within the time and in the form that the Buyer may reasonably require.
- Give the Buyer whatever copies of the documents comprising the VAT records as the Buyer may reasonably require, within the time and in the form that the Buyer may reasonably require.
- Make the VAT records available for the Buyer's inspection at whatever time and place the Buyer may reasonably require, and allow the Buyer to make copies of or extracts from those documents.
The parties cannot contract out of or restrict the Buyer's rights.
If the Buyer takes over the Seller's VAT registration, regulation 6 of the Value Added Tax Regulations 1995 (as amended by the Value Added Tax (Amendment) (No 5) Regulations 2007) provides that the Seller must transfer the VAT records to the Buyer unless the Seller obtains a direction from HMRC requiring the Seller to retain the records.
Where the VAT records pass to the Buyer, the Seller will want to obtain an undertaking from the Buyer to provide access to the records. Where the Seller obtains a direction from HMRC to keep the records, the Seller will be under the same statutory obligation to provide access to the records as applies to a Seller on a TOGC where the Buyer does not take over the VAT registration.
Enquiry 23.2
Sufficient detail should be provided to enable the Buyer to satisfy itself on the treatment of the Transaction as a TOGC. For example, this will include details of any of the following:
- Options to tax.
- The precise use of the Property by the Seller.
- On a freehold sale, the period that has elapsed since practical completion or occupation.
Enquiry 23.3
The availability of treatment as a TOGC can be affected by the Seller's circumstances or actions. For example, TOGC treatment may not be available if any of the following apply:
- The Property is entirely let to a company within the same VAT group as the Seller.
- The Seller transfers the Property to another of its group companies which is not within the same VAT group registration and this transfer takes place immediately before the Transaction itself.
- The Seller opts to tax before the Transaction takes place and the Buyer does not opt to tax.
Enquiry 23.5
If the Transaction is a TOGC, it is important to determine if the Property, or any of the buildings or equipment on the Property, is a capital item for VAT purposes and is within its adjustment period. The Capital Goods Scheme adjustments are designed to ensure that the VAT reclaimed on the original cost of development or acquisition is adjusted over a five or ten year period (dependent upon the length of the interest held or acquired). This is done through clawbacks and it will be important for the Buyer to be aware of any clawback liability.
23.1Do you expect the Transaction to be treated as a TOGC and so to be outside the scope of VAT?
If you answered no, please go to enquiry 24 below; otherwise please answer enquiries 23.2–23.5 below.
23.3Are there any factors (other than those solely within our control) that may affect the availability of this treatment?
23.4Is the Transaction partly within and partly outside the scope of VAT (being a TOGC)? If so, how do you propose to apportion the price between the two elements?
23.5Is the Property, or any of the buildings or equipment on the Property, a Capital Goods Scheme item? If so, and if the period of adjustment has not yet expired, please supply the following:
(a)the start date of the adjustment period and of any intervals that have started or will start before completion of the Transaction;
(c)the total input tax attributable to the Property, buildings or equipment (whether or not recoverable) that is subject to adjustment in accordance with the Capital Goods Scheme and the amount of that input tax that has been recovered by you, or by anyone previously responsible for making adjustments during the current period of adjustment; and
24.Other VAT treatment
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Other VAT treatment
If the Transaction is not a TOGC, it is important to identify its correct VAT treatment, as certain actions may be required to validate that treatment.
This enquiry is intended to help the Buyer to verify the Seller's view of the correct VAT treatment of the Transaction. Consider the basis on which the Property is being sold, and whether a single approach to VAT treatment is appropriate to all elements of a package of assets. To give a few non-exhaustive examples, the VAT treatment might be:
- Standard rated if the Property has been opted to tax and the Transaction is not a TOGC.
- Exempt for general farmland that has not been opted.
- Zero-rated for a listed building.
The legislation is extremely complex and specific expert advice should always be sought.
25.Standard-rated supplies
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Standard-rated supplies
This enquiry is intended to help the Buyer to verify the Seller's view of the correct VAT treatment of the Transaction. The legislation is extremely complex and specific expert advice should always be sought.
It is important that, when answering this enquiry, the Seller takes into account any real estate election that it may have made.
It has been possible for a business to make a real estate election since 1 June 2008. The effect of a real estate election is that all properties acquired by the business (or any members of its VAT group) after it has made the election are automatically subject to the option to tax. A business cannot revoke a real estate election although it can elect to revoke the election in relation to individual properties in certain circumstances. HMRC has the power to revoke a real estate election if the business fails to comply with certain notification requirements.
25.2If the Transaction (or any part of it) is compulsorily standard-rated (as the freehold sale of a new or uncompleted building or civil engineering work), please state:
25.3Have you (or a relevant associate within the meaning of paragraph 3 of Schedule 10 to the Value Added Tax Act 1994) exercised a valid option to tax (within the meaning of Schedule 10 to the Value Added Tax Act 1994) that applies to the Property? If so, please:
(a)supply a copy of the option to tax and the notice of the option given to HMRC and any notices and correspondence received from HMRC in relation to the option;
28.Transactions outside the scope of VAT (other than TOGCs)
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Transactions outside the scope of VAT (other than TOGCs)
Certain property transactions (other than TOGCs) may be outside the scope of VAT. This would apply if, for example, the Transaction is not made in the furtherance of a business. It is important to establish the reasoning to avoid any disputes if it is subsequently discovered that a VAT charge was appropriate. By way of example, the sale of a church by a religious movement which has no business activities is likely to be a transaction which is non-business and outside the scope of VAT.
29.Capital allowances
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Capital allowances
For further background to these questions and the issues which may arise from the replies, see Practice notes, Replying to CPSE.1 Enquiry 32 on capital allowances, Capital allowances: overview and Capital allowances: fixtures in buildings and on land. In particular:
- Supplementary enquiry 29.8 is only to be answered where expenditure on plant and machinery fixtures has been pooled by the Seller (see enquiry 29.2) or a previous owner (see enquiry 29.4).
- The Buyer should consider whether it is in its interests to enter into a section 198 election and, if so, at what figure, because there are serious consequences if the wrong decision is made (see enquiries 29.8(e) and (f)).
The definition of "capital allowances" in enquiry 29 includes the first-year allowances (referred to as full-expensing) introduced by the Finance (No 2) Act 2023, and the 130% super-deduction and 50% SR allowances introduced by the Finance Act 2021. On the sale of a property, the Buyer cannot claim these allowances on any plant and machinery in the property because only qualifying expenditure on new and unused plant and machinery qualifies. However, the Buyer can still claim normal plant and machinery allowances on the eligible portion of the purchase price apportioned to the plant and machinery. The Buyer will need to know the amount of expenditure that the Seller incurred. If the Seller claimed these first-year allowances, this is enough to satisfy the pooling requirement for that expenditure. A section 198 election may be made for expenditure on which these first-year allowances have been claimed. If such an election is made for pooled expenditure, it should also cover plant and machinery for which the Seller has claimed these first-year allowances.
Similar considerations apply to enhanced capital allowances on plant and machinery if the Property is located in a special tax site. The Buyer cannot claim these enhanced allowances on the purchase of a building with existing plant and machinery but still needs to know the Seller's figures (and enter into a section 198 election if appropriate) in order to claim the normal plant and machinery allowances.
Enquiry 29.9
"Structures and buildings allowances" (SBAs) are restricted to construction expenditure, incurred pursuant to a contract entered into on or after 29 October 2018, for structures and buildings used for prescribed business purposes only. From April 2020, the allowances give relief at 3% per annum on a straight-line basis for 33 and a third years. Plant and machinery costs and land acquisition costs are not eligible.
Note that "Please rely on inspection" is not a suitable response to enquiry 29.9. If SBAs are relevant, it may be appropriate for the respective advisers to communicate direct as envisaged by enquiry 29.10.
NOTE: In this enquiry 29:
"CAA" means the Capital Allowances Act 2001;
"plant and machinery fixtures" means plant and machinery fixtures at the Property;
"capital allowances" has the same meaning as in the CAA, and includes (without limitation):
(a) first-year allowances provided for by section 7 of the Finance (No 2) Act 2023;
(b) super-deductions and SR allowances as defined by section 9 of the Finance Act 2021;
(c) (where the Property is located or part-located in a special tax site) allowances for qualifying expenditure on plant and machinery for use in a special tax site as set out in section 45O of the CAA; and
(d) any similar or analogous allowances for qualifying capital expenditure on plant and machinery under any legislation supplementing or replacing the CAA from time to time.
29.1Do you hold the Property on capital account as an investor/owner-occupier, or on revenue account as a developer/property trader as part of your trading stock? Please specify which.
29.2Have you claimed capital allowances on plant or machinery fixtures or allocated any expenditure on such fixtures to a capital allowances pool? If so, please answer the supplementary questions in enquiry 29.8 in respect of that expenditure.
29.4If you bought the Property and cannot pool any expenditure on plant and machinery fixtures:
29.5Please provide details of any plant and machinery fixtures which were paid for by a tenant, including any contributions made by you towards their cost.
29.6Please provide details of any plant and machinery fixtures which are leased to you by an equipment lessor.
29.7Please provide details of any expenditure on plant and machinery that you have treated as long-life assets, or any expenditure upon which you have claimed another type of capital allowances (for example, industrial buildings allowances, research and development allowances, business premises renovation allowances and so on).
Supplementary enquiries
29.8For each plant and machinery fixture for which a claim has been made or expenditure has been pooled, please:
(c)state whether that fixture was installed by you, or already installed by a previous owner (please specify which);
(e)
(where enquiry 29.2 applies) confirm that you will enter into a Capital Allowances Act 2001 section 198 election in that amount (or other appropriate amount, to be agreed) if asked to do so by the Buyer.
OR
29.9In relation to capital allowances on structures and buildings (SBAs):
(b)if the answer to (a) is yes, then please state: the total qualifying expenditure for SBAs; the dates when such expenditure was incurred and by whom; the amounts of SBAs that have been claimed to date, by whom and when; the current residue of qualifying expenditure; together with all supporting evidence as required by the relevant legislation; and please provide an "allowance statement" as mentioned in section 270IA of the CAA.
30.Drainage and watercourses
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Drainage and watercourses
On a sale of agricultural or rural land, it is important to establish the ownership and location of watercourses and ditches, and responsibility for their maintenance.
Adequate water supplies and drainage are important for many livestock and arable farming operations. Good drainage helps to ensure that crops are not flooded and grazing land is kept in good condition.
Some management option payments under agri-environment schemes require the claimant to be responsible for management of both sides of the ditch. Ditches that are managed by third parties, such as internal drainage boards, are not eligible for such payments.
30.2In respect of all watercourses (such as streams or rivers) that form the physical boundaries of the Property:
30.3Please indicate on a plan the extent of the watercourses, drainage channels and ditches on the Property.
30.4In respect of any watercourses or ditches that form the physical boundaries of the Property, please supply a plan showing details of the boundary with the Property: whether this is on the near side or the far side, or in the middle of the watercourse or ditch.
31.Septic tanks and sewage treatment plants
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Septic tanks and sewage treatment plants
Discharges (including sewage) to groundwater and surface waters, such as rivers, are regulated by the Environmental Permitting regime under the Environmental Permitting (England and Wales) Regulations 2016 (SI 2016/1154) (EP Regulations 2016).
Enquiry 31.1
Where the system is shared with others, additional enquiries may need to be raised about relevant rights between the parties and sharing of maintenance, repair, upgrade and other costs (assuming this is not apparent from the title papers deduced during investigation of title).
Enquiry 31.2
Where any parts of the sewage discharge system are located outside the boundary of the Property, necessary rights to access for inspection, maintenance, repair, upgrade and other activities will need to be checked. Where necessary rights are not apparent from the title papers, additional enquiries may need to be raised.
Enquiry 31.3
Most discharges require an environmental permit (EP). If an EP has not been supplied in reply to enquiries 15.3 or 15.6, this enquiry should ensure any EP benefitting a septic tank or sewage treatment plant is supplied.
A small sewage discharge of domestic sewage (from a domestic septic tank or small domestic package sewage treatment plant) is exempt if it meets certain conditions. The conditions include:
- The way the system discharges the treated effluent. For example, a septic tank that discharges to surface waters cannot be exempt and requires an EP.In England, where a septic tank discharges to surface waters without an EP, the Environment Agency (EA) indicates that the septic tank should be replaced or upgraded as soon as possible (see EA: General binding rules: small sewage discharge to a surface water: Rules for existing and new treatment systems). Where property in England is being sold before the replacement or upgrade of such a septic tank has been completed, responsibility for the works and related costs should be addressed between the buyer and seller as a condition of sale. It would be prudent for the parties to also establish a dialogue with the EA to ensure the intended works will satisfy their requirements for exemption or grant of an EP. For more information, see Practice note, Regulation of small sewage discharges from domestic septic tanks: Is the discharge from a septic tank?
- The volume of discharge must not exceed certain limits. The EA provides a calculator to help estimate daily discharge volumes (see EA: Sewage discharges: calculator for domestic properties).
- The date of installation determines whether the discharge is "new" or "existing" and the legislative treatment of the two differs in places (in relation to the ability to claim exemption). For example, sewage discharges in or near a sensitive area (including Special Areas of Conservation, Sites of Special Scientific Interest, Ramsar sites and ancient woodland) may not require an EP if the Property is in England and the discharge is an "existing discharge" but may require an EP in the same location where the discharge is a "new discharge".Substantive changes to a tank or treatment plant may cause the system to be treated as if it was installed from the date of those changes and not the original date of installation. The changes may also affect the validity of an earlier EP (where exemption is not being claimed and the original installation was granted an EP).A "new discharge" is defined by reference to different installation dates in England (1 January 2015) and Wales (6 April 2010).
In Wales an exemption must be registered with Natural Resources Wales and maintenance records must be kept for five years. The registration transfers automatically to subsequent occupiers. The requirement to register exemptions has not applied in England since 1 January 2015. The EA continue to recommend that maintenance records are retained as a matter of good practice, but it is not a legal requirement for property in England.
For information about all exemption conditions, see Practice note, Regulation of small sewage discharges from domestic septic tanks: Exemptions from obtaining an environmental permit.
For information about considerations on sale or lease of land benefiting from a septic tank or sewage treatment plant, see Practice note, Regulation of small sewage discharges from domestic septic tanks: Conveyancing issues for residential properties with a septic tank. Certain information, set out in the EP Regulations 2016, must be provided to the Buyer (in England and Wales) or occupier (in Wales only). If a Seller (or outgoing occupier in Wales) is not forthcoming in answering these enquiries then reference should be made to the legislation to highlight minimum information that must be supplied (see Practice note, Regulation of small sewage discharges from domestic septic tanks: Information to be provided on sale).
31.1If the Property is not connected to the public sewer, please provide details about arrangements for drainage and the discharge or emptying of effluent, including whether such arrangements are shared with other properties.
31.2Please provide a plan that delineates the boundaries of the Property and shows the location of any cess pools, septic tanks, sewage treatment plants, overflows, soakaways and outfalls and the routes of any linking pipes and related discharge points (including any parts that fall outside the boundary of the Property).
31.3Are there any septic tanks or sewage treatment plants, as defined by the Environmental Permitting (England and Wales) Regulations 2016 (SI 2016/1154), on the Property that require either authorisation by an environmental permit or registration as an exempt facility? If so, please provide details. In particular, please:
(b)where the Property is in Wales and the tank or plant is treated as an exempt facility, supply evidence of the registration of the exemption with Natural Resources Wales;
(c)confirm when the tank or plant was installed and whether any changes have been made since it was installed;
32.Nitrate Vulnerable Zone (NVZ)
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Nitrate Vulnerable Zone (NVZ)
If the Property is located within a Nitrate Vulnerable Zone (NVZ), additional considerations will apply to the management of the Property, applications of fertiliser and the storage of farm waste. NVZs are areas that drain into waters polluted, or potentially polluted, by nitrates. Member states are required to designate NVZs under the Nitrates Directive (91/676/EEC).
The Environment Agency has produced maps showing the areas of England and Wales that are designated as NVZs. For a link to the map and guidance on NVZs for farmers, see Defra: Nitrate Vulnerable Zones (for England) and Welsh Government: Nitrates Directive (for Wales).
The key legislation implementing the Nitrates Directive is:
(Nitrate Regulations.)
The Nitrate Regulations generally require an occupier to produce a risk map showing areas on the Property where there is a risk of nitrogen getting into surface water. They also require records to be kept for five years.
For more information on the control of nitrates, see Practice note, Nitrate Vulnerable Zones (NVZs): Nitrates Regulations obligations on farmers.
Is any part of the Property designated as a Nitrate Vulnerable Zone (NVZ)? If so:
(a)please provide copies of all relevant documents including a copy of any water map showing location of surface water, springs, wells and boreholes prepared for the purposes of SMR 1 or compliance with the Nitrates Regulations;
(b)please confirm that all records required by the Nitrates Regulations have been kept for the previous five years, including a risk plan, and that these will be handed over on completion;
33.Sugar beet contract
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Sugar beet contract
A current grower of sugar beet will have a contract with British Sugar to grow a specified tonnage of quota for an agreed price per tonne. To transfer the contract to another party on the sale of land, the current grower has to complete a transfer form which is signed by the both the current grower and the new grower.
34.Basic Payment Scheme (BPS)-Wales only
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Basic Payment scheme (Wales)/Delinked payments (England)
The Basic Payment Scheme (BPS) was a direct payment scheme established by Common Agricultural Policy.
In England, as from 1 January 2024 payments are delinked from land and BPS ends on the 31 December 2023. Delinked payments will not automatically be transferable, see Practice note, Delinked payments. The buyer may decide to delete this section of the enquiries if not relevant to the transaction. Cross compliance will not apply to delinked payments, so Enquiry 36 can be deleted if the property is in England.
In England, Environmental Land Management scheme replaces BPS, see Practice note, Environmental Land Management (ELM) and other rural support in England.
In Wales, entitlements can be transferred to an active farmer online via the Rural Payments Wales (RPW) from early in the relevant scheme year through to the BPS application submission deadline (usually 15 May). For more information, see Practice note, Basic Payment Scheme: BPS entitlements in Wales.
In Wales, Basic Payment Scheme will be replaced by the Sustainable Farming Scheme
General information on the BPS is also available from:
Enquiry 34.8: eligible hectares, land at your disposal and permanent grassland (Wales)
Currently a farmer needs eligible hectares to make a valid BPS claim. The farmer must declare an eligible hectare for each payment entitlement held.
The eligible hectares must be at the applicant's disposal on the application deadline (15 May in each scheme year). This will generally exclude tenanted land and include land let under licences, depending on the facts and who has responsibilities for management or control of the land. For more information, see Practice note, Basic Payment Scheme: Eligible hectares and Land at disposal rules.
Enquiry 34.15: breach of cross compliance (Wales)
The Buyer will want to identify breach of cross compliance to enable them to identify and deal with any continuing breaches that would prejudice their own direct payments claims. Compliance with cross compliance is also relevant for other payments under agri-environmental schemes.
In addition, where the claim year of the Buyer's first claim application overlaps with the Seller's period of ownership of the Property, the Buyer will be liable for any breach during that claim year, even if it was made by the Seller.
For more information on cross compliance, see Drafting note, Cross compliance-Wales.
Enquiry 34.13: entitlements usage (Wales)
Under the BPS, it is not possible to rotate entitlements by swapping the entitlements activated from year to year. A farmer must activate all of their entitlements in a single year at least once every two years. Deactivated entitlements expire; they cannot be used again by that farmer and are returned the national reserve.
Enquiry 34.16: identity of BPS claimant (Wales)
The identity of the person making the BPS claim in the expected calendar year of completion (Buyer or Seller) is relevant for liability under cross compliance.
If the Property is part of the Buyer's holding on the BPS application deadline, and the Seller does not submit a BPS application that calendar year for the rest of their agricultural land, the Buyer would be liable for cross compliance on the Property for the whole of the calendar year, including the period between 1 January and completion, when they did not occupy the Property.
In contrast, if the Seller submits a BPS application that calendar year for the rest of their agricultural land, the Seller would be liable for cross compliance on the Property from 1 January until completion. The Buyer would be liable for cross compliance on the Property from completion until the remainder of the calendar year.
34.2Are the entitlements included in the sale? If so, please specify the number and payment region for each entitlement included in the overall sale price agreed.
34.3Have any claims been made in relation to the Property within the last two years for any direct payments (such as the Basic Payment Scheme (BPS)), whether by you or any tenant, occupier or any other claimant? If so, please specify, for each of the previous two years:
34.4Where the Scheme year of your most recent BPS application claim will continue after completion, please confirm that you had the land at your disposal on 17 May and are a farmer.
34.6If you are registered for VAT, please confirm that you will provide on completion a VAT invoice in respect of the Entitlements.
34.7Please supply copies of the following documents and confirm the originals will be handed over on completion along with a VAT invoice (if applicable) in respect of the entitlements):
(b)a copy of the submitted application forms as at 17 May in the relevant scheme year and any subsequent amendments requested for payment for each of the previous five scheme years;
34.8On a plan please:
(a)specify which areas of the Property are at your disposal on 17 May and are eligible hectares for the purposes of the BPS;
(b)specify which areas of the Property are at your disposal but are not eligible land under the BPS;
34.9For any areas of the Property not at your disposal, please give details of why they are not at your disposal and provide copies of any agreements with third parties in relation to those areas.
34.10Please confirm that the number of the entitlements to be included in the sale does not exceed the number of eligible hectares of the Property at your disposal.
34.11Please provide details of the types of crops grown on the Property during the most recent Scheme year and the land parcels covered by each crop, and provide copies of pesticide and fertiliser application records for each land parcel, together with seed labels and invoices (or other evidence of cropping) if available.
34.12Please provide details of any breaches and penalties in relation to any cross compliance conditions.
34.13Please confirm that you have not done any act or thing which would prejudice the transfer of entitlements to the Buyer and that you know of no reason why the transfer might be prejudiced and that you will so warrant in the contract.
34.14Please confirm that either you received a Single Payment Scheme payment in 2013 or that you are able to provide evidence to prove that you were farming in 2013 and please provide copies of such evidence.
34.15Please provide details of all inspections that have been carried out by the RPW or one of its designated specialist agencies and confirm that there are no appeals pending in relation to them. If there have been any appeals, please provide the details of their outcome.
34.16Please confirm that you will warrant in the contract that you have fully complied with the cross compliance conditions and will provide the Buyer with an indemnity in respect of that.
35.Environmental land management schemes and capital grants
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Environmental land management schemes and capital grants
There are a number of environmental land management schemes (agri-environment schemes) and woodland capital grants, both current and closed, that may affect the Property. These will be different depending on whether the Property is in England or Wales.
Note it is important to establish if any legacy agreements and their terms and conditions are relevant to the property.
Closed schemes that may still apply include:
- Environmental Stewardship (see Drafting note, Environmental Stewardship- England).
- English Woodland Grant Scheme (EWGS).
- Farm Woodland Scheme (FWS).
- Farm Woodland Premium Scheme (FWPS).
- Woodland Grant Scheme (WGS).
Under the FWPS and EWGS, while these schemes may have ended, the terms and conditions still apply until the Schemes have been cancelled with the Forestry Commission or the Forestry Commission for Wales. At that time the Forestry Agreements should be cleared from the registered title to the property at HM Land Registry. This means that, if land is sold, the seller must notify the Forestry Commission or the Forestry Commission for Wales to require the buyer to succeed to the agreement. The buyer is required to complete the paperwork within a time frame or the seller is deemed to have breached the agreement and can incur quite substantial penalties.
For more information on closed woodland schemes in England, see Forestry Commission England: Historical Grant Schemes.
Environmental Stewardship- England
Environmental Stewardship Schemes operated under the Rural Development Programme (RDP) for England (2007-13) and are now closed, although existing agreements will continue until the ends of their terms. Transitional provisions apply to the sale or lease of land subject to Environmental Stewardship agreements. From 1 January 2023, all Environmental Stewardship (ES) agreements adopted domestic terms and conditions. This includes flexibility to allow ES agreement holders to leave an agreement early, without recovery, to apply for another land management scheme.
.
If there is an existing Higher Level Stewardship (HLS) agreement, under its original term, including some or all of the property, then best advice is to contact the RPA to see what obligations, if any, will transfer to the buyer and whether the RPA will require any repayments from the seller, if the buyer does not continue with the scheme.
Countryside Stewardship-England
Countryside Stewardship is the environmental land management scheme under the RDP for England (2014-20). An enhanced version is part of the new environmental land management (ELM) scheme.
Countryside Stewardship has three main elements:
- Higher Tier, high-priority habitats.
- Mid Tier, for normal habitat, including wildlife offers.
- Stand-alone capital grants, not linked to a multi-year agreement. These are separate from the capital grants offered through the Mid Tier or Higher Tier application process.
For more information on Countryside Stewardship, see Practice note, Post Brexit: timeline for UK agricultural policy and Defra; Guidance Countryside Stewardship
The seller should not have to repay monies received if the buyer does not take over the Countryside Stewardship Higher Tier or Mid Tier agreement on the property.
Glastir scheme: Wales
Glastir is the main agri-environment scheme in Wales. There are various different Glastir components, some of which are only available to participants in the Glastir Entry scheme.
The Seller is likely to have to repay scheme money and may suffer financial penalties if the Buyer does not take over the Glastir commitment on the Property.
When selling land subject to a Glastir contract, the Glastir guidance advises the Seller to contact the Welsh Government about the sale at the first opportunity. The Seller must notify the Welsh Government of any transfer or sale using the field maintenance (FM) notification process within 30 days of the transfer. Failure to do so is a scheme breach and the Seller is likely to be penalised.
Where options require the installation of capital works, such as fencing, tree planting or earth bank creation, these works must be completed before the transfer or sale where the Buyer is taking over the commitment.
These schemes will be replaced by a new system of Sustainable Farming Scheme, see Practice note, Transition to Sustainable Farming Scheme (Wales).
For more information, see Practice note, Glastir under the Rural Development Programme for Wales and Welsh Government: Glastir.
Has the Property entered into any agri-environment or environmental land management schemes or woodland schemes or any capital grant schemes (such as woodland, water, hedges and boundaries capital grants) or other schemes including pilot schemes? If yes:
(a)please provide copies of the relevant agreements, manual and any records required to be kept under the schemes;
(b)please provide details of any derogations from the agreements and copies of any related consents;
(c)please provide details of any outstanding works and other obligations under any of the agreements and the deadlines for their completion;
(d)please provide details of payments that have been made and payments that are due, including copies of the most recently submitted annual revenue claim and a copy of any submitted capital claims where relevant;
36.Cross compliance-(Wales)
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Cross compliance-Wales
Note: In England- the Agriculture (Removal of Cross-Compliance and Miscellaneous Revocations and Amendments, etc) (England) Regulations 2023 (SI 2023/816) came into force on 1 January 2024 and remove cross compliance requirements for recipients of the farm payments. Cross compliance will no longer be a condition of receiving the de-linked payment in England. Cross compliance still applies to Wales.
Cross compliance conditions are the standards and requirements a farmer must meet as a condition of receiving full Common Agricultural Policy (CAP) direct payments, such as the BPS payments. Cross compliance conditions also apply to farmers and other land managers who receive payments under certain RDP schemes, including all agri-environment schemes.
The cross compliance conditions apply to the whole agricultural area of a holding, regardless of how much land may be included in a scheme. From the buyer's perspective, any breaches they are concerned about would be in relation to the current scheme year, but it may be useful to identify on-going issues that may be passed to the buyer.
If the cross compliance conditions are breached, payments under the relevant scheme will be reduced (see Practice note, Basic Payment Scheme: Cross compliance penalties).
Since 1 January 2015, the requirement to conduct an annual Soil Protection Review (SPR) has been replaced with national minimum standards on soil management. These focus on outcome and do not require paperwork. In Wales, the Welsh Government has noted that under the BPS there is no longer any requirement to keep a soil assessment record, although it remains good practice to do so.
For more information on the cross compliance conditions, see Practice note, Basic Payment Scheme: Cross compliance conditions.
36.1Please confirm that all cross compliance conditions have been complied with in relation to the Property during your period of ownership.
36.2During your period of ownership of the Property, have there been any intentional or unintentional breaches of cross compliance conditions that have resulted in any reduction of payments? If so, please provide details.
37.Diseases, noxious weeds and pests
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Diseases, noxious weeds and pests
Enquiry 37.1
Certain animal diseases are notifiable diseases, which means that they must be reported to the Animal and Plant Health Agency (APHA). If a notifiable disease is confirmed, action is then taken to eradicate the disease and reduce the risk of it spreading. For more information on notifiable diseases, see Defra: Notifiable diseases in animals.
Schmallenberg virus (SBV) is not notifiable, but livestock keepers should contact their veterinary surgeon if they encounter cases of newborn cattle or stillborns that show malformations or symptoms of nervous disease. Their veterinary surgeon must then contact the APHA if they suspect SBV.
Enquiry 37.3
Injurious weeds are native plants that cause problems for farming or are harmful to livestock and must not be allowed to spread to agricultural land. The Weeds Act 1959 (WA 1959) specifies five injurious weeds. The Secretary of State may serve an enforcement notice on the occupier of land on which any of these listed injurious weeds are growing, requiring the occupier to take action to prevent their spread. The Ragwort Control Act 2003 amends the WA 1959 and promotes the more efficient control of common ragwort.
Part II of Schedule 9 to the Wildlife and Countryside Act 1981 (WCA 1981) lists invasive non-native plant species that are established in the wild, but pose a conservation threat to native habitats and biodiversity (the variety of living organisms). It is an offence to plant or otherwise causes to grow in the wild any plant on that list (section 14, WCA 1981). For more information, see Defra: Harmful weeds and invasive non-native plants: prevent them spreading and Practice note, Japanese knotweed and other invasive non-native species.
Enquiry 37.6
Wireworms
Wireworms are click beetle larvae. They attack tuber and root crops such as potatoes and can cause substantial loss in yield.
Rhizomania
A serious plant disease that attacks sugar beet crops. The virus can remain in the soil for decades. If the Buyer knows the field history, they can select resistant varieties of sugar beet.
Black-grass
Black-grass (Alopecurus myosuroides) is a weed that infests cereal and oilseed rape rotations in the UK. It can produce extremely high amounts of seed and can also spread rapidly, resulting in dramatic yield reductions. A buyer might avoid planting certain crops or adopt a different cultivation system if this weed is present on the Property.
37.1Have there been any cases of animals on the Property suffering from any notifiable diseases in the last six years, including without limitation transmissible spongiform encephalopathies (such as mad cow disease or scrapie), foot and mouth disease, blue tongue or Schmallenberg virus? If so, please give the date of the occurrence, details of the extent and the action that was taken.
37.2Are there any animal carcasses buried on the Property? If so, please indicate the location on a plan.
37.3Are you aware of the presence of any of the following on the Property:
38.Telecommunications and electrical apparatus
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Telecommunications and electrical apparatus
Many rural landowners allow mobile operators to install transmitting masts, towers or other electronic communications equipment on their property in return for a fee. This can be a good source of income for the landowner. A buyer should consider assessing the presence of any telecommunications equipment in the light of its long-term plans for the property on the basis that it may be difficult to get the operator to relocate or remove the apparatus and the operator may well share or upgrade equipment in the future.
All electronic communication apparatus is governed by the Electronic Communications Code , which is set out in Schedule 3A of the Communications Act 2003 (CA 2003) (as inserted by the Digital Economy Act 2017 (DEA 2017)) (2017 Code). The DEA 2017 repealed the former code contained in the Telecommunications Act 1984 (1984 Code). The 2017 Code came into force on 28 December 2017. The DEA 2017 made provision for the transition of the existing arrangements which had been made under the 1984 Code so the 2017 Code applies to telecoms agreements entered into prior to the date it came into force, but with modifications. For more information on telecommunications, see Practice note, 2017 Electronic Communications Code: overview.
On a sale of land, the presence of electronic communications apparatus would normally be apparent from an inspection of the property. The operator's rights should also be declared by the Seller in replies to enquiry 4.
Code rights are binding whether or not they are registered (paragraph 14, Schedule 3A, CA 2003) and therefore would not necessarily be apparent from an inspection of the title register.
When reviewing any agreements disclosed under enquiry 38.2, it is important to be aware of the extensive rights which operators could have under the 2017 Code including sharing, upgrading and assigning even if agreements prohibit such actions. See 2017 Electronic Communications Code: overview: Part 3: Assignment of Code rights and upgrading and sharing of apparatus.
The new Product Security and Telecoms Infrastructure Act 2022 (PSTIA 2022) further strengthens operators' rights to share masts and equipment by making this a code right for new agreements. The right to upgrade masts and equipment has been a code right since 2017. The right to assign rights is contained in paragraph 16 of the 2017 Code and it makes any agreement which prohibits or limits assignment or adds conditions (such as the payment of money) void (though does allow the requirement for a guarantee agreement). Enquiry 38.5 asks about any current sharing arrangements with other mobile operators but, even if there are none, the buyer should be made aware that there could be some in the future.
Additionally, the PSTIA 2022 gives retrospective rights for operators (with subsisting agreements under the 1984 Code and apparatus installed before 29 December 2003 where there is no Code agreement) to share and upgrade apparatus installed under the land subject to conditions (sections 58 and 59 PSTIA 2022 which come into force on 17 April 2023). We have added enquiry 38.11 as one of the conditions is that the main operator attaches a notice, in a secure and durable manner, to a conspicuous object on the relevant land. A buyer will want to know the exact location of any underground apparatus on the Property so we have added enquiry 38.12.
PSTIA 2022 also extends the rights to other operators to install power lines to any apparatus of the main operator (section 60 PSTIA 2022 which came into force on 7 February 2023). The main operator (or another operator with the agreement of the main operator) is also given rights to upgrade equipment or carry out works in connection with this subject to certain conditions.
38.1Are there any telecommunications or electrical apparatus on the Property, including any masts, towers, electricity substations, or related power lines?
38.3If the location of the equipment is not easily identifiable from the agreement, please provide a plan showing the showing the area occupied.
38.7Except where details have already been given elsewhere in replies to these enquiries, please give details of:
38.8Please confirm that the telecommunications or electrical apparatus on the Property has been erected with either deemed planning permission under Part 24 of Schedule 2 to the Town and Country Planning (General Permitted Development) Order 1995 (SI 1995/418) or with planning permission.
38.9Has any notice been given to the operator during your period of ownership requiring the alteration of the apparatus? If so, please give details.
39.Renewable energy
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Renewable energy
Renewable energy is energy that is generated naturally and continuously in the environment, as opposed to energy generated using oil, coal, gas or nuclear power. Renewable energy sources that might be on agricultural land include:
- Wind power, from wind turbines.
- Solar power, from solar photovoltaic (PV) panels for electricity or solar thermal panels for hot water.
- Hydroelectric power.
- Biomass, usually biomass boilers burning wood.
- Anaerobic digesters, generating biomethane gas.
For more information, see Practice note, Renewable energy: overview and Practice note, Support for low carbon heat.
Most renewable energy generation is eligible for a subsidy under the:
- Renewables obligation (RO) for larger-scale electricity generating installations (see Practice note, Renewables Obligation. The RO closed to new generation on 31 March 2017 and is being replaced by support under a contracts for difference (CFD) scheme (see Practice note, Electricity Market Reform (EMR): Contracts for Difference).
- Feed-in tariffs (FITs) for smaller-scale electricity generating installations. The FITs scheme closed to new applicants on 31 March 2019 (see Feed-in tariffs (FITs) toolkit).
- Renewable Heat Incentive (RHI) for renewable heat schemes (see Practice note, Renewable Heat Incentive (RHI): non domestic scheme). The non-domestic RHI closed to new applicants on 31 March 2021. Payments begin on the tariff start date and will last until 31 March 2041. No tariff payments will be made after 31 March 2041. The deadline for new applications for support under the domestic RHI was extended until 31 March 2022.
There are significant capital costs involved in renewables development, including the "at-risk" costs of obtaining planning permission and of connecting to the grid. The Seller may have undertaken the development or granted:
- An option to a renewables developer to undertake preliminary investigations and to seek planning permission.
- A lease for the renewables installation with related rights, for example, a wind farm lease would prevent obstruction to the windflow near the turbines and include related rights of access.
The Seller may also have a power purchase agreement (PPA) with the renewables developer to receive electricity from the installation at a reduced rate or with an energy company or other third party to sell the electricity and other benefits generated by the installation.
39.1Are there any renewable energy installations on the Property (for example, wind turbines, solar panels, batteries, heat pumps, biomass boilers or anaerobic digesters) (in this enquiry called a "RE installation")?
39.2If the answer to enquiry 39.1 is "yes", then please:
(a)provide a copy of any agreement or wayleave and a plan showing the location of each RE installation;
39.4For any RE installation belonging to the Seller that is included in the sale, please:
(a)confirm whether the Seller has the benefit of any warranty or guarantee in respect of the installation works. If so, please supply a copy;
(b)confirm whether there is any finance agreement or grid connection agreement relevant to the RE installation. If so, please supply a copy;
(c)confirm whether there are any wayleave agreements, deeds of easement or any other agreements granting rights over neighbouring land which relate to the RE installation. If so, please supply a copy;
(d)confirm whether the Seller (or its predecessor) received a grant towards the cost of the RE installation. If yes, please supply details of the amount received and confirm that none of the grant is repayable;
(e)confirm that the RE installation complies with all statutory requirements, operation standards and non-statutory guidance for RE installations of that type;
39.5For any RE installation that belongs to a third party, please:
(a)supply a copy of the agreement, lease or other document that records the terms of the permission to place the RE installation on the Property;
39.6For all RE installations, please confirm that the installation has been accredited under the relevant scheme (for example, the Renewables Obligation (RO), Contracts for Difference (CFD), Feed-in tariffs (FITs) scheme or Renewable Heat Incentive (RHI)) and provide details, including certification of installation and installer and ongoing compliance with all the scheme requirements, rules and guidance for the RE installations of that type.
40.Certification schemes and genetically modified crops
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Certification schemes and Genetically modified crops
Organic farming is a system of farming and food production, where farmers aim to produce high-quality food, using methods that benefit the environment. To sell produce as organic, producers have to obtain its certification from a certification body, which includes the Soil Association the Red Tractor the RSPCA Assured, the LEAF Marque, the Soil Association Organic Standard Scheme, the Farm Assured Welsh Livestock and other schemes.
Under the Soil Association’s organic standards, all weedkillers are banned, and farmers are only able to use a very limited number pesticides in very restricted circumstances.
The term "genetically modified organisms" or GMOs are organisms in which the genetic material (DNA or RNA) has been altered in a way that does not occur naturally, and the modification can be replicated and/or transferred to other cells or organisms. This usually involves the removal of DNA, its manipulation outside the cell and reinsertion into the same or another organism. The most common types of GMOs that have been developed and commercialised are GM crop plant species (such as maize, soybean, oil-seed rape and cotton). These plant varieties have been genetically modified primarily to provide resistance to certain types of insect pests, provide tolerance to herbicides and improve yield.
The use of GMO have been banned in general use in the UK in line with the EU directives, but under the recent The Genetic Technology (Precision Breeding) Act 2022-2023, the UK may allow precision breeding technologies that make targeted genetic changes to produce beneficial traits that can also occur through traditional breeding and natural processes. This makes it different to genetic modification (GM) where modern techniques are used to insert functional DNA from an unrelated species into another species.. For further information see Practice Note: GMOs: genetically modified organisms.
40.1Is the Property certified as organic under any organic certification programme? If so, please provide a copy of the current certificate, identify on a plan the organic areas and give details of the farming activities.
40.2Is the Property in the process of conversion to organic production? If so, please identify on a plan the relevant areas and details of the farming activities.
40.3Please confirm whether the Property, or any business carried on from the Property, is entered into the Red Tractor Scheme, the RSPCA Assured, the LEAF Marque, the Soil Association Organic Standard Scheme, the Farm Assured Welsh Livestock scheme or any other schemes which cover standards for safety, welfare and environment. If so, please give details.
41.Growing crops
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Growing crops
The term "growing crops" is used for the crops that may be growing on or in the land, having not yet been harvested, at the time the sale completes. The Buyer will need to know what these are so they can plan their own cropping schedule. The Buyer may need to pay for the value of growing crops in addition to the purchase price if the Seller does not retain a right of holdover to come on to the Property after completion to harvest the crops.
The Buyer will need details of the fertilisers and sprays applied to the land, as these may have a residual effect.
Cropping generally has a five or six year rotation, and the Buyer will need this rotation history.
42.Animals
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Animals
This enquiry is only relevant where animals are included in the Transaction. The responsibility for welfare of all farmed animals lies with both the keeper of the animals (the person who has the day-to-day responsibility) and the owner of the animals.
If any animals are included in the Transaction, the Buyer will have to raise a number of additional enquiries (including veterinary enquiries), obtain details of any passports and animal tags, and make sure that animal welfare standards (statutory and codes of practice) have been complied with. The Buyer will require copies of identification information, health and welfare records, veterinary records including vaccination and disease risk details, any relevant registration or authorisations which will vary according to the animal, for example see, Agriculture and Horticulture Board, Cattle purchasing checklist .
43.Holdover
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Holdover
If the Seller or any tenant requires any right of holdover, either for crops in the ground until they are harvested or storage holdover (such as grain in a grain store), this should be addressed in the sale contract. The rights of access to harvest or remove the crops along with any costs of storage will need to be specified.
46.Tenancies
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Tenancies
This enquiry is relevant, even if the Seller intends to give vacant possession on completion, as Buyer will need to conduct due diligence on the tenancies to identify if any tenants have rights to remain after completion, and will also need to be aware of the terms of any tenancies in respect of potential claims after completion.
47.Reservoirs
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Reservoirs
For information on reservoirs, see Practice note, Flood and Water Management Act 2010: Reservoirs.
48.Carbon credits / voluntary conservation agreements and climate change
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Carbon credits/Climate change
This is an optional section, which seeks to establish whether the Property:
- Is used for any existing carbon credit agreements.
- Is potentially adversely impacted due to climate change.
- Has recorded it current carbon footprint, information which is relevant for institutional clients, such as banks and pension funds and increasingly important for all farming businesses as regulation tightens and has an impact on the capital investment.
Carbon credits
The buyer will want to ensure that any form of agreement is disclosed, while we would expect that the general enquiries pick this up, this section will disclose more helpful information to the buyer where there is a known managed project on the Property.
In the voluntary carbon markets:
- A carbon credit is a certificate evidencing the certified reduction, avoidance or removal of one metric tonne of CO2 equivalent (CO2 eq) (tCO2e) from the atmosphere.
- In regulated carbon markets, a carbon credit is defined in the specific scheme's rules. It usually represents a right to emit one tCO2e and is used for compliance with the scheme (see Allowances above).
For more information, see Practice note, Voluntary carbon markets (VCMs) for carbon credits.
A carbon sinks absorb more CO2 from the atmosphere than they release. The main carbon sinks include forests, grasslands, soil, peat bogs and the oceans. This is an indirect or passive form of sequestration. Article 1 of the UNFCCC defines a sink as "any process, activity or mechanism which removes a greenhouse gas, an aerosol or a precursor of a greenhouse gas from the atmosphere." Forests and soils are significant Carbon sinks.
Carbon offsetting involves compensating for the CO2 or other Greenhouse gas (GHG) emissions relating to an activity by reducing, removing or avoiding emissions from the atmosphere through another process or activity. For example, a tree planting scheme could offset some of the CO2 emissions of a business. Carbon offsetting is a key way for the private and public sectors to voluntarily reduce their carbon footprint and combat climate change.
Climate Change
The Law Society guidance on the Impact of climate change on solicitors, was published on the 19 April 2023 , see Legal update, Law Society publishes climate change guidance for solicitors and provides comprehensive and far-reaching guidance for solicitors on how climate change, both the physical and legal risks, may be relevant to client. The guidance puts more onus on the conveyancers assessing the physical and transition risks associated with transactions, such as how will climate change affect the value, marketability and insurability of the Property now or in the future. Parties may also want to consider ensuring that any environmental search assess the climate risk associated with the property, such as flooding, drought or subsidence caused as result of extreme heat.
48.1Has the seller entered into or the process of entering into any carbon credit agreements, carbon capture and sequestration agreements, voluntary carbon market, licences, covenants or other agreements used for payment for the process of capturing and storing atmospheric carbon dioxide in the soils, trees or land including agreeing to carry out regenerative farming practices or conservation for payment or otherwise?
48.2If so, please provide a copy of any agreement and a plan showing what part of the Property is affected?
48.7Are any standards that are applied to the agri-carbon sequestration voluntary or regulated? [Currently there is not regulated market outside the government’s Woodland Carbon Guarantee Scheme but markets are evolving all the time and we need to future proof these enquiries. The Peat-land code is a voluntary certification standard for UK peatland projects]
48.10Please confirm that any carbon offset credits have been used only once and are not included in any government backed scheme, such as Environmental Land management?
48.11Has the seller ever done any analysis or carbon accounting on the property including assessments of natural capital? If so, please provide a copy?
48.13Has the Seller calculated the current carbon emissions of the Property? If so, please provide a copy of the report.
48.14Is the seller aware of any farming infrastructure/buildings that needs upgrading in line with current regulation? If, so what are estimated costs involved?
48.15Is the seller aware of any climate change risk/ extreme weather events that would result in any flooding, subsidence, high risk of damage or other factor that would mean that the Property is uninsurable or un-lendable?