Getting good advice on agricultural occupancy conditions
AGRICULTURAL occupancy conditions arise where residential developments are approved as an exception to normal planning policy - normally within open countryside, where new houses are generally restricted.
Commonly, where new houses are allowed in the countryside, the developer must provide strong justification to the council that the house is essential to the proper functioning of a farm or rural business. There are very strict tests, so such conditions would only generally arise with the knowledge and intention of the person making the planning application.
Once the conditions are imposed however, councils are understandably wary of agreeing to their removal, and such a proposal can be difficult to justify.
Valuation advice should always be sought on the implications of selling straight away or trying to remove occupancy restrictions first. This is because each situation is different and there are other considerations to factor into any strategy, such as Capital Gains Tax or Agricultural Property Relief under the Inheritance Tax regime.
For example, removing a restriction on a farm cottage on a 320-hectare (800 acre) farm which has an existing farmhouse (unrestricted) will result in an insignificant gain or uplift in value if the farm is sold as a whole.
If the property has a strong residential bias, it is worthwhile formulating a strategy for the removal of the occupancy restriction prior to selling, as the presence of the condition can deter purchasers because of financing difficulties in restricted properties.
Many councils, particularly in rural areas, have adopted dedicated policies, setting out the means by which the removal of an occupancy condition can be sought.
Very often, this puts an onus on the applicant to prove there is no demand. This may take the form of a marketing exercise - the property should be marketed at a value reflecting the condition for a specified period. If no offers are received, the council may agree to the removal of the condition.
There are many pitfalls, however, and those wishing to go down this route should be properly advised.
But alternative avenues are available in some cases, perhaps where marketing is not an option, or it is undesirable to wait while it takes place.
Such avenues should be explored before embarking on any marketing campaign. An example would include discrepancies between the original plans for the dwelling, and the construction of the dwelling itself. Such discrepancies may render the condition unenforcable.
Similarly, where there have been significant breaches of conditions, an argument may exist that the occupancy condition does not ‘bite’.
Non-compliance with the condition for a specified period of time can also render the condition unenforcable.
All such examples involve complicated assessments and application of the law surrounding planning and its enforcement, so owners should be fully advised of all of their options before making an application to the council.