Landlocked

Matthew Cameron helps a reader who is concerned over the legal status of a piece of land he would like to buy

Tenancy tangleWe are seeking to buy a property in Midi-Pyr�n�es with the hope of setting up a g�te and a small gardening business. The land is currently being farmed by a person other than the owner and we have had conflicting information from estate agents with regard to the legal situation surrounding the use of land where permission has been given by the landowner to another farmer to use the land for their own crop production.The information we have been given can be split into two main categories. Firstly we were told: It’s your land. You can withdraw consent at any time and the other person must accept that instruction immediately!’The second piece of advice is a little more complicated. If a person other than the landowner has been given permission to farm the land and has paid by some recordable means (eg a cheque) then they have a right to farm the land as a tenant and the owner cannot revoke the permission. The only way the owner can retain control of his land is if there is a 7-year gap when the land is no longer farmed by the tenant. If this doesn’t occur, the access is permanent and can even be handed down through generations. We were also told that a number of landowners allow their land to be used but because of this law they unofficially accept some form of payment in either cash or crops that is never recorded and is purely a gentleman’s agreement. This way the owner can retain control of his land. This obviously has quite serious implications for us as we could unwittingly buy a property with land that we have no control over. Simon HodgsonA reply to Mr Hodgson leads to the discussion of two main issues: one being the role of the agent, the second being the question of the rights affecting the land. On the first, I comment with some trepidation, not intending to offend in any way the vast majority of agents who do offer a valuable service in bringing together seller and buyer, and in facilitating an amicable and suitable transaction between the parties.Agents are not, however, entirely dispassionate. Their livelihood depends upon transactions being completed and commissions being paid. Understandably, therefore, they have an interest in deals completing. Thus a reply along the lines of, it will be all right’ is not unusual. While most agents will work to resolve potential issues of conflict, they are not necessarily obliged to do so. Their professional status would of course not allow them to mislead any one of the parties, but the obligation rests there. Once a party is aware of the existence of a potential issue, they have discharged their duties with regard to the sale. Given that the agent will not be paid if a deal falls through, it is apparent that he would like to see a matter complete.Furthermore, and this must not be overlooked, the agent will generally not want to hold himself out as being an expert in legal issues, so where matters of such concern arise, a prudent buyer will seek the counsel of an independent lawyer, who will be acting in their interests only.The main point of the question, though, relates to land rights and leases that may be granted to third parties. Here we are dealing with agricultural leases, so we shall concentrate specifically on those. It will be helpful as a background to the specific question to consider the general rules applying to such leases, which we can then apply to the current question.An agricultural lease is for a period of 9 years and at the end of the 9-year period, the tenant has in principle a right to renew the lease. If the landlord does not want to renew the lease, he would have to give good reason why he should have the property back himself, and he may have to pay the tenant an indemnity.Given this background information let us look at Mr Hodgson’s position. In this case, there is a person in occupation of the land, and the question is whether that person has any rights or indeed whether a lease exists. The agent has suggested that there isn’t a problem, the land is theirs and they can withdraw consent at any time. It is a little risky, to say the least, to proceed on the basis of this analysis. Indeed if there is a lease in place, it is certainly not true to say that the property is theirs to do with as they will. In reality, it is theirs, subject to the right of the tenant farmer to occupy and exploit that part of the land.

Market valueAs I have mentioned above, a French agricultural lease runs for 9 years, and so it is not true that any consent can be withdrawn at any time. Nor would the occupant have to accept any instruction to quit immediately. In the absence of any fundamental breach of obligations by the tenant – and any breach would have to be decided by a court, not the landlord – then the occupation can only be terminated at the end of the 9-year period.To establish if a lease actually exists, therefore, it would need to be clarified whether the same piece of land has been used, and whether a rent has been paid. The amount of any rent is not itself important. It does not have to be a reasonable market value for the type of property.In general, it is preferable that a lease would be in writing. However this is not an absolute obligation for a French agricultural lease. Thus two parties can enter into a lease, even if one of the parties may not necessarily have wished this to be the case. Hence an unwritten lease gives rise to two major concerns – first as to whether it exists or not, as in this case, and secondly what are its underlying terms. For the second question the general position would be that each department has its own standard terms for an agricultural lease that would be implied in the absence of any written evidence to the contrary.

Written confirmationYet it is the first concern that causes us the greater problem. On the information given, it is highly possible that a rural lease exists in this case on the basis that the occupant has used the land regularly to the exclusion of others. It is possible that such a concern could be avoided in a number of ways. First, the landowner and occupant may have entered into a form of agreement under which they acknowledge that the occupation of the land is by way of kind permission, not by way of lease. Such agreements require very careful drafting.Secondly, the proposed buyers could obtain a written confirmation from the occupant that their use of the land is absolutely not by way of lease. Again such a confirmation would need to be drafted carefully, probably by the notaire, and checked by the buyer’s solicitor in England. As a rule of thumb, though, if the occupant says that he is indeed happy to sign such an agreement then it is likely that there won’t be a problem; it is when he bluntly refuses to sign anything that the buyer must beware.The final question relates to the land not having been used for a long period. The period of 7 years comes in all probability not from a minimum period of non-use but rather from the fact that if a landlord wishes to serve notice on a tenant to terminate the agricultural lease at the end of the nine-year term, then he must serve his notice at least 18 months in advance, and must give a good reason for his intention to terminate. Failure to exploit the land properly may be a good reason to do so, and if that notice of termination needed to be at least 18 months before the end of the term, that would lead us to being just over 7 years into the term.In such a situation – as well as for all property purchases – early independent legal advice would be an invaluable investment. Ashton Graham www.ashtongraham.co.uk/france