When land is being promoted or safeguarded for strategic development, it’s crucial that it is managed appropriately in the meantime - if not it could have a major impact on the viability of any future scheme.
Here are six key considerations for the owners of strategic land still in agricultural or amenity use:
Review any agreements on the land before purchasing
This is essential as a new owner could be restricted by existing agreements, unable to gain vacant possession or required to pay compensation in order to do so, for example. Consequently the yield on the land may be reduced which would adversely affect the financial potential. However, agreements may be in place which are suitable and manageable in the context of the strategic plan. Professional advice is recommended to mitigate/manage any potential inherited risk.
Flexible agreements to allow access for surveys
When setting up an agreement, whether that be a Grazing Licence or Farm Business Tenancy, it is essential to ensure there are flexible terms not only to break the agreement at short notice (usually between one and three months) but also to allow for surveys on the land at any time – to include walk over and intrusive surveys. This needs to be expressly documented in the agreement.
Compensation provisions should also be carefully considered when drafting this clause as it may be there is no provision for compensation if the land is let on a nominal rent. However, if the land is let out at a market rent it is likely compensation will be required for any crop loss or damage to the land.
A key ingredient to ensure the relationship works for the landowner and the tenant is communication – especially if the tenant keeps livestock or is about to start planting a crop. It will often work in the tenant’s favour if surveys can be moved a day or a week at certain times of year to allow for seasonal peaks in land management such as the harvesting of arable crops or mowing for forage. This will avoid unnecessary disturbance and compensation and maintain a good landlord and tenant relationship for further disruption which is likely to be inevitable.
Transparency and active tenancy management
An open and transparent relationship with any occupier is important from the start. It is usual to have a succession of short-term agreements of between 12 and 24 months although sometimes the agreements are longer depending on the aspects and location of the site. However, longer term agreements should still have a short break clause should the landowner need to regain possession.
The occupier should be aware of the intentions for the land – which are likely to be obvious – but ensuring they are kept informed of the plans is likely to make the process easier and avoid unnecessary friction when the land needs to be delivered up for development.
It is suggested that land destined for development be inspected more frequently than normal and a robust file note and actions list formed. In doing this it is also essential to ensure any tenant/occupier is fulfilling their tenancy obligations, for example keeping the land free of invasive weeds such as Japanese knotweed which, if not treated and managed, could because a very costly and time-consuming problem for the landowner. Tenants must also keep the land free from public access other than designated rights of way, guard against fly-tipping, and not sub-let.
Maximising interim value
It may be possible to gain a premium income from sites depending on their location. There are three main opportunities here:
• Larger parcels of land – where land is going to be held longer term commercial agricultural rents can be charged relative to the quality of land. Productive blocks of land should be marketed locally where appropriate to obtain a commercial rental income
• Smaller paddocks – where well-fenced on the edge of urban locations are often in high demand from the equestrian community and can provide premium rents on short-term agreements. Small areas of under 10 acres are often manageable and attractive for individuals who are not looking to pay out large livery bills
• Letting land as Compound sites – due to the strategic location of the land holdings they are often attractive to infrastructure projects which require compound sites. Premium weekly rents and over-run fees can often be generated for this type of let as well as services being brought to the land. However, agreements need to be carefully drafted to ensure business tenancies are not created which give the potential for the tenant to claim security of tenure.
Overall, in the majority of cases, it is preferable to have the land occupied rather than allowing it to sit vacant. Vacant land can become overgrown and often leads to non-authorised use therefore it is sometimes in the interest of the landowner to have someone actively managing the land but for a nominal rent which avoids the costs maintaining the land in hand. These agreements are common on smaller strips and land which cannot be farmed commercially.
Managing and preventing unauthorised public access S31(6) depositions.
As we are talking about strategic development sites, the location is likely to mean public access could be an issue. A landowner can prevent new rights of way being created or claimed on land by actively managing it to prevent unauthorised public access. There are various means of doing this: physical restraint in the form of locked gates, fences or other obstructions and verbal restraint.
Under section 31(6) of the Highways Act 1980, landowners can deposit statements and declarations with the county council acknowledging public rights of way across their land and stating that they have no intention to dedicate any further public rights of way.
The requirements for establishing that a claimed route should be added to the Definitive Map and Statement are that it has been used by the public without the need for permission for an uninterrupted period of at least 20 years. A valid deposit under section 31(6) stops time running forward for the acquisition of public rights by usage and constitutes an effective challenge for any future claims. It must be noted that the public has the right to challenge this but must evidence usage for a 20-year period.
Health and Safety – tree safety surveys
Any land that has public access, whether that be public rights of way, open access, land alongside a public highway or residential properties, should be risk assessed for any hazards to the public. Anything identified should have the necessary actions taken to minimise the risk.
One particular area of focus is arboriculture management. It is recommended that if trees border land which the public can access a tree safety survey is undertaken on an annual or bi-annual basis, depending on the recommendations of the previous report, to identify and allow for the removal of any potential life-threatening hazards.
Further information
Read more: Risk and reward: mechanisms to realise the potential of strategic land
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