Business Clinic: Advice on first registration of land parcels

Whether it’s a legal, tax, financial or management question, Farmers Weekly‘s Business Clinic experts can help.

Here Chloe Cosham, a solicitor in Thrings agriculture team, sets out issues to consider when making a first registration of land.

Q: I am proceeding with a first registration of my farm with the Land Registry. The property was acquired in several parcels. Should I combine them as one unit or is it beneficial to keep each part separate? Also, it may be better to separate the farm buildings from the farmland – please advise.

A: The best course of action will largely depend on the structure of your farming business and plans for the future of the farm.

Whether the various parcels of land can be registered with separate title numbers will depend on what is in the deeds for each parcel of land and on how the application to HM Land Registry is structured.

If just one application is lodged which includes all property deeds, and all parcels are owned by the same person(s), it is likely that the Land Registry would in any event register all parcels under just one title.

See also: Business Clinic: Should we undo inheritance plans?

Your decision on whether to combine the parcels or keep them separate could also be affected by how easy it is to produce clear and compliant plans, what you are likely to do with the land in the future and the proposed ownership of the land.

Separation of farmland and buildings

You query whether it is best to register the various parcels under separate titles.

It might be that you intend to sell, lease or gift only one parcel or building and want to avoid any complications of it being registered as part of the wider farm under a single title number.

If you sell or transfer part of the farm only, it will be necessary to grant rights over and reserve rights for the benefit of any land you are retaining, so careful consideration will need to be given to these at the time.

However, if you were looking to register the various parcels under separate title numbers so that relevant rights are incorporated or are granted and reserved now, this is not possible.

This is because the ability to grant rights and reserve rights over other titles is only possible where the land in such titles is owned by different people.

Where all parcels are owned by the same people, “unity of seisin” (unity of ownership) applies, which is a legal principle where an easement or restrictive covenant over land is extinguished when the freehold ownership of both the benefited and burdened land becomes held by the same person in the same capacity.

You would consequently face the same complexities as those described above if you decided to transfer a single parcel of land later on.

Separating out the various parcels would only be a suggested course of action if you wanted each to be owned by a different person, or maybe by various companies at this stage.

You would then be able to deal with the grant and reservation of rights now.

It would, however, require a Land Registry compliant plan for each parcel. It is important to note that transferring ownership of some parcels is likely to have tax and other consequences for you and your farming business.

Registration as one title

It is likely to be simpler and more cost effective to register your farm under one title and to separate parcels as and when these are sold or transferred, especially if the farm is currently managed as one unit.

There are other advantages to having your farm in one title. A bank, for example, may more readily understand what you own and so what they may be able to secure a loan which, in turn, may make it more likely they would offer a loan.

Should you wish to sell or develop just one parcel in future, transferring the relevant land out of a larger title would give a future buyer more control over any rights which are granted and reserved and any covenants which are imposed on any land sold and any land you retain.

The ability to have a say in these rights and obligations may be quite attractive to future buyers, especially where any development is intended.

No one knows what the future holds and so having the farm in just one title is likely to offer greater flexibility in future, when a parcel or building is sold, or a contract for development is entered into.

With every farm and farming business being unique, there is never a one-size-fits-all solution to this question and so it is important to get the support of professional advisors to ensure that your individual circumstances are factored into any plans for your farm’s future.

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