Farm Building Facelifts – Navigating the legal path to building conversion

There was good news for farmers earlier this year when permitted development rules were relaxed, making it easier to convert unused agricultural buildings into commercial and residential ventures without all the fuss, time and expense of having to seek planning permission.

Diversification is becoming an increasingly popular way for cash poor but land rich farmers to generate much-needed extra cashflow. But what are the legal considerations involved in such schemes? Andrew Little, Associate Director and agricultural specialist at Ware & Kay incorporating Pearsons & Ward Solicitors in Malton, York, & Wetherby reports.

There are many ways farmers can convert their unused buildings into money-spinners, but common ones include:

• tourism: holiday lets, B&Bs, camping/ glamping;
• business lets: office lets, storage units, car parking;
• retail: farm shops, farmers’ markets;
• food and drink: cider brewing, butchery, ice cream;
• hospitality and events: festivals, cafés, wedding, concert and conference venues.

Before you decide which diversification scheme to opt for, you should seek legal advice from specialist agricultural lawyers who can help you decide what you want to achieve, outline the pros and cons of each possible project, and assist you in carrying out a careful cost/ benefit analysis and risk assessment for each option.

Once you’ve made your choice, they can help you obtain the necessary permissions from all those with a legal interest in the property, smooth things over with any relevant third parties, work with your financial adviser to ensure you have adequate funding in place for your project, and address any legal issues that might arise from your chosen scheme. This could include:

Property issues

The permitted development rules have been relaxed considerably: the amount of floor space that can be converted from agricultural to other uses has increased from 500-1,000m² as has the size of new buildings or extensions that can be erected on farms of more than five hectares. For smaller farms, the permitted size of such development has increased from 1,000-1,250m², while the number of homes that can be delivered through the conversion of agricultural buildings has been doubled from five to 10. However, if you want to expand your scheme beyond the permitted limits you may still need to get planning permission, which our experts have vast experience in securing.

In addition, they will make sure you have all the easements, wayleave agreements, tenancy agreements or licences in place to ensure your scheme can operate, as well as ensuring there are no restrictive covenants affecting your land which could thwart your plans; if there is, they will set to work getting these removed.

Insurance and tax

Whatever scheme you opt for, it is likely that you will need to take out some form of insurance. Holiday lets, for example, need to be covered by buildings and contents insurance, as well as employers’ and public liability insurance policies – our experts can refer you to specialist insurance providers to obtain the most appropriate policies for your scheme.

Our legal team will also work with tax experts to make sure your diversification project is set up in the most tax-efficient manner, and will also ensure your scheme takes advantage of all possible tax reliefs, such as business property relief or agricultural property relief, to minimise inheritance tax liabilities.

Regulatory and contractual issues

You may need to implement data protection and intellectual property systems, particularly if your venture is consumer-facing and, if you are going to need permanent or seasonal staff, our specialists will draft any necessary employment contracts and ensure all health & safety requirements are observed.

 For further information or an informal discussion, please contact Andrew Little on Malton 01653 692247, York 01904 716000, Wetherby 01937 583210 or email andrew.little@warekay.co.uk to see how we can assist.