Agricultural Covenant

Farmers have always needed accommodation for staff required to work unsocial hours and local planners sometimes agree to a residential property being built in an otherwise rural location on the strict condition that it is only used by a key farm worker. This restriction will be enshrined in an agricultural covenant intended to prevent the property then being occupied by anyone not employed full time in agriculture. It is a form of tied accommodation.

Similar restrictions may also apply to property built on a horticultural holding. This means one cannot buy a smallholding and merely treat the land as a large garden. If the horticultural business closes, the planning permission for the property becomes invalid. There may be room for negotiation if the planners are persuaded that the holding no longer generates sufficient revenue to give the owners a living. They may well agree to a compromise where one member of the family continues to run the smallholding commercially while their partner follows an outside occupation. However, if the business were to be neglected deliberately then a condition of the planning permission would be in breach which could well lead to expensive legal problems.

Most local authorities in rural areas have a strict policy on agricultural (and horticultural) tenancies and it is by no means certain that the planners will agree to a covenant being lifted even when the agricultural employment no longer exists.

If you are interested in buying a property which remains subject to an agricultural covenant it may sound extremely cheap compared to a similar property without this occupational restriction but, in many areas, green-belt countryside, for example, the planners would rather see the property left empty and fall into disrepair than agree a change of use. They will argue that a single breach of their strict policy would create an unacceptable precedent.

Accordingly, before getting too excited over the attractive price of the property, best advice is to get your solicitor to check out the exact terms of the agricultural covenant and whether there may be room for compromise .