Business East Midlands May/June issue
In any economic climate the chance to earn additional income from land and property that you already own is always something to be looked at and now more and more landowners are realising the additional earning potential of their biggest asset. Richard Wollacott, Agricultural Law Specialist at Fraser Brown in Bingham looks at the legalities to be considered before diversifying.
Over the last 20 years mobile phone masts have been seen as an easy source of income for no expense - a way of diversifying with little effort. But as many of the original leases are coming up for renewal landowners are finding that they are not in the strong negotiating position they thought they were in. Because leases for mobile phone masts are not the same as normal leases, the legislation makes it extremely difficult for landowners to claim back possession of the land. This means their bargaining position can be very weak. Similarly if a landowner allows a mast to be installed before the legal formalities are in place they could be stuck with a mast on terms that are not what they would have wanted or first agreed to.
Along a similar but ‘greener’ line, there are currently a small but increasing number of landowners looking to erect one or a few wind turbines to supply electricity to the national grid. Given the public outcry at many of the larger schemes it is not surprising that planning consent from the local authority would be required before going ahead with any number. However if there are more than two turbines or if the height is more than 15 metres an Environmental Impact Assessment will also be required and can be obtained by speaking to the local planning office.
Another popular way of diversifying is to convert underused farm buildings to workshops or offices for rental. This will require planning consent for the conversion works but may also require change of use consent depending on the activity to be carried out there. This type of diversification and indeed any type where the use of the property and land is changed from agricultural to something else may also influence inheritance tax planning and Agricultural Property Relief so an expert in these matters should be consulted before any work is carried out.
In addition to diversification of property, diversification into new crops for use as fuel is becoming more widespread. Whilst the use of existing traditional crops for fuel instead of food is a very political issue, crops grown specifically for their energy use is on the increase.
Crops such as willow coppice, miscanthus and reed canary grass are being given financial support to make them more attractive. Woodland, often regarded as too much effort to manage in the past, is now also being used to produce wood pellets to fuel woodchip boilers. While this can give savings on fuel bills, care should be taken when entering into supply agreements.
Fraser Brown is a dynamic law practice working at premises in Nottinghamshire through its branches in Nottingham, Radcliffe on Trent and Bingham.
Its philosophy is to deliver superior legal advice through a personal and highly professional service for both commercial and private clients. Since 1990, Fraser Brown has acquired eight established and respected local firms as part of its major growth strategy for doing business in the 21st Century.
Fraser Brown is one of the region's longest established firms of solicitors. Over the last 12 months, it has experienced significant growth in areas such as property, contract work, construction and general litigation.