The general principle of “caveat emptor” – buyer beware – applies to all land purchases, but has particular significance for rural properties. Not only is a farm a home, but also a business. Failure on the part of a purchaser to adequately investigate the property can have not only functional implications, but often monetary consequences too.
It is generally advisable for purchasers to conduct pre-purchase searches or enquiries prior to entering into the contract – once contracts are exchanged, the purchaser is locked into the deal and it will be too late to withdraw if a problem arises.
Some common searches include:
- Livestock Health & Pest Authority – provides information regarding chemical residue and stock diseases.
- Crown Lands – ascertains whether there is any land within the boundaries of the farm that does not belong to the Vendor and for which a rental may be payable to the government.
- Mineral Resources – with mining and gas installations becoming ever more common, this search identifies whether any exploration or drilling licences affect the property.
- Water entitlements – the implementation of water sharing plans is changing the nature of water licences, whereby water entitlements that were once attached to the land can in some situations now be severed from the land and sold separately. The distinction is important not only for the purchaser’s use of the water, but also as it alters the conveyancing process in terms of ensuring the purchaser receives legal title to use the water.
- Building entitlements – the introduction of new local environmental plans is changing Council requirements regarding the lot size on which dwellings can be constructed. A farm may have no value to the purchaser if they cannot build their home on the property.
There are a plethora of other enquiries which can be made, however the searches will differ depending on the location and proposed use of the property.
Whilst the searches require money to be expended prior to securing the purchase, it is worthwhile outlaying some funds to ensure the property will meet all of the purchaser’s requirements.
If you are considering buying a rural property, contact the experienced team at Everingham Solomons where Helping You is Our Business.
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