With agricultural prices depressed again farmers are looking for means of diversification or other ways to raise additional working capital. One to consider is the lifting of an agricultural occupancy condition (AOC) applying to a farmhouse or cottage. The value of a dwelling with an AOC can in the worst case scenario be depressed by up to 33% of its market value and it can be worth considering unlocking this value. The actual devaluation due to an AOC will depend on the situation in each particular case, however usually the impact is less the closer the property is to a large town or city. Whether you want to secure additional lending, improve inheritance for future generations or prepare for a sale, you will need specialist advice from those who know how the system works. There are several ways this can be attempted, however care should always be taken as there are pitfalls that can have serious consequences.
In order to have an AOC lifted one needs to prove that the property is genuinely no longer required for an agricultural worker/farmer. Depending on the wording of the tie in question this is likely to relate to the wider locality, not just the holding to which the dwelling belongs.
Failing to comply with an AOC can result in cause a local planning authority (LPA) serving an enforcement notice, which can only be challenged through a judicial review, and a failure to comply with such a notice is an offence. This means that before attempting any removal one should consider the consequences of being unsuccessful, particularly if there is an existing breach, or you are planning to try and use the ten year rule (see below) in order to do so. If the LPA find that you are not complying with an AOC, and you have brought this to their attention by trying, and failing, to use the ten year rule, you could leave them no choice but to issue an enforcement notice. Therefore it is vital that any application is carefully considered beforehand.
There are two means of removing an AOC. The first is an application to the LPA with supporting evidence to prove that the AOC is no longer necessary. The second is through an application for a Certificate of Lawfulness of Existing Use or Development (CLEUD) following a continuous period of being in breach of the AOC for more than ten years. The second, if successful, will give immunity from enforcement action but not full permission, which can be problematic. For example if, in the future, an occupant does comply with the previous AOC, then the CLEUD can lapse and the AOC can become applicable once more. This might be particularly relevant to let property where a CLEUD has been obtained, but subsequently a retired farm worker/farmer rents the cottage, thereby ‘re-complying’ with the AOC.
When submitting evidence that an AOC is no longer necessary many LPAs have in recent years required evidence that there is no market demand for the property with the ag tie in place. This has created a situation where ag tied properties have been marketed for sale or to let in order to demonstrate a lack of demand. However demand is technically not the point at issue, the relevant matter is whether the AOC is necessary, not the demand for it. Combined with this is the Consumer Protection from Unfair Trading Regulations 2008, which make it an offence to mislead someone into thinking a property is available for sale or to let, when in fact it is not. This causes problems for obvious reasons and in recent years has required advisors to think ‘outside the box’ when providing evidence to LPAs, not least because a breach of the Consumer Protection Regulations is punishable by a fine and in serious cases can involve two years’ imprisonment.
Therefore some other things to consider when preparing evidence to support an argument that an AOC is no longer necessary might include the level of housing demand in the locality and whether this is being met, or indeed is planned for under the LPA’s local plan. Another consideration of particular note in a changing agricultural climate will be any specific changes to the nature of agriculture in the locality. For example where an area specialises in a particular system of farming and recent changes in mechanisation has meant that the local agricultural workforce has declined. For example a move to robotic dairying where there may be an argument to say that, as a result, the AOC is no longer necessary. However care should be taken with all these arguments, and more specifically in this example it is important to note that many AOCs provide accommodation for retired agricultural workers to fulfil the condition, which could be detrimental to this argument. Similarly it may assist to carry out an assessment of the current number of rural workers in the area, compared to when the condition was imposed.
This illustrates why it is best to take a considered approach to each AOC dwelling and formulate an argument specific to the situation and the exact wording of the condition. The results of taking a gung-ho approach without proper advice and submitting an application for either the removal of the AOC or a CLEUD can be serious, without proper advice.
