Rural Land

Often people hold the view that farms are too large to survey without incurring considerable cost and accordingly the question arises as to whether the boundary fences are located sufficiently close to the boundaries. You must try to determine whether there are any disputes with neighbours as to the proper location of boundary fences as these types of disputes tend to last for a long time because neither party is prepared to pay the cost of the survey. In any case it is wrong to assume that boundary fences are always located on the boundaries.

You must be very clear before entering into a contract for the purchase of rural land as to whether you will be obtaining the benefit of any water licence. The terms and conditions of any water licence should be considered prior to exchange of contracts by obtaining a copy. Copies of relevant water licences can be obtained from the local Department of Lands and Water Conservation. Sometimes rural properties have the benefit of a private water scheme. If so then you must peruse a copy of any agreement and the constitution of any water users group. Sometimes the ownership of a farm will involve associated ownership of shares in a private water users group or a co-operative. The shares in such entities should be transferred to you on completion of your purchase of the property. You must be clear about the amount of water allocated to you under these types of arrangements.

You should check the deposited plan of which the property forms part to determine which parts of the property if any are designated as roads. Many rural roads through properties are never constructed and their location is impossible to determine by mere visual inspection of the land. You will be required to fence your property off from the road unless you have a road closure permit. Such a permit will permit you to leave the road unfenced and to some extent treat the road as if it was part of the farm.

You must know whether a property you are purchasing includes Crown licences or Crown leases. These may not be transferable. In those cases the purchase of a farm including part Crown licenses or Crown leases may involve application to Department of Lands and Water Conservation for a new lease or licence. Special provisions must be included in the contract in these cases.

You must not assume that you will be entitled to clear the land you are purchasing. There are limits on the amount of clearing you can do in any one year. Generally approval is necessary prior to clearing. You should aim to understand the soil conservation and native vegetation issues before exchanging contracts.

Certain sections of the State are subject to mining exploration licences and some have already been mined. You should determine whether your perspective purchase is a property within a Mines Subsidence District. Native title issues may be relevant to farms consisting of land subject to Crown licences, leases and western division grazing leases.

Before proceeding to purchase rural land you must be certain that you will not be "landlocked". Farms often have the appearance of having access to public roads or having the benefit of roads through adjoining properties however actual access rights can only be determined by careful consideration of the title to the property. It may be prudent for you to view council maps to clarify the question of access to the property. You must also be sure that you can bring electricity, telephone and other services onto the land.

Correct determination of the actual area of rural lands being purchased can be extremely difficult and confusing. This is particular the case when a farm consists of a number of different lots contained in different deposited plans. It is not particular unusual for a farm to consist of partly Torrens Title, partly Old System Title, partly Leasehold and partly Crown Licence. It is often the case that the different deposited plans (or plans of subdivision) defining the property are drawn to different scales sometimes making it impossible to determine where the boundaries of the various lots within the farm meet. In addition to correctly determining the area of a farm it is also very important that you are familiar with the easements, covenants and restrictions on use applying to the property.

The transfer of some rural lands requires the consent of the Minister. This involves extra fees and can take a considerable amount of time. Appropriate contractual provisions should be included in relation to land requiring Minister's consent.

Prior to you exchanging contracts you must be clear on whether any part of the land is contaminated. Sometimes cattle and sheep dips cause contamination that can require remediation particularly if it is near a watercourse. Similarly domestic septic systems and diaries located near watercourses can cause problems. Chemical residues from sprays previously used to manage pests contaminate some properties.

If you are concerned about the building rights associated with a property you are purchasing then you should determine the minimum area necessary for building approval before exchanging contracts. If you intend to subdivide the property then you should make appropriate enquiries at the local council. Be aware that sometimes rights to build or subdivide can lapse and the value of the property and your future plans will be adversely affected. Specific checks should be done if you are intending to purchase land for dairy farming, irrigation, aqua culture or organic farming.

Rural land transfers involve particular issues in relation to GST, stamp duty and capital gains tax. Your accountant or tax adviser should be consulted prior to exchange of contracts. You must also consider the advantages and disadvantages of purchasing in your own name, or jointly with another person or persons as tenants in common or in the name of your company or trust. A consultation with your accountant or tax adviser is also essential in this regard.