Land Eligibility & Transfers for Land Sales after 15th May 2018
Something that Rostons have been asked by allied professionals in the past is the position over is the transfer of land whether this is by sale or lease to other occupiers after the BPS deadline of the 15th May 2018.
This is a key topic which requires more understanding, particularly for any sale contracts that are being drafted for Vendors who have sold land that will complete after this deadline.
Land must be eligible for the Basic Payment Scheme for a full calendar year (i.e. up to the 31st December) it is not simply just based on occupation as at the 15th May.
There are also further complications for land that may have been opted for greening and cross compliance rules all of which must also be met up until the end of their particular deadline.
Parties therefore need to be clear about their responsibilities and protect their positions. If a new occupier of land does not meet the requirements, payment reductions and penalties may be applied on the Vendor/Transferor who included the land on his BPS application.
So, who is responsible for meeting the rules if land is transferred?
Scenario 1 – Any BPS claimant must ensure that after the transfer cross compliance rules are met for the rest of the year, even if they did not declare it on their RPA application.
Scenario 2 – Where the purchaser is not an RPA claimant: after the transfer, you as the Vendor/Transferor are still responsible for making sure the cross compliance rules are met.
Therefore, if a new occupier was not a BPS claimant that year and breaches cross compliance rules or any of the greening requirements, this would result in a penalty for a breach in the rules applied to the vendor even if the breach was out of their control and caused by the new occupier.
The sales contract therefore should clearly state that the penalty will be able to be reclaimed from the purchaser.