Word of advice for farmers
Waikato farmers buying land this spring are being warned to make sure they know its nutrient history before any money changes hands.
Nutrient information will dictate the land use intensity of farmland under the Healthy Rivers Plan Change 1, which came into effect after been notified last year. The rules require a nitrogen reference point to be calculated using the farm management tool Overseer, which provides an estimate for how much nitrogen a farm can discharge per year.
With millions of dollars changing hands, it was critical for potential buyers to have this information, farm consultant Steve Cranston from Cranston Consulting said.
Cranston said he was concerned there was no legal requirement in the plan change’s form for land owners to hand over that information to prospective buyers. He said he had been involved with sales earlier this year where this had become an issue.
‘‘My message to farmers is that it’s basically buyer beware and make sure you secure all of the information for the [nitrogen] reference points.’’
Cranston said he had asked the Waikato Regional Council for advice if a seller refused to provide this information and was told that it was not the council’s role to get involved. It was a civil matter between the seller and buyer, said a regional council spokesman. Total Ag consultant Rob Macnab said he insisted that his clients considering buying farms obtain the required Overseer files as a condition of purchase and get sellers to sign an affidavit declaring the information was correct.
If the request was refused, buyers should withdrew their offer. Lawyers were also used because including the nitrogen reference point data as a condition of sale was not a standard clause in a typical farm sale and purchase agreement, he said. This had made farm sales he had been involved with relatively straight forward purchases, he said.
‘‘If they don’t provide that sort of data, its putting a definite impediment to the sale.’’ Not having that information could affect the farm’s value, he said. Farmers should not buy farmland unless they had this information, he said.
‘‘It’s one of the curve balls that this through out that no one saw coming. I would say the same thing to my clients, you’re not buying a farm in the WaikatoWaipa district unless this information is provided to you.’’
Real Estate Institute for New Zealand rural real estate spokesman Brian Peacocke said many agents had lacked the understanding of the plan change and its implications for farmers and the last spring and this autumn had been a learning curve for the industry. He believed agents were a lot more informed this spring and would be surprised if any sellers were deliberately withholding information about their farm. If the agent discovered a seller was withholding information about the farm’s leaching history, the agent or agency had to stop acting on behalf of the seller. Not to do so would be a breach of their rules of conduct, he said.
‘‘If a seller is going to sell and they want to get the best price, why on earth would they withhold information that would not get them the best price?’’
He said the onus was on the seller and the real estate agency for total disclosure when it came to providing information about the property. If a seller was genuine about a farm sale, they had to produce the information that a buyer was going to require under due diligence. ‘‘I deal with a lot of farmers and a lot of real estate agents and we haven’t struck any resistance to producing that information.’’