Buy farmland from a receiver

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I am interested in buying farmland to expand my farming business. It is sold by a receiver. It’s not a local lot for me but it would be useful if I got it at a reasonable price. I’m afraid to buy from a receiver? Would I get a good title out of it? It is sold through a reputable auction site.

Dear reader,

The commercial reality is that the buyer in a case like this is usually buying a distressed asset when buying from an escrow which is often sold at a competitive price and can represent “a bargain”. However, in acquiring it, a buyer must assume certain risks and perform some of the due diligence that might otherwise fall to the receiver of the property.

Receivers are usually appointed by a bank under a bank mortgage. Once appointed, the receiver takes possession of the property and the property is disposed of by way of sale. Although appointed by the bank, the receiver acts as the borrower’s agent. The bank will have incurred a loss on the property and will want to dispose of it as soon as possible to minimize that loss and the bank will want to sell the property as is and will not want to incur any expense if it can avoid it. The receiver has a duty to obtain the best possible price.

As the property is advertised on an auction website, they usually upload legal documents and you can upload the contract and title documents. It is imperative that you have a lawyer review the contract and title documents before bidding on the property.

Normally, the contract will limit your rights to make standard requests and will not deal with title requests that sellers normally have to respond to. Escrow contracts contain pages of specific conditions that are not found in a standard contract.

The purpose of these special terms is to exclude many of the warranties and representations that a buyer would typically expect when purchasing a property from a private seller. It is also imperative that you have an engineer check the map that accompanies the sales contract.

In escrow sales, escrow agreements do not provide any guarantees as to limits. Indeed, he has no personal knowledge of the property and only acts as the borrower’s agent.

If there are buildings on the property, your engineer should check the planning status of the land and the various buildings, i.e. they are exempt; where did they build before the town planning laws came into force? ; or is there planning permission in place for this and are certificates of compliance provided with the contract?

Appeal to property. Make sure it is vacant and there is no litter on the property, there are no animals on the property and there does not appear to be any evidence of a tenant or a squatter in place. Sometimes it helps to call the neighbors or see what the lay of the land is locally relative to the property.

You will be asked to pay an initial deposit in order to bid normally, then you will be asked to pay the balance deposit if you are successful in the auction and normally the sale closes 2-4 weeks after signing the contract of sale. Once the nature and extent of the risk you are assuming is understood, you and your advisors, through due diligence, can assess the risks and make an informed decision.

Karen Walsh, from a farming background, is a practicing solicitor at Walsh & Partners, Solicitors, 17, South Mall, Cork (021-4270200), and author of Farming and the Law. Walsh & Partners also specializes in personal injury claims, conveyancing, estates and family law.

  • Email: [email protected]
  • The Web: www.walshandpartners.ie
  • While every precaution is taken to ensure the accuracy of the information in this article, attorney Karen Walsh accepts no responsibility for errors or omissions, however caused, and you should seek legal advice. regarding your particular situation as soon as possible.
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