Buying or selling a cane farm can often be a difficult process for both parties involved. The timing of the purchase or sale when considering the cane crushing season is crucial. The emotional attachment that a Seller may have to their “family farm” may also be a tough hurdle to overcome. At Macrossan & Amiet Solicitors, we believe that with proper planning and due consideration of all items involved we are able to make the conveyance of cane farms a smooth and hassle-free process.
Part of ensuring that cane farm conveyances proceed smoothly involves accurate preparation of the Contract and any attachments. In our experience, real estate agents will request that we prepare the Contract on behalf of our clients and we find that the marketing material which the agents have prepared is particularly useful when drafting the Contract.
Once the Contract has been prepared, it is then necessary to go through the draft with our clients to ensure nothing has been left out or forgotten and to ensure that our clients are happy with the document. From here it is a matter of having the Contract signed and dated and proceeding with the conveyance towards settlement.
Important considerations when preparing Cane Farm Contract are as follows:
- Ensuring that all the land being sold is correctly described. This may include obtaining title searches of the property and if possible, plan searches or even better using Google Earth or where the property is within the Mackay Regional Council area using MIMAPS to identify the property from aerial photography.
- Ensuring that any and all encumbrances on the land are disclosed. This can include easements, covenants, road licences or sugar industry access rights are noted in the Contract.
- Ensuring all water rights, either water licences or water allocations, are correctly described and noted in the Contract. This may involve obtaining copies of any licences or allocations and ensuring that all lots the water licence attaches to are included in the Contract otherwise the licence may require amendment. For water allocations, it will be necessary for approval from Sunwater to be obtained before the allocation can be transferred to any buyer.
- Ensuring that the correct buying and selling entities are stated in the Contract. This can mean company searches and confirming with a client’s accountant in relation to ownership of plant and equipment and cane crop and cane stools.
- Ensuring that where any plant and equipment and crop and stools is included, these items are specifically listed in a schedule attached to the Contract. It is also important to ascertain whether any monies are owing on any equipment being sold as this will require dealing with financiers to obtain necessary releases of securities.
- Ensuring that where any plant and equipment and crop and stools are included in a Contract, enquiries are made with the client’s accountant in relation to whether any apportionment of the purchase price is required for these inclusions.
- Ensuring that any plant and equipment and crop and stools which are not included in the sale are specifically excluded again by way of a schedule attached to the Contract.
- Ensuring that the issue of Goods and Services Tax (GST) and Capital Gains Tax (CGT) are raised with the client’s accountant when drafting the Contract. Accountants will advise how these possible taxation issues are to be treated.
- Ensuring that requirements of the Buyer in relation to any finance applications or building and pest inspections of any farm houses are included in the Contract.
- Ensuring that the sugar mill which the Seller supplies their cane to is ascertained. This will be essential for any cane supply arrangements or forward selling obligations for each party following completion. It may also be necessary when considering whether a Seller’s shares in a mill (such as Mackay Sugar) are to be included in the deal.
- Ensuring that where a cane farm is due to settle during the “slack season” (generally between December to June) that, if required, the Buyer is allowed early possession of, and access to, the farm to prepare the land for the next crop.
- Ensuring that where a cane farm is due to settle late in the crushing season, that the Seller is entitled to access to the farm to finish cutting their crop and any cane left behind not able to be cut prior to the crushing season finishing is the property of the Buyer. Also, consideration must be had to the Seller retaining their right to receive their cane pays for the previous year’s crop.
- Ensuring that any interest a Seller may have in a cooperative or partnership relating to harvesting, haul-out or planting equipment is either included or excluded in the sale.
- Ensuring that the implications relating to Stamp Duty are fully explained to the prospective Buyer at an early opportunity to ensure they have sufficient funds available for settlement.
We believe that in adhering to these considerations and with proper attention to detail, you can be sure that the conveyance process will be as smooth as possible.
We have an experienced team of cane farm and rural conveyancing practitioners who would be more than happy to assist you and answer any esquires you may have, so please do not hesitate to contact one of our offices.
