Farmers who are looking to re-mortgage their properties are being urged not to “bury their heads in the sand” and leave vital work to the last minute.
Expert agricultural lawyer Alexandra Phillips has sounded the financial alert saying it is often a common misconception amongst farmers that because they already own the property, a re-mortgage is just a matter of simple paperwork.
“The reality is very different,” said Ms Phillips, an associate at mfg Solicitors.
“The detail and work involved in re-mortgaging a farm is very similar to the process of buying a new property and as soon as any farmer has agreed a mortgage offer with a lender, it’s time to instruct a solicitor”.
“I often see farming families getting lulled into a false sense of security just because they own a property already, underestimating the work and timescales involved and assuming that it is simply a case of signing some paperwork.”
The associate solicitor, who represents farmers and rural businesses, explained that lenders usually require a full review of the property to be carried out including conveyancing searches. Instructing your solicitor early gives them time to identify any defects or other issues that might need to be addressed before the bank will lend the money.
For example it can take anything from four to eight weeks to get the result of the local authority back. This may then reveal issues that need to be rectified. It is therefore essential to get started as soon as possible.
“The golden rule is communication,” Ms Phillips added. “If you know about a potential issue, tell your solicitor immediately. Any issues will have to be addressed eventually and the sooner your solicitor knows about them the sooner they can be dealt with. People often bury their heads in the sand hoping that their solicitor or the lender will not raise the issue. This just delays the transaction and the release of those all-important funds to the farmer. The message is very much one of preparation.”
An award-winning agricultural solicitor, Alexandra Phillips is also President of the Worcestershire Law Society.