Agrisell asked Daniël Els, Senior Associate at STBB in Somerset West, to explain some of the complexities involved in the exchange of ownership of farm land.
Agricultural land still to be subdivided:
Section 3(e) of the Subdivision of Agricultural Land Act (1970) prohibits an owner of agricultural land to alienate any portion of his/her farm that must still be subdivided, whether it is surveyed or not, as the subdivision necessitates the consent of the Minister of Agriculture, Land Reform and Rural Development. It is accordingly important to obtain the ministerial consent before the parties enter into a deed of sale, failing which such sale will be regarded as null and void.
Number of persons/entities owning agricultural land:
The Act further makes it unlawful for agricultural land to be transferred to two or more unmarried persons, two or more persons married out of community of property and two or more legal entities, unless the Minster has provided his/her written consent thereto.
Ministerial consent is however not required if agricultural land is transferred to persons married in community of property as such parties do not have separate estates. Section 3(c) of the Act states that no part of any undivided share in agricultural land shall vest in any person, if such part is not already held by any person. This means, for example, that if ministerial consent was obtained for agricultural land to be transferred to spouses married out of community of property, it would be possible for one of these spouses to transfer his/her undivided share to someone else, or for the spouses to transfer both their shares to two different persons or legal entities.
If you are considering to sell your farm, it is advisable to consult with property practitioners specialising in the sale of agricultural land who can advise on the complexities involved in the exchange of ownership of farm land and to ultimately avoid parties from being exposed to unenforceable agreements.
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