Family home and a legal agreement

[hippopandamouse]

Hi!

Our house situation is a little different to most, basically my grandparents owned a farm and before they sold it they built themselves a lovely home on the land. They also gave a plot of land to each of their 3 children (all in a row!)

My partner and I ended up renting my grandparents house to help fund my Nan’s care home fees. My Nan passed away and at the end of our tenancy they wanted to sell up (all 3 children had an equal share in the house at this point)

My grandparents house has a farm tie, they looked into lifting it but their generation is unable to (I don’t understand the ins and outs of this at all)

My dad decided he didn’t want the house sold to somebody else and so he ended up buying his 2 siblings out. In order for him to do this we have bought his house from him.

His family helped a lot with sorting out all the legal side of things as dad wouldn’t have known where to start and frankly none of this would have happened without their help so I am grateful.

But there has been a legal document put in place that states that if my brother and I inherit what is now my dads house (grandparents house) and we successfully lift the farm tie and sell the house we have to give each of our cousins £30,000 each. There are 3 of them.

My question is can an agreement like this be legally made about my brother and I? Neither of us signed anything it was just my dad. I have no legal knowledge at all, I’m just curious as a lot has come to light about certain family members recently and it got me thinking.

Thanks!

Agricultural ties are complex things. Basically, the property should be for the use of people working on that land, and it sounds like in your case thats not happened. Because of the complexity, houses subject to ATs are worth less - around 30% and are difficult to sell. It is possible to have the AT removed but it takes time. Once removed, obviously the house is then much more sellable and worth more.
So your DF has bought this house at a reduced price. For example, if it was worth £250k, reduced by 30% would mean the market value would be £175k. So your DF pays his DM £175K meaning that she only has £175K to pass down when she dies. Split between all 5 grandchildren they’d each get £35K. However, if your DF passes the house down to you as he now owns it and you get the AT removed, you and your brother would now own a house worth £250K and receive £175 each plus the £35k from your grandma. You'll each have benefitted by £32.5K more than your cousins.

Thank you for your reply! My knowledge is so limited on the situation, I knew it reduced the value of the house and that’s about it haha! My dad actually used to work on the farm so perhaps that’s why he was able to buy?

I really don’t care hugely about the money, I’m more curious about what they’ve done. Is the agreement about my brother and I something that can be enforced when we didn’t sign anything on it? 🤔

Dad’s siblings made it clear they wanted their “cash injection” by selling the house but also want extra down the line if the tie is lifted. Someone made a comment about them wanting to have their cake and eat it 😂

"Is the agreement about my brother and I something that can be enforced when we didn’t sign anything on it?"

It depends. It may well be enforceable. It all depends on the exact wording.

There are things known as an "uplift clause" or an "overage clause". It may be the case that when your father bought the house from his siblings that this was included.

An overage clause in this situation would probably say something like, as you mentioned, if the agricultural tie is lifted and the house is sold then the other siblings will be entitled to a certain extra payment as specified in the clause.

This could be a percentage of any uplift, but it sounds as though a specific amount has been written into the clause? There is often also a time limit given as well, this may be 25 or 30 years for example. So if the house was sold after that time limit then the money would not have to be paid.

The clause is usually written so as to mean that any subsequent owners of the house also have to abide by this clause as well, so that would include you and your brother. It would also include anyone else that you sold the house to while it still had an agricultural tie.

So, you need to read the clause to see what it actually says to determine if it is currently enforceable.