Contractual considerations when entering into Agreement for Sale & Purchase of Farms – ‘Proper Farming’

If you are entering into contractual arrangements for the purchase of a farm, there are some important considerations you need to keep in mind.

A purchaser will always expect a vendor to continue to properly farm the property from the date of signing the agreement until the date of settlement. A proper farming clause should always be inserted into an agreement. Any agreement should set out provisions for the following:

1. …

• Is fertiliser to be applied by the vendor? If so, how much is applied, when and what type?
• Is the vendor to provide autumn-saved pasture based on areas being closed up? Is this defined by round or by kilograms of dry matter?
• Should supplements remain at the property on the settlement date?
• How are summer or autumn crops to be dealt with, and is any regrassing required?
• Is there a weed problem that requires attention prior to the settlement date?

If these provisions are set out in the agreement, this should ensure a smooth transition over the period of the sale.