When dealing with ‘agricultural land’, which in broad strokes relates to all farmland, the Subdivision of Agricultural Land Act of 1970 (the “Act”) imposes certain limitations on transfer.
Section 3 of the Act provides that agricultural land may not be subdivided and no undivided share, or part thereof, in agricultural land not already held by any person, shall vest in any person, unless the Minister of Agriculture has consented in writing to the subdivision or vesting concerned. This means that farmland can only be transferred to one legal entity, without the Minister’s consent.
Where two or more persons want to purchase a farm, Ministerial consent must be obtained. Certain portions of farmland have been issued with a blanket consent in terms of the Act which covers the whole farm. In such a case, there will be no delay in transfer and the transaction will continue as normal.
However, if application must be made to the Minister, a delay can be expected.
We strongly advise our clients to contact our offices for expert guidance before entering into an agreement of sale in respect of farm land.