News Ground
Judge blocks land speculation
If it is up to the courts, speculative trade in agricultural land should be curbed. That decision was made on August 14 by the Noord-Holland District Court. The practice of cutting up plots of agricultural land into hundreds of pieces – which are then offered as an attractive investment to private individuals – has grown considerably in recent years. In practice it turns out that this so-called 'warm ground' feels icy cold.
The above phenomenon is certainly not new, but at the beginning of this year it again received a lot of attention. The Kadaster and journalists from RTL Nieuws investigated how many plots are involved and what amounts are involved. The study found that 10 plots of agricultural land have been purchased in the last 700 years and then divided into 17.000 plots. Those pieces, from a few hundred to thousands of square meters, are then offered as an investment.
No hot ground
The judge explains in his recent pronunciation a bomb under this method, so headline RTL News. One of the buyers of agricultural land – a private individual – took the company Grondzaken Nederland BV from Hoofddorp to court. When it turned out that the supposedly warm soil would not undergo any change of use at all, the land buyer refused to pay. He feels misled and pressured. The seller is of the opinion that the purchase agreement must be fulfilled. The judge does not agree with that. According to him, there are too many doubts about the legal validity of the purchase agreement.
The judge rules that the seller has failed to fulfill his duty of care and that buying land in this way is nothing more than a very expensive ticket in a lottery. The purchasing process only focuses on the potential increase in the value of the land, for example when it is used for construction purposes. In practice, this almost never happens.
Supervision
RTL also reports that the court is of the opinion that such speculative investments should come under AFM supervision. This is not reflected in the statement. Reference is made to one Letter to Parliament of July this year on the subject. Consultations were also held with the AFM and ACM. Because buyers are now responsible for managing the land themselves, the land purchase does not fall under the Financial Supervision Act (Wtf). According to the court, mere mowing of grass or leasing is not in accordance with the purport of the Wtf. He calls it socially difficult to accept from the point of view of consumer protection.
Lawyers who have been assisting buyers for some time say they are very happy with the ruling. The expectation is that this will put a stop to these dubious practices. Boerenbusiness searched earlier what impact it has on the agricultural sector. There are advantages and disadvantages for a farmer who leases the pieces of land. There are more owners to deal with, and administrative costs are higher. On the other hand, there is often a considerably lower lease price. During the research of the article it also became clear that the lease does not always go according to agreement. For example, when a non-agreed crop is grown or when a piece of land is still used without a rental or lease agreement.
Effects
A follow-up to this lawsuit is proceedings on the merits to further explore this individual case. With this ruling, there is a good chance that more investors will try to undo their land purchase. The judge also mentions that the directors of Grondzaken Nederland were previously active within another company, which had exactly the same business model, in which impressionable buyers are put under pressure to make a purchase. That is a heavy burden on the defendants.
Niels van der Boom
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