Selling a property with existing leases or uses

A rural property may, at the time it is put up for sale, have some kind of active use by a third party: an agricultural lease in force, grazing rights ceded to another livestock farmer, a right of way recognised for a neighbour, or any other arrangement allowing someone other than the owner to use all or part of the property. Selling under these circumstances is not a problem in itself, but it does require informing any interested buyer clearly and in advance, because it directly and practically shapes what they will be able to do with the property from the very first day after completing the purchase.

Situations like this are more common than many owners imagine, especially on inherited properties or properties that have gone a long time without direct management by the owner. It is not unusual for an heir to discover, while preparing to sell, that a verbal lease has existed for years, or that some informal use was consented to but never put in writing, and that it now affects the sale. In many cases, even the owner themselves is not entirely clear on the exact scope of that use until they start gathering the documentation needed to sell, which makes it all the more advisable to spend time on this review before advertising the property publicly.

This guide explains, in general terms, what this kind of situation means for the buyer and the seller, and what information is worth gathering before advertising the property. It does not go into the specific deadlines or legal conditions of rural lease legislation, because these vary depending on the type of contract, its age, and the regulations applicable in each case, and determining them accurately always requires specific legal advice.

A buyer who discovers on their own the existence of a lease or third-party use after having already made progress in negotiations, or even after signing, can rightly feel that they were not given all the relevant information about what they were buying. This not only puts the specific deal at risk, but can also create legal consequences for the seller if it is shown that they withheld known and relevant information from the buying decision.

Disclosing from the listing, or at least from the first serious conversations, that the property has an existing use ensures that only buyers who understand that circumstance and consciously weigh it up reach the negotiation stage — whether because they are interested in keeping that use, because they want to negotiate its end, or simply because they would rather look for another property without that condition.

Having this information clear from the outset also helps the seller themselves understand their property's situation better before setting expectations on price or time to sell, since an existing use can significantly influence both, depending on the type of lease or arrangement involved.

Before publishing the listing, it is worth gathering all available documentation relating to the existing use: the lease agreement, if there is one in writing, any relevant correspondence with the person using the property, and whatever information is available on how long that use has been in place and under what conditions it has operated so far, even if a document was never formalised.

If the lease or use is verbal, with no written contract, it is still worth documenting in writing what is known — who is using the property, since when, under what known conditions — and passing that information on to a professional to assess the actual legal situation, rather than simply assuming that the absence of a written contract means there are no protected rights for the person using the property.

It is also worth talking to the person who has the existing use before publishing the listing, provided the relationship allows for it, to understand their situation and their expectations regarding the sale. In some cases, that same person may be interested in buying the property or in negotiating an amicable end to the use, which can considerably simplify the process that follows.

An informed buyer will want to know, at a minimum, who has the use of the property, since when, under what conditions, and whether there is any document governing it. They will also want to understand what implications that use has for their own plans: whether they can continue receiving the agreed rent or consideration, whether they can negotiate directly with the person using the property, or whether they need to wait until the existing use ends completely before being able to make free use of the property.

It is common for a buyer to want their own legal advice before moving forward with a deal of this kind, precisely because the implications of an existing lease or use depend on technical aspects that a professional they trust should review, rather than relying solely on the information passed on directly by the seller.

In some specific cases, the existence of an active use can even be attractive to certain buyers — for example, those actively looking for a property that already generates some kind of income from the earliest possible moment — while for other buyers it can be a decisive factor for ruling out the deal altogether. That is why it is worth treating this information as just one more objective fact in the listing, without presenting it in advance as either a problem or an obvious advantage, and letting each buyer assess it according to their own goals for the property.

The regulations governing rural leases and other uses on properties have technical particularities — duration, renewal conditions, the rights of the person using the property against the new owner — that vary depending on the type of contract, its starting date, and other specific factors in each case. This guide cannot, and does not attempt to, set generic legal deadlines or conditions, because any figure or deadline offered in general terms could fail to apply correctly to a particular situation and lead to mistaken expectations.

For this reason, before advertising a property with an existing use, or at least before closing any sale, it is highly advisable to consult a lawyer or manager specialised in this type of situation. A professional can explain precisely what rights the person using the property has, what obligations the sale transfers to the new owner, and how best to reflect this situation in the sale contract.

Getting this advice from the outset, and not only when a specific doubt arises during negotiation, usually avoids surprises and speeds up the process, because it allows the situation to be explained to the buyer with confidence and with clear answers to the questions they can be expected to raise about this aspect of the property. The cost of this professional consultation is usually reasonable compared with the risk of closing a deal on an uncertain legal basis, or having to renegotiate terms at the last minute when the buyer finds out on their own about some detail the seller had not clarified.

The listing itself does not need to detail every single condition of the existing use, but it should clearly mention that the property has an active lease or use, indicating that more information will be provided to serious interested parties who request it. Completely hiding this circumstance from the listing, even if it is explained later during the visit, can give the impression that an attempt was made to play down its importance.

During negotiation, it is worth being transparent about what is known and what is not known for certain about the legal situation of the existing use, avoiding categorical statements about deadlines or rights that have not been confirmed by a professional. It is preferable to calmly say that a lawyer is being consulted before confirming a specific point than to give an imprecise answer that later turns out to be incorrect and creates distrust.

Finally, it is worth clearly reflecting this situation in the sale contract, with the help of the notary and both parties' advisors, so that it is expressly recorded that the buyer knows and accepts the existence of the active use at the time of signing, thereby avoiding future claims based on ignorance of this circumstance. This same care should also be applied to the private or earnest-money contract usually signed before the public deed, including a clear reference to the situation of the existing use from that first document onward.

The most common case is an agricultural lease, in which a third party farms the property in exchange for rent agreed with the owner, with or without a written contract. Also common is the assignment of grazing rights, in which a livestock farmer uses the property for their animals during certain times of the year, sometimes on a more informal basis than a conventional agricultural lease, but equally relevant for any buyer wanting to know the property's real state before deciding.

Another common case is a right of way recognised for a neighbour or an adjoining property that needs to cross the property to access theirs. Easements of this kind, when formalised, usually appear in the land registry, but they can also exist de facto, through many years of custom, without ever having been formally registered, which requires carefully checking both the registry documentation and the actual situation on the ground.

There may also be cases involving hunting rights assigned to a hunting reserve, or third-party installations present on the property — a power line, an antenna, a water pipeline — that involve some kind of use right recognised in favour of another person or entity. Each of these cases has different implications, and it is worth identifying all of them before advertising the property, rather than discovering them one by one as interested buyers ask about them.

Accurately identifying what type of use is involved is an important first step, because each is governed by different regulations and criteria, and because the level of legal protection the person enjoying that use has against a change of owner can vary considerably from one case to another.

On properties inherited or passed down within the same family, it is common for the use of the property to be held by a family member — a sibling, a cousin, a former family tenant farmer — without any formal contract, simply because that is how it has always been done by custom. This situation can complicate the sale if it is not addressed in advance, precisely because family relationships and the lack of formalisation make it hard to separate personal affection from the legal reality of the situation.

In these cases it is usually advisable to speak openly with the person involved before advertising the property, explaining the intention to sell and seeking an agreement on how their situation will be handled with the new owner, whether that means continuing the use, ending it by mutual agreement, or the person being interested in buying the property themselves.

Even where there is a relationship of trust, it is still advisable to get professional advice to formalise any agreement reached, so that there is a clear record of the situation for both seller and buyer, avoiding future misunderstandings based on verbal agreements that, over time, each party may recall differently. Formalising the agreement does not have to damage the family relationship; on the contrary, it usually prevents later tensions that arise precisely from a lack of clarity about what was agreed.

An existing use can influence both the price and the time a property takes to sell, though in different directions depending on the specific case. For some buyers, an active use reduces the property's appeal because it limits its immediate availability; for others, especially investors looking for a return from the very first moment, it can be exactly what they are looking for. This difference in perspective means it cannot be stated in general terms whether an existing use raises or lowers a property's value: it depends on the buyer profile the listing is aimed at.

What does tend to happen is that the pool of potential buyers shrinks when there is an active use, simply because not every interested party is willing to take on that circumstance. This can extend the time to sell compared with a similar property with no existing use, and it is worth bearing in mind when setting realistic expectations about how long the process may take.

That is why, when valuing the property (see the guide on how to value a rural property without an automated appraisal), it is worth taking this circumstance into account as one more factor in the comparison with similar properties, looking as far as possible for comparables that also have some kind of existing use, rather than comparing directly with properties completely free of any such condition. Setting price and timeline expectations without taking this particularity into account tends to lead to avoidable disappointments during the sale process, both regarding how long it may take for a suitable buyer to appear and regarding the price range that buyer is willing to accept.