Buying a property? Get your due diligence right!

By Rachael Mitchell, Senior Consultant

The original version of this article was published in Country-Wide Magazine in April 2022

Farmland due diligence has always been carried out by purchasers to varying degrees – from talking to stock agents about the quality of animals on the property, right up to full scale financial and agronomic modelling. 

But farm sales are now more complex, and the levels of due diligence need to lift to accommodate these complexities.

Legislation is complicating things. New regulations at regional and national levels are in play, a notable example being the National Environmental Standards (NES) for Freshwater Management. 

From 2nd September 2020, the NES Freshwater became law, imposing regulations across a wide range of activities, including winter grazing on crops, dairy support, dairy platform, and irrigation on dairy properties.

Even in regions experiencing little impact from the regional council, the NES for Freshwater Management now applies. In areas where regional plans are in place, any activity or land use change must comply with relevant regional plans and the NES. If two similar regulations exist, the most restrictive applies.

Know the status of the property

Under current and future legislation, what were once accepted as inalienable rights (to subdivide, winter crop, etc) are no longer guaranteed.

If you’re purchasing farmland, it is imperative to know the status of the potential property. If the vendor or agent can’t provide you with good information on the property’s 2019-20 status, you may be restricted to farming in line with the vendor’s operation, or even less intensively.

Even if the existing system can be continued, understanding compliance with the relevant regional plan and any liabilities will also be important, for things like GHG costs, nitrogen loading and annual consent to farm.

Other due diligence questions need to be asked to discern the true cost and value of the land. What are the liabilities of the property? How does your proposed system compare with the 2019-20 year?

Can you subdivide?

Are you intending to subdivide the land to offset a purchase price? If you are, know that new legislation on Highly Productive Land will create an obligation on regional councils to preserve the best land in their region as production land (Land Use Capability Class 1-3). Any plans to subdivide may meet significant roadblocks.

The Cost of Biodiversity

To complicate things further, an exposure draft of the National Policy Statement for Biodiversity is also in the pipeline for later in 2022.

After pushback from farmers around the identification and treatment of Significant Natural Areas (SNAs), amendments have been made. Even so, phrases such as ‘maintain and increase biodiversity’ are likely to remain in the documentation. 

The definition of wetlands also has purchase cost implications. If the 50m² description is still in place, properties with lots of springs could face significant fencing headaches, not to mention the weed control that is likely to be required in the stock excluded areas.

On an existing property, you must mitigate all the regulatory restrictions to make your system work. However, when purchasing a new property, you need to look beyond how great the farm looks and evaluate how you will be able to farm that land within 2 to 5, or even 10 years.

A worthwhile investment

$5,000 will get you started on basic due diligence – farm visit, researching the legislative restrictions on the property, modelling your planned future system and reporting. That may seem expensive but given the seven-figure purchase price of most farms and the possibility of unseen costs, this is a small price to pay. Far better to spend due diligence money up front than be stuck with land unfit for the purpose for your operation.

There’s another upside to getting expert help. As you go through the due diligence process with your consultant, you’ll gain insights and information that will enable you to begin evaluating future properties yourself.

The role of real estate agents

On the one hand, real estate agents are engaged by the vendor to sell their property for the best possible price. On the other, they also have an obligation to ensure potential buyers are sufficiently informed about the property to make an informed decision.

Due diligence is your personal responsibility. Better to know beforehand that your ideal property might not be so perfect, than to have bought it and then not be able to farm it as you had wished. It is your responsibility to ensure you are fully informed – as the saying goes, ‘caveat emptor’ (buyer beware).

It is not all doom and gloom

There is good buying to be had by informed purchasers. Proper due diligence will give you the surety you need to buy with confidence.

Planning for future planting, fencing or land retirement can all be incorporated into the initial budget you present to the bank. Knowing that these expenses are in the pipeline and having a plan to pay for them will help reduce stress levels when the new regulations kick in.



Lee Matheson

Tumuaki Whakahaere
Kaiwhakahaere Matua

B.Appl.Sc (Hons), FNZIPIM (Reg)

Nā tana whakapakeketanga i Pōneke i haere mai ai a Lee ki tana mahi nei. He Tāhū Paetahi Pūtaiao Otaota, ā, he mātanga hoki a Lee ki te tāhua mākete. Nā tana tūranga Pouwhakahaere e kore e kaha a Lee ki te puta ki ngā pāmu, heoi anō ki te puta atu ia ki waho, ka hākoakoa katoa ngā koko o tōna ngākau. He ahakoa kai te tari e mahi ana a Lee ināianei, kai konei tonu ia e kaha ana ki te tohutohu ki te arahi ki te tuku i ana matauranga rautaki a pāmu , ona whakaaro auaha, ana matauranga a Kāwanatanga, te mātai whakangao me te rangahau ohaoha ki ngā taringa pakiki.

A waho atu i a Perrin Ag, he tangata aroha ki te whakaako whutupōro, te mātakitaki i ana tokotoru e pakeke tupu ana me te ngaki māra tahi me tana hoa rangatira a Haidee.

"E aroha ana ahau ki te whakamana i ngā tāngata i o mātau wāhanga tuatahi me te ngahau o te kite i ngā kiritaki e tutuki ana i a rātau hiahiatanga. Mēnā ka taea e tātau te whakahauhau i nga kaiahuwhenua kia whakauru ki o rātau kiritaki, kia nui ake te whakauru hohe ki a rātau mekameka putanga me te tirotiro i a rātau umanga mā tētahi arotahi whānui ake, kātahi ka whakaaro ahau he nui ake te wā e heke mai ana a tātau mahi."

Mikaera Booth

Mātanga Hāpai

B.Com Af (FM)

Ka kawea mai e Maika he taonga o nga pūnaha hangarau me nga pūnaha miraka kau ki Perrin Ag. I muri iho i tana mākatanga ki tētahi Bachelor of AgriCommerce mai i Massey, ka tīmataria e ia tana mahi ki a DairyNZ hei āpiha kōrero i reira i whakahaere ai ia i ngā rōpū kōrero, a, ka whakahaere i te whakahaere pāmu.

I mahue i a ia a DairyNZ ki te haere i te ao, engari i roto i ētahi marama ka patua e Covid, ka kati nga taitapa, a, ka hoki mai a Maika raua ko tana wahine ko Nikita ki te kāinga. I muri i Aotearoa, ka tangohia e ia he tūranga whakahaere i nga pāmu kaupane a DairyNZ i runga i nga Hauraki Plains i mua i tana uru ki Halter.

I muri i tana whakaotinga i tana OE, ka hoki mai a ia ki te kāinga kia noho i Papamoa, a, ka uru ki te tīma Perrin Ag i te wā o Hui tanguru 2024.

"Ehara ahau i te tangata e hiahia ana ki te noho tonu, ā, e hiahia ana ahau ki te ako tonu. I kite ahau i tētahi wā me Perrin Ag. He umanga a rātau kaupapa mo te whakapai haere tonu me te akoranga. I ngā wā katoa he huarahi hōu, pai ake hoki te mahi i ngā mea, ā, me noho tātau ki te aronga o tērā mō ā mātou kiritaki."

Abbey Dowd

Kaiwhakahaere

B.Ag.Sc (Hons), MNZIPIM

I uru a Abbey ki Perrin Ag i te wā o Hui 2023 hei wāhanga o te hōtaka tono mātauranga o te umanga, o Empower.

I tipu ake a Abbey e karapotitia ana e nga pāmu miraka kau i roto i tētahi iwi tata i Waikato ki te Tonga. I kite a ia i te tuatahi me pēhea te tautoko a nga kaiahuwhenua o te rohe i tōna iwi, koia ia i whakaawe ai i a ia ki te ako i te Whare Wānanga o Lincoln.

I nga wā katoa e mīharo ana te tipu ake i roto i tētahi iwi ā-taiwhenua o Abbey i nga wā katoa e hia nga kaiahuwhenua o te rohe e āwhina ana ki te iwi. I pīrangi a ia ki te āwhina ki te whakahoki ki te umanga me te tākaro i tētahi wāhanga ki te āwhina i to mātau wāhanga tuatahi kia whakaputa tonu i te kai kounga i runga i te āhua mārō.

I te tau 2022, i pau i a Abbey te raumati hai takawaenga i runga i tētahi o nga mahi miraka tauhokohoko tuatahi a Aotearoa. Ko tana kaupapa Honours e rangahau ana i te miraka deer i te taha o ētahi atu mahi miraka tūturu ake, me te arotake i ngā āheinga whakanao o te umanga miraka.

"I te tipu ake kaore ahau i noho i runga pāmu, engari i mōhio tonu ahau e hiahia ana ahau ki te mahi i te wāhanga pāmu. I pīrangi ahau ki tētahi tūranga i reira he toenga i waenganui i te mahi me te pāmu, ā, ka taea e au te tautoko i nga kaiahuwhenua kia whiwhi ai i te pai rawa atu i a rātau umanga."

Sam Gray

Kaiwhakahaere

I tipu ake a Sam i runga i te pāmu miraka kau i te Raki Tawhiti. I muri iho i tana whiwhinga mai i te Whare Wānanga o Otago i te tau 2005 me tētahi tohu Honours i roto i te hangarau hangarau rāpoi ngota, he maha nga tau e mahi ana a ia i roto i te rangahau rongoā i Aotearoa me Pākehā. I a ia e hoki ana ki Aotearoa i te tau 2012, e whā nga wā i pau ai i a ia te pāmu miraka kau i Te Whenua o Raki i mua i tana hokonga i tētahi paraka 56 ha i Taupо, i reira ia i kitea tuatahitia ai ki te pāmu i raro i te pū hauota. I uru a Sam ki Perrin Ag i te tau 2023, ā, ka mauria mai ōna pūkenga kaha e whakatūria ana e tētahi huarahi hāngai ki te whakaoti raruraru. I waho o te mahi pāmu me te tohutohu, tērā pea ka kitea e koe e rere ana a ia i te hī ika, te whaiwhai, te papa huka rānei.

"He tokomaha nga kaiahuwhenua e rongo ana i te uaua i mua i te huringa tere o te whenua mana. E tautohe ana ahau ki te āwhina i nga kaiahuwhenua kia mārama he aha te tikanga o ēnei ture taiao mo a rātau umanga, me te tuku rongoā māia e āhei ai rātau ki te mahi tonu i ā rātou mahi tino pai, i a rātau e noho tautuku tonu ana".

Danni Armstrong

Kaiwhakahaere pūtea

Pakeketia a Danni i te pāmu kau i Atiamuri ka noho hoki mō te rima tau hai pou hāpai kūtētē kau. He ahakoa tana mahi pāmu ehara i te mea ka noho motuhake ki tēnei mahi, ka aro atu hoki ki te rīhi motukā, ki te hauora me te mahi moana. He kaha tana aronga ki ngā take whakahaere me te tiaki moni, mātua ko te manaaki me te atawhai i ngā tini manuhiri ka whakatata mai, ka rua ko te tiaki i te taha ki te ao hangarau pēnā me ngā whārangi pāpāoho ki te ao hou ko te whakahaere tuku motukā, ā, tae rawa ki ngā kaupapa ako, te whakarite rōhi -a-mahi, H&S me te whakatika hapa. I whakapiri mai a Danni ki a Ag i te marama o Mei 2021, he ahakoa he tauhou he mātanga ki tōna ao pākihi koi i tāhuri mai ia ki tēnei whānau.

He wahine pānui pukapuka me ōna ngeru, he wahine takahi whenua haere ngāhere.

“I runga i ngā tini kaupapa whakawetewete, ara ake ai ahau ia rā ia rā – kāre i tua atu i te whakamutunga o aku mahi tatau kia ea ai– e whai tūranga mana ai taku tu ngātahi me tēnei tīma”.

Duncan Walker

Tumuaki
Kaiwhakahaere Matua

B.Appl.Sc, MNZIPIM (Reg)

I te haerenga mai i tētahi papamuri pāmu maroke me te miraka kau, i nga wā katoa e hiahia ana a Duncan ki te tipu i nga umanga o te wāhanga tuatahi. Ahakoa he pāmu tawhito, he ngahere, he pūtea penapena rānei i waho o te kēti pāmu, ko te mahinga pakihi tūturu ko te hiahia o Duncan. I muri i te mākatanga mai i te Whare Wānanga o Massey me tētahi Bachelor of Applied Science i Agribusiness, ko te wā tuatahi o Duncan ki te arotau i tētahi umanga pāmu mā te mahi i tētahi tahuringa miraka kau. Na te kaupapa Duncan i whakahaere te tahuringa, a, ka haere tonu te whakahaere i te pāmu miraka kau mo te toru tau anō.

Mai i te hononga atu ki Perrin Ag i te tau 2011 ka mahi a Duncan me te whānui o ngā kiritaki tae atu ki ērā 'i waho o te kēti pāmu'. Mā tōna papamuri kaha i roto i te tātari pūtea penapena, te rautaki pakihi me te whakahaere kaupapa, kei te nui haere te mahi a Duncan me ngā kiritaki ki te tātari me te whakauru i ngā pūtea whenua me ngā pūtea rākau ki roto i ā rātou umanga pāmu.

“Ko te hāpai o ōku hoa me te arataki i a rātou me ngā kōpikopikonga huhua o te ao hou taku oranga ngakau. Kia tū rangatira ai rātou, he aha i tua atu!”

Lee Matheson

Tumuaki Whakahaere
Kaiwhakahaere Matua

B.Appl.Sc (Hons), FNZIPIM (Reg)

Nā tana whakapakeketanga i Pōneke i haere mai ai a Lee ki tana mahi nei. He Tāhū Paetahi Pūtaiao Otaota, ā, he mātanga hoki a Lee ki te tāhua mākete. Nā tana tūranga Pouwhakahaere e kore e kaha a Lee ki te puta ki ngā pāmu, heoi anō ki te puta atu ia ki waho, ka hākoakoa katoa ngā koko o tōna ngākau. He ahakoa kai te tari e mahi ana a Lee ināianei, kai konei tonu ia e kaha ana ki te tohutohu ki te arahi ki te tuku i ana matauranga rautaki a pāmu , ona whakaaro auaha, ana matauranga a Kāwanatanga, te mātai whakangao me te rangahau ohaoha ki ngā taringa pakiki.

A waho atu i a Perrin Ag, he tangata aroha ki te whakaako whutupōro, te mātakitaki i ana tokotoru e pakeke tupu ana me te ngaki māra tahi me tana hoa rangatira a Haidee.

“Kai reira kē te ihi o taku mahi, ko te whakarangatira i ngā tangata mahi tahi pēnei i a tatou me te whakaputanga o ngā apataki ki te ao marama i runga i ngā whakatutukitanga a wō rātou tumanako-ā-ngākau. Mēnā tatou e tāea ki te whakaakiaki i ngā tangata pāmū ki te hono ki wō rātou kiritaki, me te ū a ringa raupā nei ki te ara whakaputa, me te titiro whānui ki tā rātou pākihi , ka harikoa katoa ahau i te mōhiotanga he ao ki tua mō tēnei tūmomo mahi”.