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Andrew Lawes BSc Hons. MRICS, a rural practice chartered surveyor and Head of Professional Services for Cornwall at Stags, reminds us of the significance of these important documents.
At Stags we are often called in to advise tenants and landlords about tenancy matters with recourse to refer to the farm tenancy agreement in order to advise on an appropriate course of action following a trigger point. And all too often I am surprised at how little the agreement is referred to during the normal course of operations or as a tool for business and farm or estate management planning.
The tenancy agreement will set out a number of key cyclical dates which both parties will need to prepare for. We are all aware of rent review clauses, but the agreement will also set out dates by which repairs and maintenance will need to be undertaken such as external decorations to the farmhouse for which both parties may need to budget for. The agreement will also set out requirements for compliance testing, such as gas and electrical tests, with responsibilities for both landlord and tenant. Other repairing obligations such as fences and boundaries will be set out in the agreement, the adherence to which requires regular planning of operations and careful budgeting. All too often disputes arise at the end of a tenancy when these matters are overlooked during the term of the agreement, or important issues such as tenants’ improvements or fixtures have not been adequately documented.
If the fixed term of the agreement is due to expire the agreement may set out the cropping requirements of the tenant during the final year and arrangements for the final rent payment and treatment of BPS entitlements. It is also good practice to prepare a Record of Condition immediately prior to the commencement of the tenancy but certainly not good practice to avoid reviewing the Record until the end.
If a tenant is planning to change farming practices landlord’s consent may be required, such as cultivating permanent pasture (which would have been typically recorded in the tenancy Schedules) creating new gateways in hedgerows or adaption of landlord’s buildings and early discussions are therefore essential to manage expectation. Opportunities for succession, assignment or setting up a farm business partnership may also largely be dictated by the terms of the tenancy agreement.
A great deal of time is often spent by the parties agreeing the terms of the tenancy at the outset, but all too often the agreement can then be filed away and forgotten until required to help resolve a dispute or clarify a misunderstanding, by which time the disagreement may have escalated. We strongly advise that the tenancy is kept accessible and viewed on a regular basis and before key decisions are made.
At Stags we have a great deal of experience in preparing and managing tenancy agreements, so please do not hesitate to contact our Launceston office on 01566 771808 if you would like some advice.
But in the meantime, whether you are a landlord or tenant, go and grab your tenancy and remind yourself what the agreement includes!