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Mark Neason of Stags Professional Services discusses potential pitfalls.
The significance of allowing non-farming businesses to occupy farm buildings has recently been highlighted in the case of a family who has been assisted by Stags Professional Services. “We were first instructed to provide a probate valuation of land and buildings belonging to our client’s elderly uncle. During our valuation inspection we noticed that one of the farm buildings was occupied by an engineering business. It transpired that the recently deceased aunt had allowed (who was then) a friend to use the building for his car repair business. The family who has inherited the building from the uncle wanted to sell the property and therefore, quite reasonably, asked the ‘friend’ to leave. The mechanic decided that he wanted to stay on and refused to vacate the property. This created a difficult situation for the family and resulted in them being forced to sell the buildings at a discount because of the mechanic’s occupation.”
The legal situation is that, if a person occupies a farm building for non-agricultural business purposes, the Tenant’s occupation is likely to the covered by the Landlord and Tenant Act 1954, which can mean that the Tenant cannot be made to vacate the premises. This is the case even if there is no formal agreement
“The above situation could have easily been resolved to the satisfaction of both parties had a written agreement been put in place at the outset. The agreement would have set out and defined the intentions of the parties at the outset when all were friends and on reasonable terms with each other” adds Mr Neason. Landlords and Tenants should work out the various clauses and conditions of the agreement on the basis that the friendship may not last forever, or that the occupation of the building may outlast either of the original parties to the agreement.
For advice on any of the issues covered in this article or other points concerning tenancies and licences, please contact Stags professional Services on 01392 439046 or emailing Professional@stags.co.uk