Acting quickly is crucial in tenant farmers' claims
Tenant farmers with Farm Business Tenancy agreements should ensure that they have the correct consents in place for improvements prior to the tenancy coming to an end.
If the correct written consents have not been obtained, tenant farmers could face the prospect of not being able to make a claim.
Under written or oral FBTs, tenants need to obtain written consent from their landlord to be able to claim for improvements such as erecting new buildings, creating tracks or concreting yards if they wish to be able to make a claim for these items when the tenancy comes to an end.
If written consent is not obtained these items would be classed as tenant’s fixtures. A landlord is not obliged to pay compensation for tenant’s fixtures if he does not wish to and therefore the tenant must either remove his fixtures prior to the termination date and reinstate the land, or alternatively risk the items reverting to the ownership of the landlord free of charge if the items are left on the holding after the termination date.
Tenant farmers with an FBT must also ensure they obtain written consent from their landlords for routine improvements if they wish to include these items within their end of tenancy claim.
Most written tenancy agreements will give consent within them for routine improvements so further written consent will probably not be needed, but tenants should check to be sure.
With oral FBTs, however, as there is nothing in writing then a tenant with an oral agreement will need written consent for routine improvements.
Routine improvement includes, for example, lime and compound fertiliser applied over recent years, re-seeding, growing arable crops, and so on.
Unlike other improvement items, tenants can serve a notice on their landlord asking for consent to the routine improvement after the works have been carried out.
If the landlord refuses to grant consent, the tenant can, within two months from the date of the refusal, apply for an arbitrator. If the landlord ignores the request, the tenant has four months from giving the notice to apply for an arbitrator.
The items that constitute routine improvements can often add up to substantial financial sums and therefore it is imperative that tenant farmers understand what consents they need to have in place in order to claim end of tenancy compensation.
End of tenancy claim matters involve crucial time limits to serve notices and submit claims, therefore if you have any concerns with regards to your FBT agreement, whether it be written or oral please contact your agent or a member of our team for further advice.
Kathryn Williams is at the Oswestry office of Davis Meade property consultants
