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Time to check tenancy agreements

Farming | Published:

Tenant farmers in Wales should be aware of changes to the rules regarding model clauses which cover the maintenance, repairs and insurance of fixed equipment such as houses and farm buildings, and so on.

Eifion Bibby, Davis Meade Property Consultants

The changes will be enforced from November 1 with the proviso, if required, for either the landlord or tenant to apply for arbitration within one month of November 1 – that is, if the new model clauses change the obligations between the parties, by moving a liability from landlord to tenant or vice versa.

The Agriculture (Model Clauses for Fixed Equipment) (Wales) Regulations 2019 affect tenancies in Wales, principally under the Agricultural Holdings Act 1986 and certain Farm Business Tenancies, broadly bringing them into line with the 2015 changes made in England.

Tenancy agreements under consideration now will have to make allowance for the new rules and any rent reviews should take into account these new model clauses if relevant.

The new model clauses add new liabilities for fixed equipment commonly used and give more details about existing liabilities and their division between landlord and tenant.

For example, the landlord’s list of obligations has repair and replacement of electrical supply system added while the tenant has a maintenance obligation for slurry, silage and effluent systems and also any fixed equipment generating heat or power.

There is a difference between England and Wales clauses in the tenant’s obligations for maintaining slurry systems and reed beds. In Wales, there is not an obligation on the tenant to keep them in “good working order.” Instead paragraph 11 states that the tenant must keep clear reed beds for water and sewage treatment and keep clean and free of blockage all slurry systems.

The Welsh regulations expressly refer to fitted kitchens as “fixtures and fittings” which the tenant must repair and leave clean and in good tenantable repair, order and condition. Fitted kitchens are not mentioned in the English regulations which simply refer to “fixtures and fittings”.

There is provision for parties to consider the terms of their agreement where they differ from the model clauses and if necessary bring in a third party or arbitrator to determine those terms so that a rent adjustment can be made.

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A point to consider with existing tenancy agreements is whether or not the agreement allows for amendments to the model clauses. If the agreement just refers to the old model clauses without stating, for example, “as amended,” then the chances are that these new provisions will not apply.

We are advising tenants to check their tenancy agreements carefully and to take professional advice should there be any concern.

Eifion Bibby, Davis Meade Property Consultants

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