News

13 Aug 2018

Watch out for misleading farm tenancy terms

Tenant farmers are warned to look carefully at clauses within new Farm Business Tenancies as a rise in agreements not fit for purpose are reported.

Speaking on the issues, Philip Meade from Davis Meade Property Consultants said, “We are seeing a rise in the number of FBT agreements containing clauses which either provide the landlord with unreasonable rights or provide the tenant with significant liabilities.

“One such clause which we have seen recently is the ability for a landlord to recover legal costs from a tenant for merely contemplating bringing an action against the tenant.

“It’s therefore essential that tenants seeking to take on additional land go through their agreements with a fine tooth comb in order to weed out clauses which might cause a problem in the future.”

He explains that it is becoming commonplace for landlords’ agents to use standardised agreements when drawing up new farm business tenancies, rather than putting together agreements which best fit the circumstances of the relationship envisaged between the landlord and tenant.

“The is both lazy and dangerous. Any additional cost incurred at the beginning of an agreement to ensure that it is drafted on a bespoke basis for the circumstances of each case would be dwarfed by the potential expenses incurred in trying to unpick matters at a later stage when it was found that the agreement was not fit for purpose,” said Mr Dunn.

“Taking the time to check through the terms of tenancy agreements is vital. Tenants need to be assured that their tenancy agreements fit with their plans, match their aspirations and protect their investments,” said Mr Meade.

Adding to this, Tenant Farmers Association Chief Executive, George Dunn said, “We often have cases where tenants are surprised by the impact of certain clauses within their tenancy agreements once they have signed them. At that point, it is too late to do much about it. It is vital that tenants seek advice about the terms of their agreements before they are signed.”

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