NEWS

Farm Business Tenancy agreements – check the wording carefully

Published June 25th, 2013

Farm Business tenancies – check the wording carefully

Farmers looking to sign new Farm Business Tenancy (FBT) agreements are being urged to read the documents carefully or they could sign themselves up for something more onerous than they think.

The warning comes from Sarah Reece, associate of Berrys at Shrewsbury, who says the small print could be hiding a costly clause.

“Do you actually know what is in your tenancy agreement?” she asked.

“Whether you are tendering for a farm, signing a new FBT or renewing an existing agreement you must read the documentation carefully and take professional advice before signing.”

Landlords may reword conditions that could mean extra responsibility and costs for the tenant.

“For example, in the schedules ‘Keep in repair’ could mean that you have to put something back into good repair as well as to keep it in good repair,” she said. “Always think what it means in relation to the particular holding. Also, ‘Fair wear and tear’ what does that actually mean?”

It is also important to consider any timings included in an agreement. In some instances a timescale may be attached to a forfeiture clause, whereby a landlord may seek possession following a breach of a particular clause within an agreement.

“It is important to ask whether the timescales set out are firstly necessary and secondly reasonable. In most regards, an FBT can be freely drafted so it is important to consider carefully the terms of the agreement.

“Are your insurance obligations what you expect them to be? You should really show the tenancy agreement to your insurer or you could find yourself facing a higher than expected insurance bill or not being covered in event of a claim,” she said.

In the case of repairing obligations, landlords will generally put as much responsibility on the tenant as they can.

“If you are tendering for a new holding you must make sure the tenancy agreement is available to see before you make your application. It is best to know what you are being asked to sign up for right from the outset,” she added.

For further advice on tenancy matters contact Sarah Reece at Berrys on 01743 267068 or email sarah.reece@berrys.uk.com