Land agents accused of ‘laziness’ over farm tenancy agreements

Landlords and tenants are losing out because some agents are not tailoring farm business tenancy agreements to individual needs.   

Speakers, delegates and agents at the Tenant Farmers Association’s (TFA) annual conference on Tuesday (1 September) expressed frustration that the flexibility allowed for farm business tenancies (FBTs) was not being properly used.

The Agricultural Tenancies Act (ATA), which brought in FBTs 20 years ago this week, was intended to remove restrictions and allow landlords and tenants to agree terms specific to them.

See also: Farmers and landlords air views in heated tenancy debate

But many land agents and solicitors were using off-the-shelf template agreements without changing the terms to suit the situation, said a number of delegates.

Shorter term, inflexible agreements that did not allow the tenant to grow their business and therefore benefit both them and the landlord, were the result.

No link to business plans

George Dunn, chief executive of the TFA, said there was a “lazy generation of land agents” and that he had often seen terms put forward with no link to what the tenant had set out in their application or business plan and which, as a result, would not have worked.    

“Sometimes we see clauses which reserve rights to the landlord which the tenant requires for the running of his proposed business for example, sporting rights”
George Dunn, TFA

“Sometimes we see clauses which reserve rights to the landlord which the tenant requires for the running of his proposed business for example, sporting rights,” said Mr Dunn.

Greater flexibility around user clauses, which often banned activities such as diversification, subletting and types of enterprise could help both tenant and landlord, said Mr Dunn.

Nick Millard, partner at land agent Michelmore Hughes led research on the effectiveness of FBTs to meet the objectives of the ATA 1995.

He said there was existing flexibility in the legislation if there was a will to use it – but that agents had a role to play.

Agents not equipped

However, Ellie Allwood, partner at rural chartered surveyor JH Walter, said she worried that some agents lacked practical agricultural understanding when dealing with rental levels.

“As agents, it’s inherent on us to understand about farming and the economics of it,” she added.

Lack of awareness among farmers

There was also concern that farmers and landowners lacked awareness that FBT agreements could be more bespoke.

Rebecca Marshall, chartered surveyor at Rebecca Marshall Rural Surveyors, said landlords and tenants often did not know that they could agree more flexible terms, while Mr Millard said owner-occupiers taking their first tenants were the least aware about how FBTs worked.

Agreements to fit farm

Tenant farmer Greg Bliss, said FBT agreements should allow the tenant to be as successful as they could be, which would then lead to better rent for the landlord.

“Agreement needs to fit the farm, not the other way round,” he said.