When you are renting an agricultural building there are a number of important legal issues that will need to be considered.
Do I need a written agreement?
It is recommended that a written agreement (lease) is prepared when renting an agricultural building for commercial purposes. This avoids uncertainty and can be relied upon to prevent a potentially costly legal dispute arising.
Who is responsible for repairing the building?
The agreement will generally specify that the tenant will be responsible for repairing the building.
If only part of an agricultural building is being rented then the tenant will not usually be obliged to repair the floors, rooves or ceilings, or the services.
Consideration should be given to the condition of the building at the outset of the lease. To avoid disputes over repairs, arrangements may be made for a Schedule of Condition to be prepared before occupation commences.
Payments other than rent
In addition to paying rent the tenant will usually be responsible for paying utility charges. These can be paid direct or apportioned by the landlord.
Ending the agreement
The agreement will normally set out the length of the tenancy. Provision may be made for the tenant to end the agreement earlier on the condition that they continue to pay the rent.
If no term has been specified then a ‘periodic tenancy’ will arise. This means that the tenancy will run on a month-to-month basis (where rent is paid monthly) or quarter-to-quarter (if the rent is paid quarterly). The applicable notice period will be calculated on the same basis: one month where rent is paid monthly and one quarter where it’s paid quarterly.
Security of tenure
A tenant of business premises who has been in occupation for 12 months has a legal right to a new lease when their old one comes to an end. However, because many landlords require flexibility they are able to formally exclude this right. If the right is not excluded then a landlord will only be able to recover possession in very limited circumstances. Specialist legal advice should always be taken in relation to security of tenure and contracting out.
For expert guidance on renting an agricultural building for commercial purposes contact solicitor Nick Arthur on 0808 138 1606 or emailing [email protected]