Residential property
02 Apr 2019 News

Sixth Code of Practice from the Tenant Farming Commissioner

The Tenant Farming Commissioner, Dr Bob McIntosh, has issued the latest in a series of Codes of Practice aimed at fostering good relationships between landlords and tenants of agricultural tenancies.  The aim of this set of principles, entitled Agreeing and Managing Agricultural Leases, is to maintain good communication and understanding between the parties in order to manage expectations throughout and specifically at the end of the tenancy.

The Tenant Farming Commissioner has identified communication and an understanding of the aims of the other party as key factors to a successful leasing arrangement. The need to keep up communication being something that is vital not only prior to entering into but also throughout a lease.  

It is recommended that a period of one month from delivery of the draft agreement should be afforded to the tenant to allow him or her to take professional advice, which the tenant is also encouraged to seek in order to fully understand the obligations placed upon him or her at commencement of the lease.

A number of the recommendations build upon existing principles for best practice, e.g. the lease and any amendments during the lease should be in writing and it is further encouraged that the parties should document prior to the commencement of the lease their expectations and aspirations for what will happen at the termination of the lease. It is recognised that often the landlord or the tenant will be unable to confirm what their aspirations are in longer term arrangements but, if that is the case, this should be noted.

The termination of a lease and manner in which this is dealt with are recognised by the Tenant Farming Commissioner as key causes of disagreements between landlords and tenants because there is more often than not both emotional and financial interests invested in the tenancy and surrounding area by the tenant.

For this reason, parties are encouraged to discuss as early as possible during a lease what is to happen upon termination and landlords are encouraged to be considerate of the factors driving a tenant’s interest to remain on the farm and also to explore possible alternative arrangements if a continuation of the lease is not possible.

The Code is aimed at fixed duration tenancies and with SLDTs, LDTs and MLDTs all having different timeframes for the service of termination notice(s) by the parties the Tenant Farming Commissioner has set out a best practice for dealing with this.

There is no statutory requirement to provide a notice to bring an SLDT to an end but the Tenant Farming Commissioner has advised that for tenancies of more then 3 years a notice period of at least 6 months should be given if the landlord intends to bring the lease to an end. For LDTs and MLDTs where a landlord must provide between 2 and 3 years initial notice the Tenant Farming Commissioner is encouraging of a mid-lease review of the parties intentions in order to allow a tenant to prepare for the possible termination of the tenancy.

As with other Codes of Practice prepared by the Tenant Farming Commissioner, recommendations within the Agricultural Leases Code are made on three levels: those where the parties must adhere to legislation, those which the parties should undertake to avoid a breach of the Code and those where adherence is recommended as best practice.

Mike Blair
Land and Rural Business

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