Why Written Farm Agreements Are Now Essential
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With new legal obligations reshaping rural lettings, farmers must move from handshake deals to clear written agreements to protect their land, tenancies and livelihoods.
The farming community is generally one in which there is a tremendous amount of trust, with people living and working in rural situations often enjoying a great deal of empathy and commonality with those with whom they interact.
This is one of the reasons that traditionally many agreements have been verbal and unwritten, whether for residential arrangements, or the use of land and buildings. Mutual respect and simplicity have been the driving force.
These kinds of ‘handshake’ arrangements may have worked well for many years, but in an era of increasing regulation, sadly it is becoming ever-more vital to ensure that appropriate documents are on file, providing the clarity for both parties and ensuring that both sides are aware of their responsibilities and obligations.
One of the biggest drivers towards getting written agreements in place has been the advent of the Renters’ Rights Act, which came into effect on 1st May. Not only does this bring in specific responsibilities on landlords (including rural landlords), such as providing a written tenancy agreement, but there are real consequences if this doesn’t happen, including fines and even potentially forfeiting the right to take back possession of your property.
This applies even where a house on the farm is let to another member of the family. Landlords must provide all tenants with a copy of the government information sheet by 31st May or risk a £7,000 fine – and also a written statement of tenancy terms if there is no written agreement.
As my colleague Simon Evans outlined in these pages last month, the RRA imposes lots of other responsibilities on landlords, many of which require a proper paper trail. In due course, all landlords will have to register for the Private Rented Sector Database giving their details, property address and provide certain safety information.
It’s not just residential buildings where farmers should be getting their paperwork in order. Farm buildings may need an Asbestos Management Survey, certificates for electric, and if the building is heated certificates for annual boiler checks – not to mention fire safety certificates and an EPC.
For a sector used to doing such things by way of verbal agreements, this may seem like a mountain of paperwork; others will argue that in the 21st century, such things should indeed be regularised and recorded.
Either way, just like the washing up, don’t leave the ‘housekeeping’ for another day, ensure you have the records and written agreements on file. It might be a pain, but in the end it’s much less painful than dealing with the consequences of falling foul of the regulations or a potential dispute with the occupier.
Tom Corfield is agricultural partner at Arnolds Keys – Irelands Agricultural.
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