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Farm tenancy issues with a time limit

Earlier this year the Government passed the Deregulation Act 2015 which amongst other matters changed certain aspects relating to agricultural tenancies. In particular changes were made to the “Model Clauses”. These provide a statutory default position for certain key tenancy matters as follows:

  • Default terms for which the landlord or the tenant is liable in respect of specific works of repair, replacement, maintenance or insurance of many items of fixed equipment on a farm, including dwellings and many buildings.
  • Means to enforce those liabilities and recover costs when one party ultimately undertakes work that should have been done by the other.
  • The new “Model Clauses”are to applied from 1st October 2015 and there are additions to and changes to, the liability a landlord or a tenant may have. One significant change, which may not be immediately apparent to the busy practical farmer, is that, in the future if there is a dispute between the parties as to the effect of the Model Clauses, then either or both of the parties can have these matters decided by an independent expert rather than by a full blown arbitration.
  • However, what all tenants and the landlords must be aware of is, where these new Model Clauses, transfer a liability between the parties, then a time limit applies as follows:
  • The landlord has only the month of October 2015 in which to refer to arbitration any claim he may have for compensation arising by reason of any failure by the tenant to carry out and fulfil his previous obligations.
  • The tenant also has the month of October 2015 to refer to arbitration any claim that he might have under the old clauses for the landlord’s failure to fulfil his obligation under the old Model Clauses.

If you have doubts or questions about these new Model Clauses or whether or not you are affected by or are entitled to compensation consult Lambert & Foster now.
As at the 1st October 2015 there are also changes to the compensation regime at the end of a tenancy. These changes aim to allow compensation which better reflects the value of the improvement as at the time the tenancy is terminated.