Lady Day is a key date for tenants and landlords
March 25, also known as Lady Day, is the first of our traditional quarter days, so called after ‘Our Lady’, the Virgin Mary, and commemorates the Archangel Gabriel’s announcement that she would give birth to Jesus nine months hence.
History lesson over, as it’s far too early in the year to be having thoughts of Christmas already!
In the farming world, Lady Day remains a traditional tenancy start date and anniversary, which may prompt either the landlord or tenant to seek a rent review or to terminate the tenancy. This would usually involve the service of a notice from one party to the other, advising of their intentions.
Under tenancy legislation, the timing, format and service of notices can be critical in their effectiveness.
The standard notice has at least 12 months before it takes effect, therefore an incorrectly served notice could cause substantial delays in implementing a revised rent, the landlord regaining possession, or extending the tenant’s obligation to pay rent if vacating.
Revised rents can usually be agreed between the parties at any time. However only the prescribed procedure can force a rent review. This may be calculated by a specific formula within the agreement itself or set out in the relevant legislation under which the agreement was formed, whether there is a written agreement or not.
Many factors are required to be taken into consideration, or disregarded, and it is often not simply a case of looking at the current agricultural rental market.
Once served by one party, a notice can be relied upon by the other, so, it is important take a moment to look at the terms of your agreement, consider the agricultural climate and where the rental market may be going in the next 12 months to assess whether it would be favourable to review the rent this time next year or not.
With Brexit on the horizon and still so uncertain, it is going to take a brave landlord to serve notice this March unless they have made their own investments or have permitted diversification!
We would always advise those looking to take new land on, or rent it out, to have a formal written agreement in place.
This avoids ambiguity and provides a clear reference point for both parties, setting out who is responsible for what repairs and maintenance, what should happen if the landlord wants to undertake works or take some land back for development, or if the tenant wants to put up a new shed.
If in doubt, ask your agent!
Melanie Holt , Moule & Co, rural chartered surveyor, agricultural valuer & planning consultant
