Newspaper article The Journal (Newcastle, England)

Legal View

Newspaper article The Journal (Newcastle, England)

Legal View

Article excerpt

Byline: By Andrew Farquharson

Farmers are becoming increasingly aware of the potential to increase income by letting underused or disused farm outbuildings to family ( or third parties.

Where there is a commercial business use it is likely the tenancy will fall outside the farm business tenancy regime. Instead it will be within the parameters of the 1954 Landlord and Tenant Act.

Tenancies of this nature are becoming increasingly common in the rural economy where property may be let especially for office use but also for craft use or any other non-agricultural commercial purposes.

The 1954 Act business tenancy regime affords the tenant far greater protection and it is important to understand the potential problems which an ill-advised landowner may encounter.

If not excluded from the security of tenure provisions of the 1954 Act when a business tenancy comes to the end of its contractual term it will automatically continue until it is ended by either the landlord serving a notice to bring it to an end or the tenant serving a request for a new tenancy.

If the tenant applies for a new tenancy there are only very limited grounds on which the landlord can resist the application. As a result getting rid of an awkward tenant can prove difficult.

It is possible to exclude a business tenancy from the protection of the 1954 Act ( an exercise in paperwork.

In what was essentially a rubber stamping exercise three copies of an application had to be submitted to the County Court to exclude the protection and a fee for the privilege was payable.

As from June 1, the procedure has been far simpler. Prior to completing the lease a "health warning" notice must be served on the tenant in a form prescribed by statute.

The tenant must then make a declaration that this notice has been served and that he accepts the lease is to be outwith the protection of the 1954 Act.

As the new procedure is far simpler and cheaper where there is a risk of creating a business tenancy and for their own protection a landowner should always consider contracting a lease out of the Act. …

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