22 March 1996

Frustrated by FBT failings

By Tim Relf

FARM business tenancies have failed to provide the flexibility they promised for one Sussex farmer.

Chris Turton of Egypt Farm, Battle, was awaiting the arrival of the new law before restructuring his business.

Approaching retirement, he wished to let the farms 36ha (90 acres) of grassland and cattle buildings, while continuing to live in the nearby farmhouse. He also planned to continue running the 48,000-bird broiler unit, but had handed over the pigs to his son.

A neighbouring farmer was identified as a suitable tenant and drafting an agreement began. It was then that a practical problem relating to the notice period became apparent, says Mr Turton.

"We wanted to grant a continuous, rolling tenancy, which could be terminated by either the landlord or the tenant with three years notice."

Mr Turton feels that tenants need such a period of security. Time may be needed to find replacement land, and it is also important where landlord and tenant are planning joint investment.

"With security, a tenant will probably look after the land better. And, feeling secure, he can offer a slightly higher rent."

But the law dictates that a notice period of between one and two years applies to continuous, rolling tenancies. The tenant may find himself, therefore, with little more than a years security.

The only alternative Mr Turton could see was to surrender and re-grant the three-year tenancy every year. "But this is both tedious and costly," he says.

Having been prepared for an initial cost of setting up a farm business tenancy of about £500, he is alarmed at the prospect of such recurring costs.

"During the legislations consultation period, everyone was saying that a willing tenant and a willing landlord would be free to do what they liked. This point seems to have been overlooked."

He concedes that, without farm business tenancies, he would have had to let land on short-term grazing agreements, which he describes as "an appalling method of land utilisation".

"But the current law still does not allow me to do what I want with confidence and security." &#42

Frustrated by the small print: Chris Turton says landlords and tenants should be able to choose their own notice period.