Business clinic: Tenants obligations on repairs

Farmers Weekly’s business expert Peter Cusick explains repairing obligations in tenancy agreements.

Q: I am a tenant on a pre-1968 Agricultural Holdings Act (AHA) tenancy on 500 acres. It is a full repairing and insuring agreement. The grainstore has an asbestos roof that is more than 60 years old and needs renewing at a cost of £15,000-plus. I believe that is not a repair because of its age. Am I correct? 

A: The starting point is the need to fully understand the repairing obligations in the written tenancy agreement. A full repairing and insuring AHA tenancy stipulates that the tenant has full responsibility for the repair of the holding, including the buildings. This would include replacement of the roof, but as that is quite burdensome, it should be reflected in the rent.

Peter Cusick
Head of agriculture and food
Thrings Solicitors

However, AHA tenancies often incorporate the so-called “model clauses”, which set out the landlord’s and tenant’s respective repairing and insurance obligations.

Under the model clauses, the landlord would be responsible for the grainstore roof, whereas under a full repairing lease, the responsibility would ordinarily fall on the tenant.

Full repairing and insuring leases can be qualified by a schedule of condition. In such cases, the tenant is only required to keep the property up to the standard evidenced by the schedule. Similarly some repairing obligations specifically exclude fair wear and tear.

See also: Farm tenancy documents – the essentials

It must also be considered whether or not any repair is in effect also an “improvement”, since the latter can potentially qualify for compensation under the AHA in certain circumstances. 

It is possible under the AHA to seek a variation of the tenancy via arbitration to bring it in line with the model clauses.

In such a situation the variation could trigger a rent increase as well as other financial ramifications for the tenant. This is a rarely used statutory provision even for tenants with full repairing and insuring tenancies who may otherwise wish to benefit from less onerous repairing obligations.

This is a specialist area of law and careful consideration will need to be given as to the precise wording of the repairing obligations.

Failure to comply with the them could lead a tenant being vulnerable to the service of a notice to remedy by the landlord, which in turn could result in service of a notice to quit, if the tenant does not comply with the notice to remedy.  

I also note that the roof in question is made of asbestos. The nature of the asbestos involved will dictate how it can be safely removed and disposed of. Further specialist advice on this particular aspect should be sought. 

Finally, the model clauses are currently under review with a view to being brought up to date and some existing provisions clarified. The last changes were made in 1988. It is hoped the updated clauses will come into force before the general election this year, however that is by no means guaranteed. 

The information provided in these articles does not constitute definitive professional advice and is provided for general information purposes only.

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