The Farm Tenancy Forum has published new guidance highlighting the benefits of long term Farm Business Tenancies (FBTs) for both tenants and landlords across the agricultural sector.
Farming is, by its very nature, a long term business. Decisions around investment, infrastructure, environmental improvements and farming systems are often made with decades in mind and can take many years to deliver results. Long term FBTs can play a key role in supporting this approach by providing greater stability and confidence for tenant farmers, allowing them to plan ahead and invest in their businesses. For landlords, longer agreements can offer a more settled and predictable income stream, while also supporting long term land management and environmental objectives.
For both parties, having the right tenancy structure in place is essential to long term business success. The new guidance strongly encourages early and open discussions between landlords and tenants, with the aim of reaching practical, balanced agreements that reflect the needs of both sides and help to reduce the risk of misunderstandings or disputes further down the line.
The guidance is designed to help landlords, tenants and their advisers work through the key issues involved in agreeing a long term tenancy, including (but not limited to):
- the tenant’s permitted use of the holding
- how improvements will be agreed and treated
- responsibility for repairs and maintenance
- rent review provisions
- break clauses and exit arrangements
It highlights the importance of clarity from the outset, recognising that long term certainty and security can encourage investment across the sector. The guidance also underlines the need for both landlords and tenants to seek independent professional advice before entering into, or varying, a Farm Business Tenancy.
Further details and access to the guidance are available via the websites of the National Farmers Union (NFU), Tenant Farmers Association (TFA) and Country Land and Business Association (CLA).
For anyone thinking about a new or extended FBT, it is essential to review whether existing terms actually support long term farming objectives. A clearly drafted agreement that accurately reflects agreed expectations between the landlord and the tenant can make the difference between a tenancy that simply functions and one that actively supports investment and long term success. For how we can assist you, contact Head of Agriculture and Rural Affairs, Alexandra Phillips, by emailing alexandra.phillips@mfgsolicitors.com or by calling 01905 610410.