Chief executive of the Tenant Farmers Association says new entrants to tenancy should always seek legal advice on leases.
This was the message from George Dunn, chief executive of the Tenant Farmers Association, ahead of the Business of Farming Conference at Sixways Stadium, Worcester, on November 4 and 5.
New tenancies are let as farm business tenancies usually for a fixed term with no guarantee of a further lease. Mr Dunn said for this reason new entrants to farm tenancy should ‘get advice on the legalities’ of tenancies.
He highlighted how competition in the marketplace meant there were many landlords who would often look for the highest rent over the shortest number of years, making it difficult for new tenants.
He said: “As a new entrant it is highly unlikely you will be able to compete with such individuals.
“Other landlords are looking for a long-term relationship and are willing to assist new entrants. Understanding what drives the landlord will be important to avoid wasting your time and energy.”
Mr Dunn, who is one of the speakers at Farmers Guardian’s Business of Farming event, also stressed the importance of preparing a business plan and a budget.
“It is important to take ownership of your business plan and budgets. Present the information in a clear and logical way because your figures will have to stand scrutiny and questioning,” he said.
“While it is recognised they will be no more than best guesses, they will reflect your approach and judgement. Your business plan should also address what you see as your future beyond the initial term being offered by the landlord.”
Christopher Nicholson, chairman of the Scottish Tenant Farmers Association, also offered advice. He said new entrants should look at the fixed equipment available at prospective sites.
“Check the fixed equipment is suitable. You probably do not want to be investing your limited capital in fixed equipment if the lease is for less than 15 years,” he said.
“Check the lease term will allow you to apply for any grants you may wish to receive. Many grants require the applicant to have tenure of the land for at least five years, so by the time you have applied for the grant you would be looking at a minimum term length of seven years or more.”