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Farming Monthly – March 2024

Whether it’s a house, an office building, farmland or another type of property, where it’s occupied by somebody other than the owner, it’s in the interests of both parties that the terms under which it’s occupied are clear and enforceable.

It is not uncommon for owners to have unrecorded oral agreements giving occupation of property to another, particularly with certain types of property, but it’s very likely to be to the disadvantage of at least one of the parties in the event that the relationship breaks down, one party seeks to enforce the terms of their bargain against the other or the owner simply wants the property back.

Unwritten agreements can still be legally binding but it’s much harder to prove the rights and responsibilities of each party.

The owner may not even have intended to create a tenancy, and although a written record of the terms of occupation is important and advisable, potentially it could be worse if the written agreement does not correctly reflect the intention of the parties.

The label that’s put on a document is not conclusive as to its status, so calling a document a ‘tenancy agreement’ may not make it so, the facts of the arrangement as well as its format needs to be considered.

There is an enormous amount of legislation relating to tenancies of different types of property, but sometimes there can be a question as to whether there is a tenancy in the first place.

Simple occupation of a property with the consent of the owner, may not be enough. It’s heading for 40 years since the courts ruled on the leading case regarding the distinction between a tenancy and a mere personal right to occupy property, but the decision continues to be reinforced.

For example, more recently, the High Court held that an agreement for occupation, despite being expressly referred to as a licence within, actually created a business tenancy and so the occupier had acquired rights under the Landlord and Tenant Act 1954.

So, with that cautionary tale in mind, it’s also important to ensure that the documentation accurately reflects the understanding and intentions of the parties rather than just for the sake of having something in writing.

Whether you are a property owner or a potential tenant, it is always advisable to take legal advice before entering into such an arrangement given the complexities in this area of law.

It is always cheaper and easier to get matters right from the outset, rather than trying to rectify problems after the event.

Contact one of the team at Crombie Wilkinson Solicitors on 01653 600070 who will be happy to help.

Author: Emily Watson, trainee solicitor at Crombie Wilkinson Solicitors

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