5 year agricultural land lease

18MonthsaSlave

Why would a leasee propose a 5 year lease deal for agricultural land rental to a leaser and why would a leaser who is approaching 80 years old even consider it.
Would a leasee expect to be paying a discount for entering in to a 5 year lease or a premium for the security of tenure it gives to them.

I assume any grant or tax benefits the leasee would enjoy would be clawed back if the lease were to end early. Is this correct?

world_weary

18MonthsaSlave wrote: »

Why would a leasee propose a 5 year lease deal for agricultural land rental to a leaser and why would a leaser who is approaching 80 years old even consider it.
Would a leasee expect to be paying a discount for entering in to a 5 year lease or a premium for the security of tenure it gives to them.

I assume any grant or tax benefits the leasee would enjoy would be clawed back if the lease were to end early. Is this correct?

a leasee would expect to pay a premium of course , security of tenure allows room for business expansion

18MonthsaSlave

leasee has already been shown to be a slow payer, leaves cattle on land in december/january and land is cut up as a result. Leasee refuses to engage with the appointed Estate agent and approaches Landholder directly.
Leasee is not willing to pay established market rate for land on yearly basis.
Why would landowner wish to continue relationship with this leasee?

world_weary

18MonthsaSlave wrote: »

leasee has already been shown to be a slow payer, leaves cattle on land in december/january and land is cut up as a result. Leasee refuses to engage with the appointed Estate agent and approaches Landholder directly.
Leasee is not willing to pay established market rate for land on yearly basis.
Why would landowner wish to continue relationship with this leasee?

i have no clue as to why they would continue to have any kind of dealings with this person

LivInt20

Lease income is Tax FREE if lease is for 5 years or more.

18MonthsaSlave

landholder is approaching 80.

Username John

18MonthsaSlave wrote: »

landholder is approaching 80.

I think when you're 80, that may not seem that old

dimsumss

most leases are 5 years

18MonthsaSlave

source?
property price register only shows about 40 to 50 agricultural leases for year 2014.

Miname

18MonthsaSlave wrote: »

source?
property price register only shows about 40 to 50 agricultural leases for year 2014.

I think 5 year leases and above are better for both the farmer and landlord. The farmer can expand accordingly and the landlord has a guarantee of rent for a fixed term. A lot of the lads round me that take land on short term or annually usually drain the ground without replenishing anything. Long terms tend to give it that bit more respect

18MonthsaSlave

If you were of a certain age where taking the necessary steps to prepare for sale and maximise sale price was of utmost importance would you enter a 5 year lease agreement on a valuable piece of real estate.

Miname

18MonthsaSlave wrote: »

If you were of a certain age where taking the necessary steps to prepare for sale and maximise sale price was of utmost importance would you enter a 5 year lease agreement on a valuable piece of real estate.

Is it agricultural real estate or commercial

18MonthsaSlave

land

Username John

18MonthsaSlave wrote: »

If you were of a certain age where taking the necessary steps to prepare for sale and maximise sale price was of utmost importance would you enter a 5 year lease agreement on a valuable piece of real estate.

So...

There is a farm...

- I think it's let with a bit, on an annual lease
- the landowner is 80 (you mention this in 2 posts)
- the tenant is not a great tenant
- the tenant has asked for a 5 year lease

And you want to know would a 5 year lease affect the selling price of the place?

I'm guessing you're not the tenant in the equation, so are you the 80 year old? Or how exactly do you fit into all this?

world_weary

Username John wrote: »

So...

There is a farm...

- I think it's let with a bit, on an annual lease
- the landowner is 80 (you mention this in 2 posts)
- the tenant is not a great tenant
- the tenant has asked for a 5 year lease

And you want to know would a 5 year lease affect the selling price of the place?

I'm guessing you're not the tenant in the equation, so are you the 80 year old? Or how exactly do you fit into all this?

i imagine he is a close relation of the landlord

not sure why it matters all that much

Injuryprone

18MonthsaSlave wrote: »

If you were of a certain age where taking the necessary steps to prepare for sale and maximise sale price was of utmost importance would you enter a 5 year lease agreement on a valuable piece of real estate.

I'd imagine if I was 80 and the next generation was waiting for me to kick the can so that they could cash in my valuable piece of real estate, then preparing the land so as to maximise the sale price wouldnt exactly be top of my list of priorities.

I'd be interested in achieving a secure, dependable income for the coming years

18MonthsaSlave

Injuryprone wrote: »

I'd imagine ...

You engage in much idle cynical speculation which reflects poorly upon yourself.
Landholder pointed out to leasee that he might not be present in five years time. Landholder has previous experience of a chaotic succession situation and wishes to avoid same.

kowtow

18MonthsaSlave wrote: »

You engage in much idle cynical speculation which reflects poorly upon yourself.
Landholder pointed out to leasee that he might not be present in five years time. Landholder has previous experience of a chaotic succession situation and wishes to avoid same.

Then the landholder is going to have to pay tax on the rental income like everyone else.

landholder can either have cake, or eat it.

18MonthsaSlave

Landholder can afford to pay tax or even if need be leave the land idle although this would be a waste of productive land. Idle land is better than land with an embedded problem leasee. Ideal solution is to have a good leasee take the land on a year by year basis. Landholder is not charging market rate but lease amount is now far below market rate and the leasee is not treating the land in the manner the leaseholder would have hoped that perhaps it is better no new lease be entered in to with this leasee.

Getting back to the point of this tread it appears that there is no major compelling reason to accept the leasee's proposal of a 5 year lease in this situation.

frazzledhome

It's simple

5 yr lease, landowner dies only option is wait till end to sell land, buy out farmer leasing or sell to farmer. Tax savings for landlord

Annual conacre, you're free to sell as soon as estate is transferred at next renewal. No tax saving for landlord

As someone who leases land and looks after as my own I wouldn't touch no2 as I cannot plan my business. I can get any amount of 1 yr land locally but opted to travel 30km to get 5-7 yr land.

You are correct you do not need to lease for 5 yrs. it sounds to me like you need a new tennant a good operator who'll have land on top order for sale in 5 yrs something that can't be done in 1 yr. a 1yr guy won't invest in reseeding, p&k or fencing

Kovu

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