Leased land (and getting the payment in)

Aska

As some may remember from a few years back, I leased the land to 3 dairy farmers that were joining the block of land. Has anyone any ideas on how to get the money out of these guys when it's due? There's no malice I believe in the slowness to pay but it's bloody annoying to be happening all the time when the payment schedule is due (twice a year), now I drew down a loan (7k per year /5 years, 1 payment per year) on the strength of the lease money being there and now that's going to default on thursday so that affects me.

What are the options open? I live beside these 3 and they wave in great fashion but no money seems to be incl. in the waves!!!! Would you get the solicitor to draw up 3 letters reminding them of the payment dates and maybe highlight the word cancellation if overdue? It's just become annoying at this point.

wrangler

Aska wrote: »

As some may remember from a few years back, I leased the land to 3 dairy farmers that were joining the block of land. Has anyone any ideas on how to get the money out of these guys when it's due? There's no malice I believe in the slowness to pay but it's bloody annoying to be happening all the time when the payment schedule is due (twice a year), now I drew down a loan (7k per year /5 years, 1 payment per year) on the strength of the lease money being there and now that's going to default on thursday so that affects me.

What are the options open? I live beside these 3 and they wave in great fashion but no money seems to be incl. in the waves!!!! Would you get the solicitor to draw up 3 letters reminding them of the payment dates and maybe highlight the word cancellation if overdue? It's just become annoying at this point.

Your lease should say that the money has to be paid within a fortnight of the due date......I know i won't be chasing anyone, the lease will be over, They'll be out
Talk to them

Aska

wrangler wrote: »

Your lease should say that the money has to be paid within a fortnight of the due date

I wouldn't have thought of it at the time, but it looks like we dropped the ball with that part in the lease as it only mentions the payment dates, nothing extra re: within certain time frame etc.

raypallas

Lock the gate as they have broken the lease, would you re-advertise the property? Hope you get sorted.

the_syco

Aska wrote: »

it only mentions the payment dates

How far past this date has it been?

wrangler

Most people use the IFA Master Lease,It's a good lease and some farmers use it without even involving a solicitor, that could be penny wise and pound foolish though.
Our solicitor uses it as a template all the time, nearly sure the fortnights grace is on it, It's on mine any way

J.O. Farmer

Aska wrote: »

As some may remember from a few years back, I leased the land to 3 dairy farmers that were joining the block of land. Has anyone any ideas on how to get the money out of these guys when it's due? There's no malice I believe in the slowness to pay but it's bloody annoying to be happening all the time when the payment schedule is due (twice a year), now I drew down a loan (7k per year /5 years, 1 payment per year) on the strength of the lease money being there and now that's going to default on thursday so that affects me.

What are the options open? I live beside these 3 and they wave in great fashion but no money seems to be incl. in the waves!!!! Would you get the solicitor to draw up 3 letters reminding them of the payment dates and maybe highlight the word cancellation if overdue? It's just become annoying at this point.

You say you live beside and you don't think it's out of malice they're not paying so maybe talking to them in person might be a good idea as a first step rather than just sending a solicitors letter out of the blue.

You could send a solicitors letter but do you really want to go for the nuclear option and piss off your neighbours as a first step.

Aska

J.O. Farmer wrote: »

You say you live beside and you don't think it's out of malice they're not paying so maybe talking to them in person might be a good idea as a first step rather than just sending a solicitors letter out of the blue.

You could send a solicitors letter but do you really want to go for the nuclear option and piss off your neighbours as a first step.

I see your point, however this is the 3rd year this crap as being going on to one extent or another.

2 are on twice a year payments (feb & aug) and one is on a single payment in Feb. This is by far the worst year as none of them have come forward with money but they have being spreading on the land etc so it's not that the land has slipped their minds.


Farmer 1 - usually pays in Feb (one off payment)

Farmer 2 - usually pays 1st part in Feb and 2nd part in Dec when sfp comes (I guess if it ever gets delayed on him then I get nothing?)

Farmer 3 - Paid last June for year 1 & 2 (feb & aug payments) so lord knows when I will see anything this year.

So with it all over the place in terms of actual payments it was hard to get the loan on the strength of it but the bank could see that March seemed the safest bet on repayments as there was usually enough to cover it, however they showed me this year didn't they


You would think you'd be doing the decent thing by dividing it between them when in fact they'd walk all over you given the chance,

whelan2

February wouldn't be a great month on cashflow on most farms. Can you get the lease changed to a better month? Maybe talk to them and,say you have financial commitments to meet on the basis of their money coming in and you need the money on time. You seem to be very unfortunate to have 3 bad payers

amacca

3 people leasing the one block of land or 3 people with 3 separate sections of it?

Are the farming it together or what?

epfff

Firm but fair
Meet all 3 today dont put off
Explain that you are hungry lots of problems and need money now
Give it in **** sandwich
Praise them great tennent etc
Hit them lot of interest from others might have to take bit less but coming in lump up front etc
Then praise again you would hate to lose them but sher I will not fallout with you if we have too

A quiet priest never got a parish

Depends on where you are but their is lads walking on eachother for dear leases here
So you should have no problem getting new tennent and start off os you Intend to go on

MIKEKC

whelan2 wrote: »

February wouldn't be a great month on cashflow on most farms. Can you get the lease changed to a better month? Maybe talk to them and,say you have financial commitments to meet on the basis of their money coming in and you need the money on time. You seem to be very unfortunate to have 3 bad payers

When these guys took out the lease they knew their cash flow situation

wrangler

Aska wrote: »

I see your point, however this is the 3rd year this crap as being going on to one extent or another.

2 are on twice a year payments (feb & aug) and one is on a single payment in Feb. This is by far the worst year as none of them have come forward with money but they have being spreading on the land etc so it's not that the land has slipped their minds.


Farmer 1 - usually pays in Feb (one off payment)

Farmer 2 - usually pays 1st part in Feb and 2nd part in Dec when sfp comes (I guess if it ever gets delayed on him then I get nothing?)

Farmer 3 - Paid last June for year 1 & 2 (feb & aug payments) so lord knows when I will see anything this year.

So with it all over the place in terms of actual payments it was hard to get the loan on the strength of it but the bank could see that March seemed the safest bet on repayments as there was usually enough to cover it, however they showed me this year didn't they


You would think you'd be doing the decent thing by dividing it between them when in fact they'd walk all over you given the chance,

Plenty demand for land out there and demand they get up to date and make them aware it won't happen again.
I know my lease cost a bit to do, it's a waste if they ignore it then
I let my tenants chose the payment regime and made them aware then no messing would be accepted.

Field east

Aska wrote: »

I see your point, however this is the 3rd year this crap as being going on to one extent or another.

2 are on twice a year payments (feb & aug) and one is on a single payment in Feb. This is by far the worst year as none of them have come forward with money but they have being spreading on the land etc so it's not that the land has slipped their minds.


Farmer 1 - usually pays in Feb (one off payment)

Farmer 2 - usually pays 1st part in Feb and 2nd part in Dec when sfp comes (I guess if it ever gets delayed on him then I get nothing?)

Farmer 3 - Paid last June for year 1 & 2 (feb & aug payments) so lord knows
when I will see anything this year.

So with it all over the place in terms of actual payments it was hard to get the loan on the strength of it but the bank could see that March seemed the safest bet on repayments as there was usually enough to cover it, however they showed me this year didn't they


You would think you'd be doing the decent thing by dividing it between them when in fact they'd walk all over you given the chance,

Your situation sounds very messy.
I suggest that you adapt the following strategy.
(1) arrange with a solicitor, auctioneer , ‘land renting agency’ the idea of putting all three on the same payment schedule with the same set of conditions.
(2) select a lease agreement that suits you - it being the IFA one or whatever
(3) approach the three farmers with a view to discussing the standardizing/streamlining your land lease agreements and you plan to use an agent to manage your business, etc, etc, etc. so as to make it easier on everyone.

You are probably aware that it is very tax efficient to rent land on a five or seven year lease - depending on the amount of rental income.

Rather than collecting payments once a year , collecting at different times , etc , why not collect the first moiety on April first and second moiety on Sept first.
If any one or all three are obviously resisting your new arrangement then say that as soon as the current lease arrangement runs out that the new arrangement will be put in place for all land you will be leasing to whoever because you find the current ARRANGEMENTS very cumbersome and difficult to keep track of same

Bass Reeves

I do as Epfff suggests, in future invoice them two weeks before payment date, highlighting it as a method of reminding them. Explain you have commitments relating to the payment dates. The one good thing is they all seem to pay except one but he has paid as well.

Lads just need a bit of a reminder at times.

Donegalforever

Considering your difficulty in getting payment have you considered making it a condition that payment has to be up-front in future. If the three "gentlemen" do not agree to that, others may.
I have in the past seen land advertised for letting with the requirement that payment must be made up front.
It definitely is not good enough that you are kept waiting and waiting for payment.

arctictree

How about doing something like this. Explicitly state in the contract that the property will be locked on 1st Feb each year at 9am. Payment of the lease will then unlock it for the subsequent year. A delay of more than seven days and the property will be put on the open market. Any diligent men will be waiting to meet you at the gate at 9am each year with cheque in hand.

Butcher Boy

look come out straight and pick up the phone and give them a ring you are being more than fare with them and ask for your money straight out no messing,at least then you will know if it is coming or not.

Aska

amacca wrote: »

3 people leasing the one block of land or 3 people with 3 separate sections of it?

Are the farming it together or what?

One block of land that spans from right to left if that makes sense, one guy has whats joining him on the left, another on the right and the 3rd ones have the middle (as I surround them completely).

MIKEKC wrote: »

When these guys took out the lease they knew their cash flow situation

Well that's it really in a nutshell, Every day or week we go out and there is stuff we want to purchase but it a machine or animal and when you look at the finances you have to make that decision that you may not have the cash to cover it, of course there are the ones out there who will wing it and see how it plays out.

There's no point me gloating about getting €320/acre when I am not getting it, I should eb but I am not seeing it, now this will all be settled in the coming weeks etc. but I just want to avoid a repeat of this scenario in the future

arctictree wrote: »

How about doing something like this. Explicitly state in the contract that the property will be locked on 1st Feb each year at 9am. Payment of the lease will then unlock it for the subsequent year.

While alot is road frontage and the road gates are possible to do this too, there are newely made entrances from their lands into different fields which make that impossible, that's a real track machine job.

Bass Reeves

Aska wrote: »

but I just want to avoid a repeat of this scenario in the future

Explain to them this year that you have commitments in regards to the payments and that you intend to invoice then 14 days before payment in future as a reminder and need to be paid on payment date. Another option is to get them to do a direct debit mandate for payment dates but these can fail as well. However if they fail it give you the option to contact them immediately as long as you watch the direct debit and seek payment.

Who2

As bass said, but your best bet is to approach them and say it out straight. I’m supposed to be invoiced prior to payment on a bit of ground I’ve taken but have yet to get one. Honestly I forgot one year and it wasn’t until I was putting cattle on it that I remembered. I apologized to the landlord and just asked him to remind me if it happened again. Regardless they agreed on the dates and will probably drag it out if they think your a soft touch but if you just make contact with them they’ll get their skates on. If they don’t then you know it’s going to be hardship and your better off moving them on.

kk.man

arctictree wrote: »

How about doing something like this. Explicitly state in the contract that the property will be locked on 1st Feb each year at 9am. Payment of the lease will then unlock it for the subsequent year. A delay of more than seven days and the property will be put on the open market. Any diligent men will be waiting to meet you at the gate at 9am each year with cheque in hand.

I d keep the option of locking gates to myself...he might go and lock them himself and then you be in trouble.

L1985

I'd say use someone else to manage the leases-we don't get involved with ours and pay an auctioneer. Yes it's more expensive but there is no messing and they can't come to us poor mouthing. Get paid on time and no complaints either way which is the way we want it. The guy chases them for money which means we don't have to! It's a bigger cost thou

grassroot1

They have taken your land and they owe.Send an invoice straight away for moneys owed. Have no sympathy with them they knew what they were getting into when they took up the lease. They are breaking the terms of the lease. Take back you farm and lease it through an auctioneer next time.

Bass Reeves

I think a lot of people are forgetting about the tax relief on leasing. It is not a simple matter of taking back the land terms and conditions of the lease have to be met not just because it is a lease but also because of the tax relief on leasing. TBH I think it is often just a matter of reminding lads about payment.

grassroot1

Bass Reeves wrote: »

I think a lot of people are forgetting about the tax relief on leasing. It is not a simple matter of taking back the land terms and conditions of the lease have to be met not just because it is a lease but also because of the tax relief on leasing. TBH I think it is often just a matter of reminding lads about payment.

I think you are being generous

atlantic mist

could you ask for the payment terms of lease to change to a monthly basis instead of 2 yearly payments

this will reduces the risk of non payment and improves cash flow for both you and the lessee

jaymla627

atlantic mist wrote: »

could you ask for the payment terms of lease to change to a monthly basis instead of 2 yearly payments

this will reduces the risk of non payment and improves cash flow for both you and the lessee

DD for the day milk cheque hits account is the only way to go, if these start getting returned said lads must be nearing going wolloo

K.G.

Might be no harm to let on to each of them the other lads are better to pay than them and they are the only ones that are slow .if you are real daring tell them the other lads were asking about each others piece.😆rent alot of land and sometimes it slips with one thing or another but its something i try and keep on top of as i have tennets too and it does pick at you if its late

yewtree

Any land we lease here is paid by DD, spilt the payments 1st of may 1st of October, it suits us with cashflow and landlords know they will get paid. there is so much coming and going its hard to remember things and there can be honest mistakes made.
Not a massive fan of auctioneers, taking a cut out of things and adding very little value. Auctioneers main goal around here seems to be to promote con acre.