Terminating farm lease

Mad_maxx

An uncle rang me from the UK over the weekend, he's lived there since the seventies but is moving back for personal reasons , he knows I work in the area of property and asked me my opinion about selling his fifty acre farm in the North East, thing is, he has the farm leased to a dairy man who takes silage off half of it and grazes the rest with replacement stock, the lease is ten years at 200 per acre but a break clause exists for both sides next year. When he entered the lease, things were different.

He wants to break the lease but appreciates that this will inconvenience the farmer, he does not know the farmer well, the whole thing was done through auctioneers and solicitors.

My uncle is willing to compensate the farmer as he reseeded some of the land and from what I've been told has looked after the place.

What might be a reasonable level of compensation?

He realises that he legally owes no compensation but feels its sensible as if the farmer refused to vacate, it would cost money pursuing matters through the courts

Siamsa Sessions

Reseeding costs vary from 250-450 per acre but if it's managed right and the farmer grows/uses more grass, then it pays for itself within 2-3 years.

Might such figures help work out how much your uncle could offer?

Of course it could get awkward, but the tenant cannot refuse to leave. Fellas gain and lose rented land all the time, so losing a bit of ground is par for the course. Maybe your uncle could also give the farmer notice now, and leave him on the land for another 12 months? That'd give the farmer some time to work something out.

Mad_maxx

Siamsa Sessions wrote: »

Reseeding costs vary from 250-450 per acre but if it's managed right and the farmer grows/uses more grass, then it pays for itself within 2-3 years.

Might such figures help work out how much your uncle could offer?

Of course it could get awkward, but the tenant cannot refuse to leave. Fellas gain and lose rented land all the time, so losing a bit of ground is par for the course. Maybe your uncle could also give the farmer notice now, and leave him on the land for another 12 months? That'd give the farmer some time to work something out.

My uncle doesn't need the farmer to leave until next September, he will also give the farmer first refusal to buy the place.

Perhaps on paper the tenant can refuse to leave but in practice, the way things are, he could dig in

The uncle has a years rent in mind as compensation?

Ard_MC

Good chance the dairy farmer could buy it.