Building on tenanted ground

[AJR75]

Morning all, first post in this area of the forum so please forgive me if the questions below seem somewhat naïve and hoping for some clarity....

In essence, I rent what's left of the family farm and buildings from "the family" and have done for the last 9/10 years. Nothing is formally recorded but money does change hands annually. Generally speaking the status quo is mutually agreeable as the ground gets farmed and maintenance/ repairs carried out to keep things up together.

Farming enterprise has expanded slowly over the years to the point where now there is a genuine requirement for another building (portal frame) on the site. Now, leaving family dynamics aside as these will be mirrored up and down the country I'm sure... If i were to erect a building (with their blessing) what would the implications be insofar as:

Risks for them and for me if the build went ahead- let's say that in the future the relationship turned sour, would it be a proper can of worms in terms of access/ ownership etc etc
I own the building but not the ground it sits on- how would this be resolved if there was ever the intention to sell to a third party
Am I at risk of a major capital expenditure only to find that they can lay claim to this

I have tried to purchase the ground from then on several occasions but never managed to make any headway there

 

[Fendt516profi]

Would they put the building up for you and then increase your rent. Or you put the building up and when you leave you take it with you or sell it to them

 

[serf]

If you got funds to purchase the land why not buy at bit of land that comes up for sale in area nearby lump it as one to the council for planning purposes and build on your own piece .

 

[AJR75]

Would they put the building up for you and then increase your rent. Or you put the building up and when you leave you take it with you or sell it to them

It would be the latter I would expect,

@serf , yes that's definitely been considered however, opportunities locally are few and far between- the current infrastructure is there already but effectively having 2 sites means more running about to and fro.

 

[Dry Rot]

Would you not just agree to compensation for the building in the event of giving up the tenancy? So, current value less agreed depreciation at x% per annum? That would essentially be the second option but perhaps avoiding potentially difficult negotiations over a sale price.

 

[DRC]

If you had a proper tenancy agreement it could be recorded as tenants improvements , written down over so many years, so if you left before then , you would be paid out on a % of the value .
other wise, build it so it could be easily dismantled

 

[Boysground]

Most of the buildings I have were not put up by the landlord. If my family had waited for that over the decades I doubt very much that the farm would be here now. All have as @silverfox says been done as tenants improvements and written down over a period of time. Sometimes there has been some financial help from the landlord all of which is recorded, I have 85 years worth of documents!

@AJR75 whatever you decide to do it must be agreed in writing, I think you should take advice on a proper tenancy agreement. It could save a lot of heartache in the future if circumstances change.

Finally dont fall foul of planning applications. The planning application should have agreement from the landowner/s. This can cause problems if you dont.

Bg

 

[B R C]

As dry rot says get it built as your asset, easiest way would be straight line depreciation over 30-40 years(modern sheds last a long time). Make sure you can use it for what ever you want ie non farming use/income as well

 

[Skintagain]

This sounds like a disaster waiting to happen in future anyway. That’s what usually happens. Get everything written up if only to nip any arguments in the bud

 

[Formatted]

Think the advice is you should seriously consider getting a formal agreement with the family as you are putting yourself and them at risk of an expensive legal fall out.

If not specifically on the building, we jointly paid for a building on our place, we agreed that our investment into the building was written down over x number of years, if we left before they would repay us what was left of the value. They also offered that we could pay for the whole building ourselves and they'd buy it at the end of the tenancy for an agreed value less depreciation.

 

[dairyrow]

Be careful. They usually get written down over 10 years and they pay you peanuts for them or you've added the value when it comes to sell it. Have a look at poly tunnels if they can fit your use. But the fall out over values and so forth later on might not be worth putting permanent structures up

 

[AJR75]

Thanks all, advice is very much appreciated. A fall out and mess is the absolute last thing that I want (and I'm sure they do).

The general consensus of getting security in the form of a formal tenancy sounds logical to me and would go a long way towards safeguarding both parties from potential dispute in the future as well as giving clarity beyond a handshake.

 

[ifindoubtflatout]

My two pennorth
Think how old the family members are
What happens when they die
Land will need valuing and probate and succession stuff
Also.... how long are intending staying there
If it’s 30+ years then you can justifiably put the shed up and get the value out of it
If you feel it’s less than 10 then perhaps it’s not

 

[betweenthelines]

As above, get some form of written tenancy agreement before you spend money. Better to do now while everyone seems to be on reasonable terms than in the aftermath of a death when everyone wants to secure their tenancy or prove their is no tenancy so they can sell the freehold.

Once you have a tenancy of some sort, you can decide what to do about the new shed. The shed is really a minor problem

As things stand, a sudden death could see everyone else say you just have a grass let , not a tenancy, so they can get you out and cash in. Family ties disappear when there's money involved.

 

[chaffcutter]

In law I believe that the building would belong to the owner of the land it sits on, therefore you definitely need to have an agreement in writing as to ownership. I agree with @silverfox as above, seems a fair way to deal with it to me.
You really should have a proper tenancy agreement to protect you in future, next generation or whoever may not be so easy to deal with, if you are on good terms with your co-owners get it done now before any possible disagreements raise their ugly head (like over the shed?)

 

[Dry Rot]

In law I believe that the building would belong to the owner of the land it sits on, therefore you definitely need to have an agreement in writing as to ownership. I agree with @silverfox as above, seems a fair way to deal with it to me.
You really should have a proper tenancy agreement to protect you in future, next generation or whoever may not be so easy to deal with, if you are on good terms with your co-owners get it done now before any possible disagreements raise their ugly head (like over the shed?)

Spot on! "That which is attached to the soil becomes part of the soil". So if the tenant thinks he can remove that nice building at the end of his lease, he is in for a nasty shock -- unless everything has been agreed in writing before work commences.

 

[yellow belly]

if you have been paying rent and no written tenants agreement the laws on agricultural tenants are complicated but favour the tenant

in the interests of all parties get a mutually agreed tenantcy agreement with provision for tenants improvements

 

[Bald n Grumpy]

Know nothing about tenancies but I would be wary of the situation
What reason do they have for not selling you the ground are they waiting for a big money purchaser from somewhere and you will be out without a thought
If this is the case they're not going to be keen on putting anything down in writing
Was also told by someone renting on an estate that the previous tenant got 25 quid payment when he left for a good building he had put up
I would talk to the family and see what their reaction is to any sort of legal agreement and go from there
Don't assume as it's family your ok

 

[Lincsman]

Dont go down the route of thinking you can take it down and sell it, its rarely worth doing.

 

[chipchap]

What a can of worms.