Diversification on a AHA tenancy

[cudota]

Interested to know if anyone has diversified on a AHA tenancy without having to give up to much or pay dearly rent wise maybe there,s someway thats not well known or agents keep very quite about

 

[GB Kettering]

Good afternoon, it depends on the type of diversification and whether or not that landlords permission is required or granted. Essentially if you are continuing to trade through the diversification and it is your investment, whilst the landlord has a right to some of the income, it is much less, this is something called latent value. However, if you are sub letting then you are technically in breach of your tenancy and the landlord is likely to ask for 50% of the rental income. Please feel free to contact me should you require more detailed advice, as always the answer depends on the situation. [email protected]

 

[Billboy1]

What about if an agent says you can keep all the profit on your diversification and a new one comes along and says I wouldn’t have agreed to that and try’s to subsequently up your rent ?

 

[cudota]

What about if an agent says you can keep all the profit on your diversification and a new one comes along and says I wouldn’t have agreed to that and try’s to subsequently up your rent ?

just about right ........Barsteward

 

[Still Farming]

Some landowners don't worry if their getting their rent and a "cut" possibly!

 

[borderterribles]

When I had an AHA tenancy and wanted to introduce a diversification which strictly speaking, required the Landlord's permission, they wanted too much of the increase in revenue for it to be viable. So it didn't happen.

 

[Gordy1]

A friend of mine wanted to set up a freezer meat business (pork) on the farm but his landlord wanted 50% of the profit....it soon put a stop to that idea!!

 

[hally]

Post f and m there was a lot of grant money for this area for diversification, so we looked into log cabins next to the Roman wall. Land agent said in no uncertain terms that if we went ahead they would tear up our three succession tenancy (one remaining after me) and replace it with a 10 year fbt. Needless to say we didn’t bother so beware.

 

[Still Farming]

Landlords got to be sympathetic to everything as they be stuck soon if no sfp aid in system???

 

[neilo]

We’re on an FBT and it was made clear at the outset that the holding was let for the purposes of farming. They would support diversification, but it would need to be run past them and they’d expect 50% of the profits from it. Obviously that stops any thought of doing anything other than farming here.

Roll on a few years, SFP looked like it would be dropping (even more so now), and the agent is asking if I’d thought about diversifying.....

 

[2tractors]

When we had an AHA tenancy (retired recently) I looked at different enterprises many years ago, my conclusion was as long as you satisfied the occupation clause, the best diversification (if you had the time) was to gain employment; no capital required, all money in your pocket (after tax and NI of course) and no sharing with landlord either.

 

[Billboy1]

We’re on an FBT and it was made clear at the outset that the holding was let for the purposes of farming. They would support diversification, but it would need to be run past them and they’d expect 50% of the profits from it. Obviously that stops any thought of doing anything other than farming here.

Roll on a few years, SFP looked like it would be dropping (even more so now), and the agent is asking if I’d thought about diversifying.....

And your answer was ?

 

[cudota]

Post f and m there was a lot of grant money for this area for diversification, so we looked into log cabins next to the Roman wall. Land agent said in no uncertain terms that if we went ahead they would tear up our three succession tenancy (one remaining after me) and replace it with a 10 year fbt. Needless to say we didn’t bother so beware.

Very similar to us not log cabins ....... Eventually said no .......then says i am not against diversification but you will have turn over to FBT ...i say just the site .... no everything

 

[neilo]

And your answer was ?

A very short one!

In truth, Mrs NeilO and I were buzzing with ideas when we viewed the place, but if you have to give 50% away, why would you invest the time, energy and money? With an FBT, you are also putting yourself open to ransom in forthcoming rent reviews, once you’ve taken all the risks and established a viable diversified enterprise on that location.

Things would likely be very different here if we owned this place, given the rather scenic setting we have. I’m buggered if we’re going to risk everything for the benefit of any landlord, when we could ultimately be forced out by the next rent review.

 

[Still Farming]

Different situations prevail when Subsidy goes probably?

 

[GB Kettering]

What about if an agent says you can keep all the profit on your diversification and a new one comes along and says I wouldn’t have agreed to that and try’s to subsequently up your rent ?

If it was agreed in writing then you have a strong argument for keeping your rent at the same level. This is a complex area of law and a full answer would require sight of the tenancy and any subsequent agreements between you and the landlord.