Changes to the model clauses for buildings and other fixed equipment on 1986 Act tenancies will alter the repairing obligations of many landlords and tenants in Wales.
Where liability for an item is switched between them, they will have just one month in which to go to arbitration over any issue about its condition. Where repairs are not covered by the tenancy agreement these statutory clauses say who is to do what work, with many agreements relying on these clauses.
The changes, which come into force on 1 November 2019, will affect Welsh tenancies under the Agricultural Holdings Act 1986, advises the Central Association of Agricultural Valuers (CAAV). They will broadly bring Wales in-line with England, which introduced its own updates in 2015, explains Jeremy Moody, secretary and adviser to the CAAV.
Where the clauses apply, they stipulate whether it is the landlord or tenant who is responsible for the repair, replacement and insurance of fixed equipment on agricultural holdings, and to what extent. Under the old clauses, there had been some confusion over certain responsibilities, so the new clauses will clarify these areas, as well as introducing new types of fixed equipment, like renewable energy.
Some important changes include an increase in the tenant’s spending cap on roof repairs, from £100 to £500, and the switch of responsibility from the tenant to the landlord for keeping and repairing electrical supply systems and fittings.
“The changes to the model clauses will apply to any tenancy under the Agricultural Holding Act unless indicated otherwise in the individual contract,” says Mr Moody. “For those with a Farm Business Tenancy, these will only apply where the regulations are specifically referred to in the agreement.”
Additionally, any tenancy which specifically refers to the old model clauses will not be affected by the change, except the legislation now covers new items – like the addition of renewable energy technology – which will apply, says Mr Moody. “A tenancy may also indicate that it is to be amended or replaced by updates, in which case the new model clauses will apply.
“If you know that your tenancy has its own stipulations, there might be no changes when the new clauses come into force. However, landlords and tenants should still assess their individual agreements to confirm if any changes will apply.”
In some cases, responsibilities that previously lay with the tenant or landlord under the old system will pass from one to the other under the new clauses. “It’s important to be aware that you may soon have to be responsible for something that the other party was previously obligated to do.”
In those instances where obligations do shift but the person responsible under the old clauses had not fulfilled their repairing duty, the new caretaker has one month to invoke arbitration, starting from 1 November, says Mr Moody.
“Both parties only have a short window of opportunity to address any issues, meaning time is of the essence.”