AHA's Flashcards
What is the Timetable for AHA End of Tenancy compensation?
Claims by tenants must be notified to the LL prior to 2 months before the expiration of the tenancy.
8 Months following the expiration of the tenancy are allowed for settlement of the agreement.
What section of the AHA is compensation under?
Schedule 7
What is a long term improvement? What compensation is due?
Long term improvements
Part I – Those which consent of the landlord required
− Improvements of a specialised nature
− E.g. making of osier beds, water meadows, watercress beds, planting of hops, orchards, fruit bushes, warping or weiring of land, provision of underground tanks
− Landlord can give conditions with the consent
− No consent, no compensation
Part II – Those which consent of landlord or approval of tribunal required
− Where the tribunal grants consent for the improvement rather than the landlord,
the same rules apply
− Includes erection, alteration or enlargement of buildings etc.
What compensation is due under Section 66?
‘an amount equal to the increase attributable to the improvement and the value of the agricultural holding as a holding, having regard to the character and situation of the holding and the average requirements of tenants reasonably skilled in husbandry’ –
i.e. what is the rental value that a new tenant would pay for this?
What is a short term improvement? What compensation due?
Short term improvements
● Entitled to compensation whether or not permission was granted
● Covers things including mole drainage, tree protection etc. Also covers manurial
values
● These tend to be acts of good husbandry and are treated as tenant right matters.
Compensation is the value to an incoming tenant
What is landlord compensation due?
Under section 71.
Includes dilapidation, deterioration of or damage to any part of the holding by the tenant not fulfilling their obligations.
Amount is the cost of making good at the date of quitting the holding, but must not exceed the diminution in value to the Landlords reversion.
How to review rents under AHA? What is process
Serve section 12 trigger notice giving 12-24 months notice to review rents.
Rent is to set as per the rent review formula - “The rent properly payable in respect of a holding shall be the rent at which the holding might reasonably be expected to be let by a prudent and willing landlord to a prudent and willing tenant, taking into account all relevant factors, including (in every case) the terms of the tenancy (including those relating to rent), the character and situation of the holding (including the locality in which it is situated), the productive capacity of the holding and its related earning capacity, and the current level of rents for comparable lettings…”
What factors do you take into account when reviewing the rent?
Character and Situation - General nature of the farm, soil grade, situatoin may be relevant, proximity to markets etc.
Productive Capacity - Assumption that the holding is in the hands of a competant tenant practicing a suitable system of farming
Related earning capacity - A detailed gross margin and fixed cost budget is prepared and this then gives the divisible surplus. Meaning that the surplus amount at the bottom of the budget can be divided to give a suggested figure of a proportionate rent.
Comparables - looking at similar properties will give a market idea of where the rent should be.
Other relevant factors
The Act states that, as well as the points discussed in the previous few paragraphs, ‘all relevant factors’ must be taken in to account. This includes things like non-ag income, marriage value and the tone of the market.
