Farmers should study new rules before renting out housing, warn property experts at Irelands Arnolds Keys

Simon Evans, Irelands

Simon Evans, Irelands - Credit: Irelands

Farms which are diversifying by renting out former 'tied' properties must take care not to fall foul of a huge raft of new legislation, according to a Norfolk-based property expert.

With many farms now operating with a much leaner staff base, opportunities have opened up to increase income by letting out former farm workers' homes on the open residential market, said Simon Evans agricultural partner at rural property specialists Irelands Arnolds Keys.

'Whilst farm worker tenancies were covered by agricultural law, many farmers who are now renting out those same homes on the open market may not be aware of the extent of residential lettings law which now applies to those tenancies,' he said.

'Diversifying into residential property lettings is about making the most of the farm assets. But it is important to understand the regulatory commitment that you take on when you seek to boost farm income in this way.

'Although that cottage which backs onto the farmyard may feel like it's part of the farm itself, once it is let as a residential property, the laws which govern its management are the same as any urban residential letting.'

A huge raft of recent new legislation relating to the letting of residential property has been aimed at raising standards – but it is also having the effect of making it ever more difficult to stay within the law when it comes to managing that property portfolio, explained Jan Hÿtch, lettings and operational partner at Arnolds Keys.

'Since the end of 2012 we have seen hundreds of new statutes and regulatory instruments introduced, covering topics such as retaliatory evictions, statutory fines, health and safety and consumer protection. We also have to take into account other legislative changes which have affected landlords, from stamp duty, income tax, corporation tax and capital gains tax.

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'Some of the more onerous new laws passed in recent years include Right To Rent (effectively obliging the landlord to become an immigration officer); the legal requirement to put smoke alarms on every floor; and the obligation on landlords to serve 'prescribed information' to new tenants (with serious consequences if this is not done, including losing the right to regain possession).'