Beware! Leased Single Payment Entitlements can revert to landlords without warning

Agricultural business consultants Brown & Co have identified a potential problem with leased Single Payment Entitlements reverting back to landlords without warning.

Simon Wearmouth from the firm’s Norwich office says:

"Subsequent to the establishment of Single Payment Entitlements in 2005, many land owners let out land under Farm Business Tenancies and leased the matching Single Payment Entitlements with the land.

"Completion of the Rural Payment Agency (RPA) paperwork to lease out the land and entitlements required an end date for the lease at which point the entitlements would revert back to the Landlord.

"Often the tenant remains in occupation past the term date of the original lease and therefore the original end date specified my not necessarily be the end of the agreement.

"When the original paperwork was completed an end date had to be entered in order for the form to be valid however in the situation where the end date specified has passed and the tenant remains in occupation and it is intended that he will be claiming single payment on the land this year there may well be a problem.

"Officially at least six weeks prior to the specified end date, landlords should have written to the RPA extending the term of the lease, however this requirement may have been forgotten or thought unnecessary.

"In a number of cases, the RPA has transferred entitlements back to the landlord without notifying either party.

"If this has happened, it will be necessary to lease the entitlements back to the tenant in good time for the 2009 claim to avoid further complications."