If you are looking to start a livery yard, finding the right premises is crucial to the success of your business. Curb appeal is a big influence and a yard that is clean, tidy and in good repair will inevitably attract more interest than a rundown yard. However, care should be taken to ensure that you are aware of the obligations and expenses that you will take on in signing yourself up to a lease.
If you already own a property that has equine facilities or are looking to convert existing buildings into equine facilities in order to generate some additional income, there are also a number of matters that should be considered before granting a lease to a tenant.
The first thing to consider is whether there is adequate permission for use of the land for equine purposes. The majority of livery yards can be found attached to or located on farms which will be authorised for agricultural use. The only equestrian uses that fall under agricultural use are producing horses for slaughter or turning out horses for grazing only. As soon as the horses receive any other attention such as additional feeding, riding on the land or even rugging the horses, the use falls under equestrian use and an application for change of use should be made to the local planning authority. Failure to do so could result in the local planning authority taking enforcement action which could result in the land being returned to agricultural use.
What facilities are available for the stabling of horses? How many boxes are there? If you are taking on the yard, will there be enough stables for all of the horses you intend to keep? Livery that includes a stable will earn you more money but additional structures could mean additional expenses. It is important to establish who will be responsible for maintaining the structure of the stables including the roof. Whether the landlord or tenant is to repair, it is important to ensure that the stables are thoroughly inspected to find out what state of repair they are currently in to give an idea of the cost associated with their upkeep.
As a tenant, will the stables be adequate for your purposes? Is the flooring suitable, will it be easy to clean and to allow for run off? If so, where does the run off drain to? Is the roof water tight? Is there adequate ventilation? Are they big enough? Stabling for ponies should be approximately 10ftx10ft and for horses 12ftx12ft. Thought should also be given to fire safety and compliance with fire regulations. Do the stables have adequate evacuation points for a quick exit?
If you are a landlord, you may agree to maintain the stables but what happens if damage is caused by the tenant or one of the horses? It is important to consider how often repairs might be required, after all, you will have no control over the four legged tenants that reside in the stable and some horses make a habit of destroying boxes just for fun! You should also give thought to how the stables will be handed back to you. A schedule of condition can help evidence the condition of the stables at the start of the term.
Drainage is an important consideration. Ideally the stables will have a floor with a slight slope to allow for run off. The yard itself should have sufficient gulleys leading to a drain to allow for any water to drain away from the stables and the yard area. Any run off should be directed to an impermeable lagoon or sealed effluent tank that can be removed. A clean water supply is vital. The supply should service the yard and for ease of use supplies should be present in the fields. The water supply pipes should be sufficiently insulated to avoid pipes freezing in adverse weather conditions. An electricity supply will also be required. Lights will be needed in the stables and ideally over the yard. A lit schooling area will be attractable to potential customers as it will allow for evening riding in the winter months. Electric fencing will be necessary and it is important to consider how this will be powered. Will this be powered from the main supply or by a battery? Who will be responsible for paying the cost of the electricity used or the batteries supplied? Again, maintenance of the private drains, water supply pipes and electrical cables should be considered. As a tenant, if the pipes, drains and wires cross land that is not included in the lease of the yard, you must ensure that there are sufficient rights to send and receive services to and from the yard. Thought should also be given to maintenance if this is to be the responsibility of the tenant. If a drainage pipe becomes blocked do you have the right to enter onto the neighbouring land to repair it?
It is important to inspect the fields available to ensure that they are suitable for grazing horses. As a tenant, thought should be given as to whether the fields are likely to become water logged in adverse weather conditions meaning that the fields become unusable. Is there adequate space for the amount of horses that you intend to keep with additional space in the event that one of the fields becomes unusable? Who will be responsible for field maintenance and what will this entail? Are there any weeds growing on the fields that will need to be controlled. The Weeds Act 1959 gives the Minister of Agriculture Fisheries and Food the power to serve notice requiring an occupier to remove weeds that are listed under the Act. They include spear thistle, creeping or field thistle, curled doc, broad leaved doc and common ragwort. It is important to decide who will be liable for compliance with this Act. Failure to comply with the Act is an offence which could mean fines or other penalties. If the tenant is to be responsible for compliance, how much will it cost to treat any affected land and how long will it take? Fields that need extensive treatment will not be able to be used and could impact the income from any liveries. There are other laws relating to the control of ragwort that should be considered under The Ragwort Control Act 2004.
Adequate fencing is essential to ensure that the horses can graze safely and securely. Consideration should be given to who will be responsible for maintenance of the fencing. What sort of fencing is in place at present? Is it just electrical tape or is there more substantial rail and post fencing? Electrical taping will be cheaper to repair but may not be sufficient for containing persistent escape artists. If the fencing is rail and post (or something similar) what condition is it in? Will it need repairing frequently and what are the likely costs?
Security of the yard is paramount and horror stories of thieves targeting yards are all too common. Are the yard and fields visible from the road? What security measures are in place? Frequently yards are in locations where there is no accommodation on site and so sufficient security measures are vital. If there are none in place at present, who will be responsible for installing these and bearing the cost? Thought should be given to the requirements of your building and contents insurer.
Potential contamination should be considered. As a working yard, there will need to be adequate facilities in place for the disposal of manure as well as the run off from washing out stables and the yard. The Department for Environment Food and Rural Affairs has published a code of practice for horse owners which sets out guidelines for storage and disposal of waste from yards. The Code advises that any muck heaps must not be near water sources or the stables. Special guidelines are in place for nitrate vulnerable zones and consideration should be given to any further ground water legislation. As a landlord, it is important to ensure that any neighbouring land will not be contaminated and that any future use of the land will not be hindered by contamination. As a tenant, you should give thought as to the arrangements for removal of any manure. Who will do this? Is there adequate space for any farm machinery to access the muck heap to remove it?
As a tenant, once you have established the main aspects of the yard, it is important to consider the location and facilities available. After all, these are the things that are going to attract potential liveries. Is there adequate hacking in the area? Is there sufficient parking for cars, lorries and trailers? Is there space to load and unload horses? Do you have plans to upgrade any of the facilities? If so, you must ensure that the lease between you and the landlord allows this and be mindful of any restrictions on making alterations. As a landlord, consideration should be given to what alterations you are willing to permit. What will happen at the end of the term of the lease? If the tenant is to remove the alterations, are there adequate provisions to ensure that any damage caused to the yard is made good?
There are a number of statutes and regulations in place setting out minimum standards for the care of horses and health and safety. The British Horse Society (“BHS”) runs a livery approval scheme. As both a landlord or tenant, being able to confirm that your yard has had BHS approval may make letting or liveries easier as it will give peace of mind that the facilities are up to a good standard. The approval scheme is voluntary and not mandatory. If you chose not to use the scheme, you must ensure that the yard meets the standards required by the Animal Welfare Act 2006. As a tenant, you should also be aware of the provisions of the Horse Passports (England) Regulations 2009. The Regulations require all full livery yard owners to ensure that each and every animal kept on the yard is correctly identified. Insurance should be in place not only for buildings but for contents and public liability. It is important to establish who will be responsible for putting in place insurance. Usually, the landlord insures the buildings and claims to cost back from the tenant.
As a landlord, it is important to have a provision to review the rental income of the yard. Rent reviews can be carried out in a number of ways and will ensure that you are gaining a fair rent for the yard. As a tenant, having the option to break the lease may be an important factor, particularly is your business is new. An option to break allows you to bring your lease to an end earlier that the expiry of the term of the lease. It is usual for options to break to be set on specified dates and if a break clause is agreed, care should be taken to make sure that the break date is diarised so that it is not forgotten about.
Once the lease between the landlord and tenant has been agreed thought should be given to the form of agreement to be made between the tenant and the liveries. Is there any restriction in the lease on letting the yard out to liveries? As a landlord, do you want to have some control over the liveries that are taken on? If so, a clause should be agreed in the lease setting out your requirements. It may be wise to agree a form of livery agreement that will be used. The agreement should set out the rules of use of the yard as well as any responsibilities that are to be passed on to the livery tenant. Having a clear agreement in a standard form will also help to ensure smooth running of the yard because all parties will be aware of what is included in their livery as well as what is expected of them. The agreement should also contain a provision to review the agreement at an appropriate interval so that any changes can be made at that point. Thought should also be given to any notice periods. Setting a standard notice period for liveries will help ensure that there is time to fill spaces and ensure that loss of rent is minimised.
If you are considering granting or taking a lease of equestrian property and would like further information, please contact a member of our commercial property team or the author Abi Rudd ([javascript protected email address]).
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