Landowners at risk as unpaid rent not covered by lease terms
LAND OWNERS -- many of them elderly farmers and widows -- have been stunned to learn of the increased risk of being left 'high and dry' for their rental income under existing contracts with their auctioneers if a leasee defaults on payment.
The country's two principal auctioneers associations, IPAV and IAVI, have confirmed that rental payment is not guaranteed to vendors in the event of a leasee defaulting on payment, and the obligation is on the land owner to legally pursue the payment of the rental income.
The revelation runs contrary to the belief by the vast majority of those who lease their land through the auctioneering system that their income is assured. And many will be shocked to learn of this weakness in the system.
The auctioneers representative bodies have explained that while farmers who sell livestock through marts are guaranteed payment by the mart, the same guarantee does not extend to the letting of land.
As income from livestock farmers came under increased pressure over the past year, the number of cases of default on rental income have increased. And Farming Independent has learned that land owners are now being forced to personally initiate legal proceedings for rental income outstanding, after being advised by their auctionneers that no guarantee of payment existed in their contract and it was a matter for the land owner to pursue the leasee for payment.
Fintan McNamara, CEO, Institute of Professional Auctioneers and Valuers (IPAV), said that his members operate as "agents" for the letting of the land, and there is no guarantee of payment or obligation for the collection of the rent unless there is a specific contract with the auctioneer to include liability for rent collection.
"It is up to the land owner to clarify what the terms of engagement with the auctioneer are under their contract. Unless there is a specific contract the auctioneer is not responsible for the rent," he said.
He added that a review of the arrangements may be necessary but, "If auctioneers are to be responsible for the rental guarantee there may have to be an additional fee charged to the land owner".