(J.M.) WHAT OPTIONS DO FARMERS HAVE WHEN IT COMES TO VACANT DWELLINGS ON FARMLAND?
(N.M.) When it comes to dealing with a home or dwelling on farmland (other than your primary residence), farmers have options — leave it vacant, rent it out, or demolish. Farm business owners often find themselves faced with these decisions after the purchase of additional farmland. While each situation is unique, decisions on what to do with extra dwellings are often based on personal, business, and legal factors. These could include considerations such as whether a family member wants to reside in the dwelling in the future, relevant by-laws in your municipality, a willingness to invest in the maintenance of the home, how comfortable the new owners are with renting the property, and how the dwelling may or may not affect the re-sale value of the property.
Before getting into the various options available, we need to define the terms. Legally speaking an unoccupied home is defined as a home that the owner intends to return to and that is suitable for immediate occupancy. A vacant home is one that the owner has no intention of returning to.
Here are some business and legal considerations for the options available.
Option 1 – Leave the dwelling vacant
One of the biggest concerns about leaving a dwelling vacant is insurance. Most policies have a restricted number of days a home can be left unattended before the insurance policy is voided. Owners should consult their insurance company and discuss if specialized coverage is available for a vacant home.
Trespassers, squatters or other uninvited people are also a concern with uninhabited homes. Damages by these people may extend beyond the dwelling and include farmland, tools, machinery or other structures on the property.
Another concern is the cost to maintain a vacant dwelling. Most municipalities have by-laws on property maintenance standards and if an owner fails to abide by these standards, they could face enforceable action by their municipality.
• No upfront costs.
• Dwelling is available if owner wishes to occupy or rent it out later.
• Presence of dwelling may increase property value and make it easier to sell at a later date.
• Vacancy may void insurance policy.
• Could invite trespassers and lead to property damage.
• Owner must maintain property to minimum standards set by municipality, will incur costs to maintain.
Option 2 – Rent it out
If you have never been a landlord before you will want to brush up on your rights and responsibilities. Ontario’s Residential Tenancies Act, 2006 (www.ontario.ca/laws/statute/06r17) outlines the landlord and tenant relationship. Being a landlord can have serious legal implications, so be sure to consult a lawyer to discuss your obligations and potential risk as a new landlord.
The Landlord and Tenant Board offers resources and guides online (www.tribunalsontario.ca/ltb/) or at most Service Ontario locations. The website includes templates such as standard lease agreements (mandatory for leases beginning after April 30, 2018), a guide to lease agreements is available, and information including resources on late rent payments, damage to the unit, and evicting a tenant. The Residential Tenancies Act also offers information on understanding your rights and responsibilities as a landlord and Part III clearly outlines all the responsibilities of landlords.
• Provides extra source of income.
• Tenants have some obligation to maintain property.
• Presence of tenants will discourage trespassing, theft, property damage.
• As landlord, owner has responsibilities for property and tenant.
• Risk of tenant failing to fulfill their obligations and causing damage to property, which would be an expense of time and money for the landlord.
Option 3 – Demolish the dwelling
If you do not intend to return to the dwelling or rent it out, demolishing the home could be the most cost-effective option.
• Eliminates any maintenance costs.
• Eliminates responsibilities to building.
• Less appealing to trespassers and may reduce risk of theft or property damage.
• May increase workable farmland.
• Some upfront costs.
• No possibility of changing your mind.
• Lack of a dwelling may make it difficult to sell property in the future or decrease property value.