Agricultural law cannot affect me, can it?

5th January 2009

Simon James, Director at Ansons Solicitors, provides guidance on agricultural tenancy law.

If you are reading this article in an office or on an industrial estate, you may well think that agricultural tenancy law is never going to affect either you or your business. Be warned, it could!

For the last thirty years I have advised landowners about the rights of occupation of people using agricultural land and when someone says to me something like “Oh yes, some old farmer keeps a few cattle on my field/the field I am buying with my new house/the field the company owns next to its premises' all the alarm bells ring very loudly!

Faced with such a statement, the starting point is to ascertain whether or not there is a written tenancy agreement or anything in writing which sets out the terms of occupation. Nine times out of ten, in my experience, there will be nothing in writing because no-one ever thought that a tenancy was being created.

If someone has been in occupation of land for agricultural purposes for a period commencing prior to September 1 1995, then there is every possibility that the tenancy is protected by the Agricultural Holdings Act 1986. Such a tenancy cannot be brought to an end unless the landlord gives to the tenant at least twelve months notice expiring on the last day of a period of the tenancy.

Even if a landlord serves a notice to quit on this basis, provided a tenant adopts the correct procedure on receipt of the notice, the tenancy will not come to an end at the expiry of the notice unless, broadly, the landlord can prove that (a) the tenant has failed to pay the rent, (b) breached the terms of the tenancy or (c) the Landlord has obtained planning consent for an alternative use for the property.

It is possible also to obtain possession if the landlord would suffer greater hardship by the tenancy continuing than the tenant would suffer by losing the tenancy. It is difficult for a landlord to prove this ground.

If the landlord cannot prove one of these grounds, then the tenant remains in occupation. Thus, if the tenancy is protected by the Agricultural Holdings Act 1986, the tenant has a tenancy for life. In certain circumstances, members of his family can also succeed to that tenancy and thus it is possible for a landlord to lose the right to use his land for very many years indeed.

If the tenant first used the land for agricultural purposes on or after September 1 1995, then the tenancy may be protected by the Agricultural Tenancies Act 1995. These tenancies are called “Farm Business Tenancies”. If they are in writing the agreement will set out whether or not the tenancy is from year to year or for a fixed period. Either way the tenancy can be terminated by the appropriate notice and after the expiry of the notice the Tenant will have no further right of occupation.

Again, however, often these tenancies are not in writing. If they are not in writing, then the tenant is treated as a tenant from year to year, so that his tenancy can be terminated on not less than twelve months written notice expiring on the last day of a period of the tenancy. Subject to the notice being given in the correct form, then at the expiry of the notice the tenant will have no further right of occupation.

Landowners need to be most concerned about tenancies which commence before September 1 1995 because of the considerable security of tenure that attaches to them. Many times I have been involved in acting for either a landowner or farmer, where a landowner has been desperate to obtain possession of land for some reason, often to do with the sale of a property, and the tenant has asserted his statutory rights with the landlord having no possibility of being able to bring the tenancy to an end on one of the statutory grounds. The only answer then has been for the landowner to reach for his cheque book and negotiate a settlement with his tenant.

Even with a farm business tenancy whilst you know you will secure possession there are nevertheless circumstances where the landlord requires possession urgently and, again, has had no alternative but to reach for his cheque book.

So when you next think that agricultural tenancy law could not possibly affect you or your business, bear in mind these warnings! If you have a tenant on your land already and there is no written tenancy agreement, you need to take steps to put in place a tenancy agreement, so that everybody is clear of the basis on which the tenant occupies the land. If someone comes along wanting to use your land then, unless you are prepared to run the risk of having to reach for your cheque book when you want vacant possession, you need to take advice and have a written tenancy agreement.

You have been warned!