There are two main types of agricultural tenancies. They are as follows:
- Agricultural tenancies which are subject to the Agricultural Holdings Act 1986;
- Agricultural tenancies which are subject to the Agricultural Tenancies Act 1995.
Agricultural tenancies subject to the Agricultural Holdings Act 1986
Most tenancy agreements made prior to 1 September 1995 are subject to the Agricultural Holdings Act 1986. These are commonly known as “1986 Act tenancies” or “full agricultural tenancies”.
Landlords and tenants who hold a 1986 Act tenancy can demand a rent review every three years.
1986 Act tenancies created before 12 July 1984 carry succession rights on the death or retirement of the tenant as long as the potential successor meets certain criteria. Close relatives of a deceased tenant can apply to succeed the tenancy within three months of the tenant’s death. Two tenancies by succession can be granted. This means that the grandchildren, for example, of the original tenant will be able to continue the farm business.
Tenants who have a 1986 Act tenancy are entitled to receive compensation at the end of the tenancy for any major long-term improvements and short-term improvements that they have made, any “tenant right” and for the use of any special system of farming which benefitted the farm.
Major long-term improvements may include the erection or alteration of buildings, the construction of silos, roads or bridges, the planting of orchards, the creation of or planting of water meadows and the repair of fixed equipment.
Short-term improvements may include measures used to protect fruit trees from damage by animals, the burning of clay and the liming and chalking of land.
“Tenant right” may include the value of any crops that are growing when the tenancy ends, the cost of husbandry, for example the cost of sowing seeds and compensation for disturbance where a landlord terminates a tenancy.
A special system of farming may include farming organically.
The amount of compensation is determined in relation to the value by which the farm increased as a result of the improvements.
Landlords can claim compensation against their tenants for any disrepair.
For more information on:
- Agricultural tenancies subject to the Agricultural Tenancies Act 1995