Agricultural Tenancy Succession – advice for landlords and tenants
Although the ability to grant new secure Agricultural Holdings Act 1986 tenancies all but stopped in 1995, there are still an incredible amount of such tenancies or implied tenancies in operation, particularly in certain parts of Yorkshire with large landed estates or institutional landowners. It’s a niche area of work and very few now know the intricacies of the Act and what can and can’t be achieved on both sides of the fence.
The ability for future generations to succeed to tenancies granted pre ’84 is one of the significant benefits for the tenant and of course a downside to the landlord. For both parties, preparation is a key part, timescales are extremely tight and neither can afford to miss one.
Succession can occur on death or retirement of the current tenant. On death, the person wishing to succeed must make an application within 3 month of the date of death and if you fail to do it, you’ll miss the opportunity to succeed. I’d recommend that any tenant makes specific instructions in their will so it is not overlooked by the family. Similarly for a Landlord, they must serve a Notice To Quit (Case G) within 3 months of receiving written confirmation of the Tenants death. Don’t delay, if you are aware of the Tenants death, get the notice served straight away; failure may mean you lose the ability to serve a NTQ and the tenancy could end up being vested with the deceased Tenants estate/executors.
For a tenant, the onus is on them to prove to the Landlord and the Tribunal that they are both eligible and suitable to succeed. You need to be a close relative (you can’t skip a generation); secondly you can’t occupy another commercial unit – commercial unit means another farm in this context (there’s a calculation to work this out; if renting other land try and ensure it is for less than 5 years to avoid it being taken into account) and thirdly, your principle source of livelihood needs to come from the farm business or a business of which the holding forms a part. This last point is often overlooked until the last minute; a tenant needs to be careful of other earnings in the family, say from their partner who may have another job and could be seen to be the main earner or from other diversified income etc. It’s about planning and getting the paperwork right at least 5 years in advance. Similarly for a landlord, getting to grips with the earnings and where they come from is often the most important part of trying to challenge the application.
In reality, very few applications go to Tribunal as most tenants and landlords have a good working relationship and both plan in advance to ensure the smooth transition from one generation to the next. For me, a tenant and his son or daughter should be having those discussions early on with the landlord; most are more than amenable to a succession and would prefer to see the new younger blood come through with ideas; as they say it’s good to talk and importantly avoid conflict.
For more information or to discuss further contact Louis Fell on 07966 924345 or you can email on email@example.com.