What landowners need to know before terminating an agricultural tenancy

Partner and Rural Disputes specialist at Coodes Solicitors, Abi Lutey, outlines some of the issues landowners will need to consider if they want to terminate an agricultural tenancy.

If you decide to terminate an agricultural tenancy on your land, it is important to, first of all, understand which type of agricultural tenancy you hold.

A tenancy granted before 1st September 1995 is referred to as an Agriculture Holding and those let after 1st September 1995 are usually Farm Business Tenancies. Tenants have different rights, depending on which tenancy is in place.

How do I terminate an Agricultural Holding tenancy?

With only a few exceptions, Agricultural Holdings granted before 1st September 1995 will be governed by the Agriculture Holdings Act 1986. These type of tenancies are notoriously difficult to bring to an end as tenants, more often than not, will have statutory protection.

If the tenancy was granted before 12th July 1984, the tenant is also likely to have succession rights. That means certain criteria must be met and notices served within a strict timetable.

Generally a statutory period of at least 12 months must be given to terminate an Agricultural Holding tenancy. This type of tenancy has security of tenure, which means they can only be terminated by a certain circumstance where a notice to quit must be given. There are two types of notice that may be served:

• An unqualified notice means that a landlord does not need to give a reason, though this could be challenged in the First Tier Property Tribunal.
• A qualified notice allows the landlord to rely on one of eight grounds set out in Section 3 of the Agricultural Holdings Act 1986.

Remember that tenants of Agricultural Holdings tenancies will likely qualify for compensation for any improvements they have made to the holding during the tenancy. Further if a landlord serves a qualified notice the tenant may also be able to recover compensation equivalent to up to four years’ rent.

How does terminating a Farm Business Tenancy differ?

A Farm Business Tenancy tenant, on the other hand, has no rights to renewal or succession and no security of tenure. However, there are strict criteria around giving a tenant notice.

If a farm business tenancy is for a term of more than two years it must be terminated in accordance with the Agricultural Tenancies Act 1995. The type of notice will depend on whether the tenancy is for a fixed term or a yearly periodic tenancy.

Notice must be given in writing at least 12 months and end on last day of the term. The consequences of getting a notice wrong may lead to having re-serve a notice and waiting at least a further 12 months to recover possession.

This is a complex area of law and there are many potential pitfalls for landowners. Seek legal advice to ensure you follow the correct process.

For more information on this issue contact Abi Lutey in Coodes Solicitors Rural team on 01872 246230 or abi.lutey@coodes.co.uk