Brown&Co are actively involved in the DEFRA Consultation for reform of the Agricultural Tenancy Law in England. The consultation ends at midnight on 2nd July. Find out more about the consultation and how the reform could affect your business.
DEFRA are currently undertaking a consultation regarding the reform of Agricultural Tenancy Law in England. This reform could remove barriers to productivity improvements and facilitate structural change in the tenant farming sector.
The consultation focuses on two key areas;
1. Change in the Agricultural Holdings Act (AHA) sector;a) A proposal for AHA tenancies to be assignable to a third party, subject to;
• the Landlord’s right of pre-emption to acquire vacant possession
• the Landlord’s approval of a proposed assignee
• the acceptance of a 25 year term at open market rentb) A proposed bar on succession rights when the Tenant reaches a certain age.
c) Proposed changes to the succession eligibility criteria;
• Repeal of the ‘commercial unit test’
• Improvements to the ‘suitability test’
• Proposals to extend the ‘close relative test’
2. Removing potential barriers to productivity and enabling investment and environmental improvements;a) Proposed removal of restrictive clauses in Tenancy Agreements that present a barrier to business development, productivity or environmental improvements, and in instances where the Landlord and Tenant cannot agree to vary the restrictive clause, the parties may be able to refer the issue to dispute resolution.
b) DEFRA are looking to encourage more Landlords to let land for in excess of ten years, and are looking at ways to enable shorter Notices to Quit (rather than the current statutory requirement of at least 12 months’ Notice) in circumstances of non- payment of rent, death of the tenant, or planning consent for non-agricultural use. DEFRA consider that the use of shorter Notices to Quit, in these circumstances, may encourage more Landlords to let land for longer terms.
c) In instances where Landlords invest in holdings for an agreed return payable by the Tenant; DEFRA are consulting on a proposal for this return to be ring-fenced, or excluded, from future rent reviews.
Brown&Co are actively involved in DEFRA’s consultation which ends at midnight on 2nd July. If you have an opinion on any aspect of Agricultural Tenancy Law, which is relevant to this consultation we would be pleased to hear from you.
Equally, we would be happy to advise on any issue of your land tenure arrangements, to ensure that you are best protected as UK Agriculture moves forward.
Mary Ralph MRICS FAAV
Land Agent, Divisional Partner