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Changes to Agricultural Tenancies

This year sees the introduction of some long overdue changes to agricultural tenancy law. Tenancies under the Agricultural Holdings Act 1986 (AHA)  are the most likely to be affected but some newer Farm Business Tenancies (FBT) may still refer to the older legislation.

The Model Clauses, which govern default repairing and maintaining liabilities as well as insurance and replacement of fixed equipment obligations of pre 1995 tenancies will change from 1st October 2015. These were last reviewed in 1973 and do not mention newer issues such as slurry stores, central heating or portal frames.

The new regulations will include the following:

  • An increase in the tenant’s liability for slipped and cracked roof tiles and slates.
  • The tenant will be able to recover the full cost of replacement of items that are the landlord’s responsibility.
  • The landlord’s liability for electrical systems has been clarified and tenants will be liable for electrical fittings.
  • Tenants will be able to act on damaged underground water pipes

These changes are most likely to affect parties with unwritten tenancy agreements, those where the agreement states that the model clauses can be amended and new issues if they are not mentioned in the tenancy agreement. If the changes mean a landlord or tenant will take on a liability which was previously the other party’s responsibility, they will have only the month of October 2015 to submit a claim for compensation if the other party had not fulfilled their obligations before the change in responsibility. We recommend that landlords and tenants of AHA and FBT find and read their tenancy agreements ahead of October in case they are affected.

The new legislation will amend the end of tenancy compensation for short term improvements and tenant right matters under the AHA. The intention is that tenants can continue to look after the holding in the last few years of the tenancy, safe in the knowledge that they will be able to claim compensation.

There will be an option for parties to use final and binding third party determination for differences and disputes instead of arbitration under the AHA. This applies to disputes as to rent, compensation, model clauses and others but not notices to quit. It is hoped that this may be a quicker and cheaper option of resolving disputes.

If you would like to discuss any of these points please contact a Brown & Co Land Agent.