Do you farm land as a tenant? Do you know what type of tenancy you have?

If you rent agricultural land, it is likely that you have an agricultural tenancy of some kind. There are a number of variations of agricultural tenancies but these can be broadly separated into two groups- those agreed before 1st September 1995 and those agreed after 1st September 1995.

Tenancies agreed prior to 1st September 1995- known as 1986 Act Tenancies.

Generally these tenancies will have security of tenure and carry statutory succession rights, on death or retirement, provided that the successor meets certain eligibility criteria. A close relative of a deceased tenant may be entitled to apply for succession to the tenancy. Any application for succession MUST be made within three months of the deceased tenant’s death. If you are a potential successor it is vital that you obtain advice from a solicitor. Your solicitor can then check whether this might be a 1986 Act Tenancy and advise whether any notice should be served.

Tenancies agreed after 1st September 1995- known as Farm Business Tenancies.

Farm Business Tenancies will slowly replace 1986 Act Tenancies. They allow landlords much greater flexibility to obtain possession back of his property. Farm Business Tenancies can be bought to an end after the expiry of any fixed contractual term exceeding two years on at least twelve months but not less than twenty four months notice in advance. Landlords and tenants can agree longer periods of notice in a tenancy agreement but the statutory minimum will continue to apply.

Different rules apply to each type of tenancy in relation to rent review provisions and end of tenancy compensation.

You should know what type of tenancy you have. Lack of a written tenancy agreement may not be fatal to a claim to either. The type of tenancy you have will affect how you carve your successions plan. Ask yourself now; what happens when I die? Can I leave my tenancy to my children?

It may be that you do not farm as an individual but as a partnership or a company, in which case there are different considerations. Do you need a partnership agreement or a shareholders agreement? Speak to your agent, your accountant and your solicitor sooner rather than later- a good team around you can help you make the best of your business and help make things easier for your family when you are gone.

by Jenny Rushmer from the Wisbech office