Horse tails (part two)

In this blog solicitor Andrew Carrier will clear up some misconceptions about horses and the law, in the context of grazing.

Most landowners will have informal arrangements with graziers but such arrangements may have unforeseen legal consequences.

A grazing arrangement will be one of four types:

– grazing licence (also known as a grass let or a grass keep)
– farm business tenancy (under the Agricultural Tenancies Act 1995 (ATA 955)
– grazing agreement or tenancy

The most common arrangements are the grazing licence and farm business tenancy.

The choice between the two may depend on factors such as whether or not it is important that vacant possession of the land can be obtained quickly, if the landowner needs to be in occupation of the land for tax planning or to avoid losing government entitlements to grants or payments.

However, a landowner will need to take care to understand the circumstances surrounding the arrangement because, if grazing is only incidental to the use of the land, a tenancy agreement may not be a farm business tenancy and there may be security of tenure issues under the Landlord and Tenant Act 1954 (LTA 54) (making it more difficult to get vacant possession of the land and the added possibility that the landowner will have to pay the grazier compensation on quitting).

The following checklist will help identify the legal status of the grazing arrangement:

Does the grazier have exclusive possession?

– If no, the arrangement will probably be a simple licence.
– If yes, the arrangement will be a tenancy (in which case the next question will have to be considered).

How is the land used?

– Private grazing not connected with a business will be a common law tenancy not covered by the ATA 95 or the LTA 54.
– Grazing in connection with a business will be a farm business tenancy as long as the land is bare land (there must be no buildings on the land for livery or riding school purposes).
– Grazing which is incidental to another main use (such as a riding school or for exercising horses) will not be a farm business tenancy it will be a business tenancy under the LTA 54.

If you think your arrangement may be covered by the LTA 54 you should consider a contracted out tenancy to avoid difficulties in getting vacant possession and having to pay the grazier compensation.

Andrew Carrier is a solicitor in the commercial department of our King’s Lynn office. Andrew has over 16 years of experience as a commercial solicitor.

by Andrew Carrier from the King’s Lynn office