Agricultural tenancy
Contents |
[edit] Introduction
An agricultural tenancy is a type of business lease when a party rents agricultural land or buildings to run a farm business. The two most commonly used types of agricultural tenancies are full agricultural tenancies (FATs) and farm business tenancies (FBTs).
[edit] Full agricultural tenancies
FATs are agricultural tenancy agreements made before 1 September 1995. They are also known as Agricultural Holdings Act tenancies (AHAs) or 1986 Act tenancies, since they are governed by the Agricultural Holdings Act 1986.
Under the 1986 Act, both parties to the agreement are entitled to a rent review every three years. This period may be adjusted if land is added to - or removed from - the tenancy.
FATs typically offer lifetime security of tenure as well as certain rights granted to tenants. For arrangements made before 12 July 1984, FATs have certain succession conditions. Should the tenant die, a close relative may be able to take on the tenancy if an application is made within three months of the original tenant’s death. Under this condition, succession can only be passed along twice. If the tenant wishes to retire, it is possible to name a close relative as a successor to take over the tenancy.
Should tenants make significant long- or short-term improvements during the period of the arrangement (and with the approval of the landlord), they may be entitled to compensation at the end of the lease. The amount is generally based on the increase in value of the property due to the improvement.
The landlord may be entitled to compensation if the tenant was responsible for damage to the property. This amount is usually based on the cost of repairing the damage.
Disputes relating to 1986 Act tenancies are generally dealt with by the Agricultural Land Tribunal.
[edit] Farm business tenancies
FBTs are agricultural tenancy arrangements made after 1 September 1995. They are governed by the Agricultural Tenancies Act 1995 (ATA 1995) and are deemed FBTs under certain conditions, including:
- If all or part of the land is continuously used for trade or business during the tenancy.
- At least part of the land is farmed during the tenancy.
- Both the landlord and tenant exchange declarations of the intended agricultural use of the property (which should be its primary and continuous purpose) before the tenancy begins.
Under the s.38 of the ATA 1995, agriculture is defined as including:
“…horticulture, fruit growing, seed growing, dairy farming and livestock breeding and keeping, the use of land as grazing land, meadow land, osier land, market gardens, and nursery gardens, and the use of land for woodlands where that use is ancillary to the farming of land for other agricultural purposes.” Livestock includes "any creature kept for the production of food, wool, skins or fur or for the purpose of its use in the farming of land".
Note that the grazing, keeping and breeding of livestock is only deemed as agricultural if the animals are used to work on the farm or are sold for their meat or skins. This does not apply to animals that are used for recreational purposes (except in certain circumstances where the care and grazing may take place on the agricultural land but the recreational activities take place elsewhere) or non-business activities.
The tenant may be permitted to change the land to non-agricultural use if a notice stating this intention has been properly submitted in advance and granted by the landlord. If the tenant fails to do so and no longer complies with the agricultural parameters of the FBT, the arrangement could then be covered under another type of business leasing arrangement.
Generally, FBTs are more informal than FATs; this is meant to encourage diversification. They also tend to have fewer restrictions regarding formal requirements. For example, an FBT does not necessarily have to be a written agreement between a landlord and a tenant, since they may occur through informal arrangements such as grazing licences.
In FBTs, rent arrangements are decided by the landlord and the tenant. This includes the period between reviews as well as rent levels.
An FBT can be terminated by issuing a notice to quit at least 12 months in advance. The maximum notice period can be agreed upon in writing by the landlord and tenant.
Compensation arrangements for improvements made are similar to those under FATs. The parameters of the amount of compensation can be agreed upon in writing in advance.
Disputes relating to FBTs are generally dealt with through third-party expert determination or arbitration procedures.
[edit] Related articles on Designing Buildings
- Agriculture.
- Landlord.
- Landlord and Tenant Act.
- Permitted development rights for the change of use of agricultural buildings.
- Permitted development: The end of the high street or a blessing in disguise?
- Scottish Land Reform Bill.
- Security of tenure for commercial leases.
- Tenant.
[edit] External resources
- Legislation.gov.uk, Agricultural Holdings Act 1986.
- Legislation.gov.uk, Agricultural Tenancies Act 1995.
Featured articles and news
Boiler Upgrade Scheme and certifications consultation
Summary of government consultation which closes 11 June 2025.
Deputy editor of AT, Tim Fraser, discusses the newly formed society with its current chair, Chris Halligan MCIAT.
Barratt Lo-E passivhaus standard homes planned enmasse
With an initial 728 Lo-E homes across two sites and many more planned for the future.
Government urged to uphold Warm Homes commitment
ECA and industry bodies write to Government concerning its 13.2 billion Warm Homes manifesto commitment.
Places of Worship in Britain and Ireland, 1929-1990. Book review.
The emancipation of women in art.
CIOB Construction Manager of the Year 2025
Just one of the winners at the CIOB Awards 2025.
Call for independent National Grenfell oversight mechanism
MHCLG share findings of Building Safety Inquiry in letter to Secretary of State and Minister for Building Safety.
The Architectural Technology Awards
AT Awards now open for this the sixth decade of CIAT.
50th Golden anniversary ECA Edmundson awards
Deadline for submissions Friday 30 May 2025.
The benefits of precast, off-site foundation systems
Top ten benefits of this notable innovation.
Encouraging individuals to take action saving water at home, work, and in their communities.
Takes a community to support mental health and wellbeing
The why of becoming a Mental Health Instructor explained.
Mental health awareness week 13-18 May
The theme is communities, they can provide a sense of belonging, safety, support in hard times, and a sense purpose.
Mental health support on the rise but workers still struggling
CIOB Understanding Mental Health in the Built Environment 2025 shows.
Design and construction material libraries
Material, sample, product or detail libraries a key component of any architectural design practice.
Construction Products Reform Green Paper and Consultation
Still time to respond as consultation closes on 21 May 2025.
Resilient façade systems for smog reduction in Shanghai
A technical approach using computer simulation and analysis of solar radiation, wind patterns, and ventilation.