A tenant under an Agricultural Holdings Act 1986 tenancy is entitled to compensation at the end of the term of the tenancy, including on the expiry of a valid Notice to Quit served by the Landlord. Consequently, it is advisable to take into consideration the level of compensation to which a Tenant is entitled when a Landlord is considering whether to seek to bring a tenancy to an end. In this article, agricultural holdings act 1986 end of tenancy compensation, we take a look at the process and mechanism involved.
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For a free initial discussion on how we can advise you on a tenant’s right to compensation at the end of a tenancy under the agricultural holdings act 1986, get in touch with us today. We will review your situation and discuss the options open to you in a clear and approachable manner. Early expert legal assistance can help avoid the stress of dealing with these issues on your own. Simply call us on 0345 901 0445 or complete our online enquiry form and a member of the team will get back to you.
Can anyone grant a tenancy under the act?
Any landowner can grant an AHA tenancy.
The tenant under an AHA tenancy may have succession rights, i.e. when the tenant dies or retires, a close relative may take on the tenancy. Applying for succession stops any notice to quit given by the landlord on the tenant’s death.
In some circumstances, two tenancies by succession can be granted, so it’s possible for the tenant’s family to work the holding for 3 generations. Farmers with a tenancy granted before 12 July 1984 can also name an eligible successor such as a close relative who can apply to take over the holding when they retire. For this to come into effect, certain criteria must be met.
Only tenancies created before 31 August 1995 can be AHA tenancies. Except in limited situations, it is not possible to create new AHA tenancies now, although previously unwritten tenancies can still be put into writing. Only tenancies created before 12 July 1984 carry succession rights. AHA tenancies have to be for a term of years or run from year to year.
It should be remembered that tenancies can be written or unwritten, although greater clarity on the terms of the agreement comes from having the tenancy in writing.
Rights to compensation at the end of the tenancy
Most tenancy agreements made prior to 1 September 1995 are subject to the Agricultural Holdings Act 1986. These are often referred to as 1986 Act tenancies, ‘full agricultural tenancies’, or Agricultural Holdings Act tenancies. Landlords and tenants under a 1986 Act tenancy have the right to a rent review every three years.
Tenants under a 1986 Act tenancy are entitled to receive compensation at the end of the tenancy for any major long-term improvements and short-term improvements that they have made, any ‘tenant rights’, and for the use of any special system of farming which benefitted the farm. The amount of compensation is determined in relation to the value by which the farm increased as a result of the improvements.
Major long-term improvements may include the erection or alteration of buildings, the construction of roads, bridges or silos, the planting of orchards, the creation of or planting of water meadows and the repair of fixed equipment.
Short-term improvements may include measures to protect fruit trees from damage by animals, the burning of clay, and the liming and chalking of land.
A ‘tenant right’ may include the value of any crops growing when the tenancy ends, the cost of husbandry, for example, the cost of sowing seeds, and compensation for disturbance where a landlord terminates a tenancy.
Landlords can claim compensation from their tenants for any disrepair. This will normally be determined by reference to the repairing costs.
How We Can Help
Our team is well versed in dealing with all the various aspects of the agricultural holdings act 1986, and we are here to help in any way we can.
We will explain clearly the legal issues and provide open, honest and professional advice.
How to Contact our Agricultural Law Solicitors
It is important for you to be well informed about the issues and obstacles you are facing. However, expert legal support is crucial in terms of reducing risk, saving you money and ensuring you achieve a positive outcome.
To speak to our Agricultural Law solicitors today, simply call us on 0345 901 0445, or allow a member of the team to get back to you by filling in our online enquiry form. We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.