Agricultural Holdings Act 1986 Security Of Tenure

Under the Agricultural Holdings Act 1986 (‘AHA’) any tenancies created will allow agricultural holdings to be let by the land owner to a tenant. Agricultural holdings can include land and buildings used for horticulture, livestock, grazing and various other uses, but the use must be commercial in nature. Rent reviews under AHA tenancies are dealt with by the Act. These tenancies usually have lifetime security of tenure and those granted before 12 July 1984 also carry statutory succession rights, on death or retirement. This means a close relative of a deceased tenant can apply for succession to the tenancy within 3 months of the tenant’s death. In this article, agricultural holdings act 1986 security of tenure, we take a look at the process and mechanism involved.

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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.

Terminating an AHA Tenancy

Tenants of agricultural holdings under the AHA 1986 have the benefit of security of tenure and the circumstances under which a notice to quit can properly and effectively operate are reduced to very few. Any year to year tenancy must be terminated by a notice to quit. However, other tenancies of more than year to year or other fixed-term tenancies, or leases for life or very early tenancies (those granted prior to 1st January 1921) may not have security of tenure.

There is also the problem of succession rights, which operates to allow close relatives to assume the tenancy under certain statutory conditions, mostly on the death of a sole surviving tenant or the retirement of a tenant of a yearly tenancy – in both cases the successor must apply to the First-Tier Tribunal (Property Chamber) formerly known as the Agricultural Land Tribunal. However, succession rights are usually only confined to tenancies that were granted prior to 12th July 1984 – those granted after this date will only have succession rights if certain conditions are met as set out in Section 34 of the AHA 1986.

A statutory notice period of 12 months is normally required to terminate an agricultural holding although there are exceptions to this general rule. For example, if the tenant accepts a shorter period of notice and waves their statutory rights.

There are two types of notice to quit:

• unqualified notices and
• case notices.

Unqualified notices do not need to state the ground on which recovery of possession is required by the landlord although they will not be effective (unless the tenant serves no counter-notice) unless the Tribunal consents to the operation of the notice. If the tenant does serve a valid counter-notice, the notice to quit will only operate if certain conditions are met and the burden of proof lies with the landlord.

It should be noted that the Tribunal is more likely to refuse than allow a landlord’s application and the Tribunal can only permit consent where they are satisfied that one or more of the grounds relied upon by the landlord (as required to be stated in the tenant’s counter notice) are proved and section 27 (2) of the AHA 1986 is not applicable. This is a catch-all provision that allows the Tribunal to refuse consent even if all the other conditions are met if they feel the landlord would not be fair and reasonable to insist on possession.

Because unqualified notices to quit are so often prone to failure, many landlords use the approach allowed under Schedule 3 of the AHA 1986, which is to prove one of the cases for possession. There are 8 cases, labelled A to H, and landlords can rely on more than one to increase their chances. However, each case has stringent tests to prove validity which are, depending on the facts of the individual tenancy, difficult to meet. They can also be contested or challenged by the tenant by arbitration or, depending on the case relied upon, in court.

What are the grounds for Possession?

The AHA 1986 outlines the 8 specific grounds where a landlord can bring the tenancy to an end:

Case A: “the tenant has attained the age of sixty-five,….suitable alternative accommodation is available…or will be available for him.

Case B:   “the land is required for use, other than agriculture.”

Case C:   “the tenant… was not fulfilling his responsibilities to the farm in accordance with the rules of good husbandry.”

Case D:, “the tenant, has failed to comply with a notice…to pay rent due.”

Case E: “the commission had materially prejudiced the interest of the landlord in the agricultural holding by the tenant of a breach, which was not capable of being remedied.”

Case F:    “the tenant …had become insolvent

Case G:   “the death of a person who immediately before his death was the sole (or sole surviving) tenant

Case H: “the Minister certifies in writing that the notice to quit is given in order to enable him to use or dispose of the land for the purpose of effecting any amalgamation…”

The landlord has the opportunity to rely on more than one case notice to increase the likelihood of bringing an AHA tenancy to an end. However, ending a tenancy based on the grounds above tend to be onerous as there are stringent tests in place to test the validity of each case. Therefore, the burden is on the landlord to prove that the grounds for an AHA tenancy to be terminated have been complied with.

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.

Authored by Ben Posted in News Tagged as