Get off my land - Gateley Plc

1 get off my land ! Terminating agricultural tenancies Autumn 2016. We are all familiar with the stereotypical image of a farmer The distinction between Agricultural Holdings and FBT's is shouting get off my land !' However, housebuilders crucial, as Agricultural Holdings are far more difficult to acquiring greenfield sites will often find that the boot (or terminate than FBT's. wellie) is on the other foot. Greenfield sites almost Is the tenancy an Agricultural Tenancy? invariably include agricultural land , and so it will be the Before looking at how to terminate Agricultural Holdings or housebuilder telling the farmer to get off my land !', so that FBTs, it is important to be clear if the tenancy is an it can obtain vacant possession and start developing the agricultural tenancy. To qualify, the tenancy must satisfy land . two key criteria: This, of course, has to be done properly.

2 If the farmer is 1. The land must be used for agriculture; and the landowner, then this will be straightforward, he will give vacant possession of the land . However, if the land 2. The agriculture must be carried out for the purposes of has been let out for agricultural purposes, gaining vacant a trade or business. possession is far more complicated and, in certain Agriculture includes the following activities: circumstances, may take up to two years. Livestock farming;. Agriculture is a business run on a year to year basis. Dairy farming;. Accordingly, most agricultural tenancies are year to year tenancies , which must be terminated with not less than 12 Horticulture; and months' notice. That 12 months' notice usually has to end Use of land as grazing land . on the end date of the tenancy. Note that the keeping of horses on land is not agriculture, In addition, agricultural tenancies enjoy statutory as horses are not livestock'.

3 Protection, most notably under the Agricultural Holdings Act 1986 (AHA 1986) and the Agricultural tenancies Act How to terminate an Agricultural Holding 1995 (ATA 1995). This statutory protection means that it An Agricultural Holding tenancy must be terminated by a can be difficult and time consuming to terminate an valid notice to quit. A valid notice must give at least 12. agricultural tenancy. months' notice from the end of the then current year of the tenancy. This requirement cannot be contracted out of. Agricultural tenancies fall into two categories: So, by way of example, if the tenancy year ends on 30. 1. tenancies granted before 1 September 1995. These November and you want to terminate it on 30 November are governed by AHA 1986 and are known as 2017, you must give the notice to quit by 29 November Agricultural Holdings; and 2016 at the very latest. If you serve the notice after 29.

4 2. tenancies granted on or after 1 September 1995. November, then the tenancy will not end for a further year These are governed by the ATA 1995 and are known not until 30 November 2018. as Farm Business tenancies (FBT's). Having said this, there are a few limited exceptions to the Note that an agricultural tenancy does not have to be in 12 month notice requirement where a shorter notice writing to enjoy the protection of AHA 1986 or ATA 1995, period will be valid (a short notice). The important it can be oral or implied. exception as far as housebuilders are concerned is where there is a provision in the tenancy agreement authorising get off my land ! Terminating agricultural tenancies the resumption of possession of the holding (or part of it) To succeed with Case B, the housebuilder will have to for a purpose other than agricultural use ( for have obtained planning permission (outline planning residential development).)

5 If there is such a provision, the permission will suffice). If it has not yet obtained planning notice period can be shorter, but no less than two months permission, then it must rely on an unqualified notice. in any event. So it is crucial to check the tenancy A tenant can challenge termination under Case B but this agreement to see whether there is such a provision, will be by arbitration, rather than determination by the ALD. because it could save you a great deal of time. Tribunal. Whether it is a 12 months' notice to quit, or a short notice, Compensation a notice to quit must be in the form of either an Housebuilders should note that, on top of the notice Unqualified Notice or a Case Notice. Both are prescribed requirements, they will also have to pay the tenant notices under AHA 1986. compensation if they terminate the tenancy by an (I) Unqualified Notice Unqualified Notice or Case Notice.

6 With an Unqualified Notice, the landlord does not have to How to terminate a Farm Business Tenancy specify a reason for terminating the tenancy. However, Terminating FBT's is far more straightforward than the tenant can then serve a counter-notice challenging it. terminating Agricultural Holding tenancies . The matter will then have to be determined by the First Tier Tribunal (Property Chamber), Agricultural land and For the purposes of termination, FBT's falls into two Drainage (the ALD Tribunal). The ALD Tribunal will only categories: consent to the termination if one or more specific grounds A fixed term FBT of more than two years this must are satisfied. These include grounds such as good be terminated by either party giving at least 12 months'. husbandry and sound estate management. However, the written notice to the other, with the notice expiring on relevant ground as far as housebuilders are concerned is the last day of the tenancy.

7 However, if the FBT is not non-agricultural use'. validly terminated, it will continue as a statutory Non-agricultural use is where the landlord proposes to periodic tenancy from year to year. To end such a terminate the tenancy for the purpose of the land being periodic tenancy, the landlord must give at least 12. used for a use other than for agriculture (this would months' notice before the end date of the periodic include use for residential development) which does not tenancy; and fall within Case B'. Case B is one of the grounds used for A fixed term FBT of two years or less - this will expire Case Notices (see below) and includes where planning by effluxion of time on the term date. No notice to quit permission has been granted for the non-agricultural use. is required. What this means for housebuilders is that they will probably have to use an unqualified notice when they The landlord does not have to give grounds for have not yet obtained planning permission.

8 Termination, as it does have to for Agricultural Holding tenancies . An unqualified notice is therefore a risky and time- consuming business, as it will take some time for the Arrangements that are not Agricultural Holdings or matter to be determined by the ALD Tribunal. However, if FBT's the housebuilder has not actually obtained planning There are certain arrangements that do not qualify as permission yet, it may be the only option. Agricultural Holdings or FBT's. Examples are: (II) Case Notice Grazing licences;. Where a landlord serves a Case Notice, the tenant does Equine business (these are business tenancies and not have the right to serve a counter notice and the matter will enjoy their own statutory protection);. will not come before the ALD Tribunal. However, as the name suggests, the notice must state a Case'. There are Where the use is non-business, for example grazing a eight Cases, A to H.

9 These include bad husbandry, failure family horse;. to pay rent or remedy a remediable breach, irremediable Non-business use; and breach, insolvency, and death. However, it is likely that land farmed under a partnership, contract farming or the Case that will be used by housebuilders is Case B, share farming arrangements. non-agricultural use. get off my land ! Terminating agricultural tenancies Conclusions insolvency etc), the housebuilder/landowner should If a housebuilder is looking to purchase agricultural land , it consider forfeiting the lease; or must investigate whether there are any agricultural 2. Negotiate a surrender with the tenant. This would, of tenancies at the earliest possible stage. Even if there is no course, involve compensating the tenant but it may written agricultural tenancy agreement, there may be an turn out to be less costly, and certainly less time oral or implied tenancy.

10 Consuming, than serving notice. If the tenancy was granted before 1 September 1995, it Terminating FBT's is far more straightforward. However, will be an Agricultural Holding tenancy and the the housebuilder/landowner will still have to get the notice housebuilder (or landowner where the housebuilder has procedure right. If it does not, it may be stuck with an not yet purchased the land ) will have to get the notice agricultural tenancy for a further 12 months. procedure going as soon as possible. This can be a long process, especially if the housebuilder has not obtained If you would like to discuss any of the issues raised in this planning permission and therefore has to rely on an update, please contact: unqualified notice. In addition, the housebuilder or : landowner will have to compensate the tenant where it succeeds in terminating the tenancy. Indeed, the procedure for terminating Agricultural Holding tenancies is so complicated and time consuming that it is well worth the housebuilder considering other ways to terminate the tenancy which do not attract statutory protection.