One of the reasons for the introduction of the Agricultural Tenancies Act 1995 (“the 1995 Act”) was to counter some of the more burdensome provisions imposed by the Agricultural Holdings Act 1986 (“1986 Act”), not least the difficulty of terminating tenancies.
The rights relating to the security of tenure and succession under the 1986 Act were so onerous that most landlords chose to let their land via licences (although a number of these were converted into AHA tenancies). Unfortunately, licences did not offer tenants the long term certainty required to establish a farming business, and the agricultural sector suffered as a result.
Although the creation of Farming Business Tenancies (FBT) under the 1995 Act has redressed that problem, many AHA tenancies continue to exist, largely because the security of tenure and succession rights enjoyed under the 1986 Act makes the termination of such tenancies difficult.
What qualifies for an AHA tenancy?
Only a lease of an “agricultural holding” of land and/or buildings for agricultural use qualifies as an AHA Tenancy. To receive protection under the 1986 Act, the AHA tenancy must be let for a number of years or alternatively from year to year. However, Section 2 of the 1986 Act allows short tenancies or licences of less than a year to be statutorily converted into a yearly tenancy and receive the protection under the 1986 Act unless those short tenancies or licences obtained prior ministry approval. In reality, ministry approval was rarely obtained, and many informal or short-term licences and tenancies have since acquired protection under the 1986 Act.
Terminating an AHA tenancy
The grounds upon which an AHA tenancy may be terminated are specified in the 1986 Act and are complicated. The burden is on the landlord to ensure he can comply with those grounds specified in the 1986 Act.
To terminate an AHA tenancy, a landlord must serve a notice to quit under Section 25 of the 1986 Act. If the tenant is unwilling to accept the notice to quit, he may serve a counter-notice under Section 26(1) and in doing so refer the notice to quit to the First Tier Tribunal (“the Tribunal”) or, if appropriate, the Agricultural Land Tribunal (Wales). The Tribunal will have to decide whether to consent to the landlord’s notice to quit, having regard to the conditions specified in Section 27(3) of the 1986 Act. Specifically, the Tribunal will have to establish that the landlord’s proposal to terminate the AHA tenancy is in the interests of :
- good husbandry;
- sound management;
- agricultural research;
- greater hardship; or finally,
- non-agricultural use.
The Tribunal may also refuse consent if “in all the circumstances it appears to [the Tribunal] that a fair and reasonable landlord would not insist on possession”.
Cases for Possession
If the landlord cannot satisfy the requirements of Section 27, the landlord may look to establish one of the ‘Cases for Possession’ under Schedule 3 of the 1986 Act, to persuade the Tribunal to allow the landlord to bring the tenancy to an end. Those cases are:
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…”
To increase their chances of bringing an AHA tenancy to an end, a landlord can issue more than one case notice, in addition to a notice to quit. However, the reality is that establishing one of the cases for possession is onerous, and the procedure rules must be strictly followed. The tenant is likely to challenge the notice. The circumstances of the tenant’s occupation and the use of the holding will be important in determining the landlord’s prospect of success.
In summary, tenancies under the 1986 Act continue to exist because they are difficult to terminate, and because tenants have powerful rights of succession, allowing their close relatives to succeed them. Ultimately, the landlord’s rights to terminate an AHA Tenancy and the tenant’s rights of succession depend upon the circumstances of each case.