The process of reforming agricultural tenancy legislation under the Agriculture Act 2020 has now started with the introduction of the Agricultural Holdings (Transitional Provision) (England) Regulations 2021, which came into force on 17 March 2021. These regulations have amended the rules governing succession to an AHA tenancy by removing the commercial unit test for someone wishing to succeed to the tenancy, and the minimum age at which an AHA tenant can retire.
The suitability test will also be amended to require the successor to the tenancy ‘to farm the holding commercially to high standards of efficient production and care for the environment’. The additional tests of experience, competence, physical health etc will also be deployed as necessary in determining whether or not an applicant is a suitable person to take on the tenancy.
The Act also corrects an error made in 2015 to the 1986 Act which allowed the appointment of a third-party expert to advise on rent reviews but 12 months before the review was required thus requiring additional, unnecessary cost. This will now change and a third party expert, or arbitrator, can be appointed at any time up until the date of the review. It is worth noting that the pool of arbitrators has been expanded with both the Central Association of Agricultural Valuers (CAAV) and the Agricultural Law Association (ALA) joining RICS as approved appointment bodies.
Finally, the Act addresses some of the restrictive clauses in the 1986 Act which could prevent a tenant from carrying out necessary works on the farm in order to comply with the requirements under the new land management schemes, and thus be prevented from claiming payments under those schemes. The tenant has the right to seek a third-party determination to resolve the matter if the landlord objects to such works being carried out, or if a variation to the tenancy agreement is needed to allow the tenant to meet the regulatory requirements.
These changes are generally seen to be tenant-friendly and landlords, no doubt, will need to review their tenancy agreements and amend accordingly in advance of any challenges.
If you need any guidance on these changes, please contact our agricultural lawyers.
