Do you have an agricultural tenancy granted to you on or after 1 September 1995?

The law surrounding agricultural tenancies is often extremely difficult to navigate, and if you are a tenant farmer who has been served with a notice to quit by your landlord, you may be feeling anxious about the future, and possibly aggrieved.

But the first question you should ask is – is this notice valid?

The law distinguishes between those tenancies granted before 1 September 1995, and those granted on or after this date. In this article, we will consider those granted after.

Being served with a notice to quit

If your tenancy was granted after 1 September 1995, it is known as a ‘farm business tenancy’, or ‘FBT’, governed by the Agricultural Tenancies Act 1995 (“ATA 1995”).  The steps a landlord must undertake to terminate such tenancy will depend on whether it is a fixed term tenancy or a periodic tenancy.

  • A fixed term FBT of two years or less – no notice to quit is required, as it will expire upon the relevant expiry date.
  • A fixed term FBT of more than two years – the landlord must give at least 12 months’ written notice prior to the contractual expiry date as is stated in the tenancy. There is no particular form that this notice should take, though there are certain matters which should be included.
  • A yearly periodic FBT: this is a tenancy which runs by reference to a particular period of time, for example a weekly, monthly or yearly tenancy. To end such tenancy, a landlord must serve a notice, in writing, on a date at least 12 months before the date on which it is to take effect.

It is understandable that a tenant served with a notice to quit is going to be worried. It is always beneficial if you are familiar with your legal rights and responsibilities in this situation, and it is important that you react quickly.

So, what are your options?

Compensation

Whilst the types of compensation available under the ATA 1995 are certainly fewer, a tenant reaching end of term may be able to claim compensation for any ‘qualifying improvements’ undertaken on the land, during the term of their tenancy.  An improvement may include:

  • A physical improvement made to the holding; or
  • An intangible advantage made to the holding resulting from the tenant’s own effort or expense – for example, planning permission, a milk quota, environmental permits and licences etc.

In order to claim compensation, here are some of the requirements a tenant must satisfy:

  1. The improvement must remain on or attached to the holding;
  2. The improvement must have been made with the landlord’s written consent.
  3. Any claim for compensation must be made by written notice to the landlord within two months of the date the tenancy ends, the notice specifying ‘the nature of the tenant’s claim’.

The tenant is entitled to an amount of compensation equal to the increase the improvement has made to the value of the holding of the land. In effect, this will be the amount to which the improvement leads to a higher rent. This figure is often difficult to quantify and may require an expert valuation.

If you are an agricultural tenant who has been served with a notice to quit, and would like some advice on the options available to you, either to oppose the notice or to seek compensation, we are here to help you.

For further advice and support on agricultural tenancies, contact our Dispute Resolution team on 01756 799000, or alternatively email c.greenwood@mewiessolicitors.co.uk.