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More powers to tenants

Some good news for tenants: retirement and succession made easier

Written by Vicky Phillips

Years of lobbying by the Tenant Farmers Association (TFA) has finally resulted in successful amendments to The Agriculture Act to make retirement and succession under old farming tenancies easier.

Here’s a few areas that have changed since the Act become law a few months ago.

Retire early

Previously an Agricultural Holdings Act tenant had to be at least 65 years old before their successor could apply to the tribunal. That’s now gone, and tenants are given greater freedom and can retire at any age. Coupled with the talked about BPS retirement fund this could fuel early retirement and form part of a succession package.

Succession tests simplified

The “Commercial Unit” test has gone.

Previously to succeed the tenancy on retirement or death, the incoming tenant had to prove they did not already occupy (rent or own) a Commercial Unit, being of a scale to support two full-time agricultural workers elsewhere. This often restricted tenants that wished to expand. By taking this away it ensures the next generation of farmers are free to expand and run productive and successful business without limits whilst retaining their ability to take over the tenanted farm on death or retirement.

Good news for tenants – not so good for landlords. Particularly landlords of smaller blocks forming less vital parts of tenant’s future businesses. Previously rights of succession may simply have been given up on these smaller parcels, but now, why would you? It’s likely there will be more deals to be done when succession comes around.

Suitability Test

The successor now needs to show they can farm “commercially to high standards of efficient production and care for the environment”.

Other measures of “suitability” include the landlord’s opinion and the tenant’s experience, age, health, and financial standing.

No matter what side of the fence you’re on, these changes impact you as the landlord or the tenant, or the next generation looking to succeed.

Our team are experienced in sensitively advising on all aspects of agricultural tenancies.

For a confidential discussion, please give us a call on 01233 506201.

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