Wednesday, 24 Feb 2016

Can a verbal agreement create an Agricultural Tenancy?

Can a verbal agreement create an Agricultural Tenancy?

Unbeknown to many, a “formal” agricultural tenancy can in theory be verbally agreed- allowing an occupier a tenancy with strong rights of occupation. These ‘verbal agreements’ are often overlooked by tenants and landlords.

If a tenant has a right of occupation and they are asked to vacate, they may not be aware that they do actually have rights. Similarly a landowner may have a similar misconception and not believe someone upon their land has a right of occupation when considering a land sale and therefore not mention it to their professional advisers.  This can cause considerable delay or even cause a transaction to abort.

The area of land involved does not have to be large- it can be anything from a few square metres behind a house or a roadside verge, to several hundred acres and a full dairy unit.

If a tenancy does exists then it is important to determine the type of tenancy you are dealing with, which is generally done by establishing the start date of the agreement.  If the occupier was on the land prior to 1 September 1995 they may well have an Agricultural Holdings Act Tenancy (“AHA”) which will mean they have security of tenure (that is to say, a right to remain on the land) for at least their lifetime.

If they have been in occupation prior to 12 July 1984, they and two successors in title (for example a child and grandchild) are likely to have security of tenure.  If you have an AHA then there are very limited circumstances where possession can be obtained without agreement and such agreement can prove costly to a landowner.

If the land has been occupied from a date after 1 September 1995 it will likely mean that there is a Farm Business Tenancy.  This means that 12 months’ notice from the start date of the tenancy will need to be correctly given.  In reality this can mean that nearly 2 years’ notice is required.  This makes a considerable difference to both landowners and tenants alike.

Establishing start dates and determining the type of agreement you are dealing with is often a bewildering process and therefore in order to limit the possibility of accidentally granting security of tenure, It is advised that you seek further advice and information if you are reviewing either existing or new agricultural tenancies.

It is essential that any agreement for occupation (including short term grazing and / or a Licence) is put in writing to set out the terms of the agreement before access is given.  If it is not put in writing prior to giving access it is very difficult to prove what was agreed and this can lead to considerable problems in the future.


If you have found yourself in a confusing situation with regards to agricultural tenancy, we recommend that you speak with our Agricultural Specialist Rachel.  Please call 01756 799 999 or email Rachel.blandford-newson@awbclaw.co.uk


Rachel Blandford-Newson

Agricultural Specialist/ Legal Executive

Tel: (01756) 692 882

Email: Rachel.blandford-newson@awbclaw.co.uk

 

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