Written by John Turnbull, Chairman
Succession under the Agricultural Holdings Act 1986 does not arise all that often nowadays but a timely reminder of some useful pointers to protecting what you have might be useful. A tenancy under Agricultural Holdings Act 1986 is, after all, a valuable asset. So, if you are such a tenant or potential succession applicant please read our guidance below:
1. Do not wait for the landlord’s Notice to Quit - you have three months from the date of death of the tenant to make your application to the Land Tribunal, now known as the “First Tier Tribunal (Property Chamber) Agricultural Land and Drainage”. There is no leeway on this.
2. When the tenant dies, usually it is best practice to serve Notice on the landlord of the death as early as possible so that “the clock is ticking” on his two months’ time limit to service Notice to Quit on you.
3. If you can, if there is more than one potential successor, get the tenant and the family to agree before death who the nominated successor is to be, i.e. try and get him/her designated as such in the tenant’s will. This makes life easier after death.
4. Make sure any non-farming activities are consented by the landlord after 19 October 2006, otherwise you could fall foul of the livelihood test.
5. To give you the best chance of passing the livelihood test, arrange your business if possible so that the likely applicant is involved directly in agricultural work on the holding, not in nonagricultural work like driving wagons, contracting or running the farm shop.
6. Do not forget your Tenant’s Improvements and Fixtures. Either carry them forward into the new succession tenancy or make sure you service Notices of Claim to get your end of tenancy compensation - though they will then become the landlord’s, which will impact on the future rent.
7. Remember, even if the landlord is against you, it is down to the Tribunal to decide ultimately, so your case has to be as good as you can make it. But much better if you can is to arrange your succession by agreement with the landlord away from the expensive formalities of the Tribunal process.
8. An application on retirement of the tenant (rather than waiting for death) can often be effective, particularly as it can be withdrawn if it looks to be going against you, thus giving you a chance to correct any defects in your case. By contrast, you only get one shot at succession on death.
To find out more, contact any of our offices to discuss your needs.
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