As a Real Estate Litigator, one of the things I am often asked to advise upon is how to gain vacant possession of agricultural land. Before doing that, the first job is to identify the agricultural occupier's precise legal interest. Is it a lease, or merely a licence? Is it for agricultural use? Could it be for business use?
Possible occupational interests
If the land definitely is let for agricultural purposes then (broadly speaking) there are two possible scenarios:
- the tenant occupies under an Agricultural Holding; or
- the tenant occupies under a Farm Business Tenancy (known as an FBT).
An agreement entered into before 1 September 1995 will generally be an agricultural holding, whereas an agreement entered into on or after 1 September 1995 will generally be an FBT. Whilst this article isn't intended to be a comprehensive review of the differences between the two, it is generally accepted that an agricultural holding brings with it more problems than an FBT
Ending an agricultural holding
The principal problem with agricultural holdings is that they can bring with them all sorts of implied rights - such as succession rights on the death of the original tenant and compensation payable where the landlord serves a notice to quit. The other main problem with them is that they are not straightforward to bring to an end. A landlord is only entitled to terminate the lease in certain circumstances and (especially where the tenant is clued-up on their rights) it can be a long and drawn-out process.
Ending a FBT
FBTs are more straightforward, and don't come with the tricky succession rights. Terminating them can require some forethought, though: fixed term FBTs of more than two years require 12 months' notice expiring on the last day of the term (even if there is a contractual break clause which requires less notice). If they are not terminated on or before the contractual expiry date they will simply run on as a tenancy from year to year
By contrast, fixed term FBTs of two years of less can either be terminated by serving notice pursuant to a contractual break or, alternatively, will simply come to an end on the contractual termination date. Note, however, that a tenant who stays in occupation and continues to pay rent following the (automatic) expiry of an FBT of two years or less will become a periodic tenant (which means that it can only be brought to an end by serving 12 months' notice ending at the end of a period).
Practical tips when buying agricultural land
Where agricultural land is being purchased (or is under option) there are a number of things for a house builder to consider when it comes to obtaining vacant possession:
- Farmers are generally quite knowledgeable about their rights - don't expect them to simply roll-over;
- An FBT is generally preferable to an agricultural holding - if you can, get the current owner (or seller) to negotiate an FBT (of less than two years, with a break) before the sale;
- Keep track of fixed-term FBTs - if they are expiring, either grant a new FBT (of less than two years, with a break) or ensure that the tenant gives up vacant possession before the expiry date;
- In really tricky situations, speak to solicitors early so a vacant possession strategy can be put in place.