Gaining foresight on farm tenancy successions

One of the defining characteristics of farming businesses is the succession of generations of the same family who follow one another into the fields and farmyards.

But while this situation is a natural progression for farmers that own the land they’re working, it isn’t always as simple a story for tenant farmers, who have their own rules to follow to ensure any planned succession comes to pass on the death of the present tenant.

While the rules have been simplified by the Agriculture Act 2020, the basis of farm successions remains the Agricultural Holdings Act 1986.

To qualify under the Act, the original tenancy should normally have commenced before 12 July 1984.

The applicant must then show that he is eligible through being a close relative of the deceased farmer, and that there is no other reason why a fair and reasonable landlord should not be able to insist on possession.

Anyone looking to take on the running of a tenant farm will also need to pass a suitability test, a process which is a lot simpler that it used to be, but which is still a strict requirement as obviously not just anyone would be able to take it on, no matter what their family connections.

They will need to be able to show the landowner that they know how to run a farm to the expected high standards and that they have the skills and knowledge to be able to look after the farm environment properly.

Crucially, there can only be two successions under the Act, and any informal successions, such as when the brother of a farmer has taken over the working of a farm, can cause a problem.

In such a case, the children of the deceased farmer could have difficulty in taking on the farm when they were ready to do so as the limit on the number of successions could already have been reached.

As ever in such contractual situations, proper pre-planning is the best way to avoid difficult situations arising.

Tenant farmers should be talking to their landlords about their family’s plans for the future well in advance of any urgent need to do so, so that all parties are aware where the others stand and can act accordingly.

Landlords’ plans for their land may of course also change, such as through development, diversification or simply deciding they want to farm it for themselves, and their tenants need to know whether this is going to be the case as far in advance as possible, so they can make any new arrangements required.

There is also a strict time limit of just three months from the date of the farmer’s passing by which any succession process has to be started.

No-one wants the added pressure of trying to urgently sort out the future of their home and business while grieving the loss of a loved one, which makes the imperative for getting everything addressed and agreed well in advance that much stronger.

For further information and advice on farm tenancy successions, please contact Julie Adams or call 0191 232 8345.