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Ask The Legal Expert: Safeguarding Agricultural Land
In this month’s Ask The Legal Expert column we get the latest specialist advice from our Carmarthen based Rural Practice team. This month specialist Solicitor in rural affairs, Ffion Lloyd, advises a farming family on the value of written tenancy agreements.
My family has occupied a plot of agricultural land for many years. How can I safeguard use of the land in the future?
It is very important that you find out whether there is a written agreement in place governing use of the land. If there isn’t, then the terms under which you occupy the land should be discussed with the landowner as soon as possible, so you can establish the nature of your agreement.
It is possible to have oral tenancy agreements, however it is always best for both landowners and occupiers to have a written agreement in place to establish who is responsible for doing what on the land. A written agreement also helps if arbitration is needed at any time to resolve any disputes and it helps to formalise things like rent reviews.
If you occupied the land prior to 1 September 1995, it is likely you will have a tenancy governed by the Agricultural Holdings Act 1986 providing there is exclusive possession for a certain term for a rent.
If your tenancy was entered into before 12 July 1984, it carries with it succession rights. So a close relative can apply to succeed the tenancy on the death or retirement of the outgoing tenant, providing the potential successor meets certain criteria. Strict time limits apply to applications for succession.
If you have an unwritten agreement, you could consider assigning the tenancy to a limited company, as essentially a company never dies.
If your agreement to occupy the land was established from 1 September 1995, it is likely to be a Farm Business Tenancy governed by the Agricultural Tenancies Act 1995.
Even if an informal arrangement has suited you up to this point you are clearly looking ahead and considering any changes that might be around the corner. It is wise to plan ahead and it is important to be clear what kind of agreement you have – not least because of any inheritance tax issues which may arise.
The manner of your agreement also affects the Basic Payment Scheme (BPS) and who can claim under that scheme. The Welsh Government will want evidence to show who has management control of the land and written agreements should be in place to accurately reflect the position on the ground.
*The question posed in this blog is based on a hypothetical situation.