Since 1980’s English Tenants wanting to succeed their old-style tenancy agreement (those that commenced before 12th July 1984) have been barred if they were in occupation of another “commercial unit”, however from 1ST September 2024, the goal posts are moving.
As part of the Agriculture Act 2020 several amendments were made to the Agricultural Holdings Act 1986 to include the repelling of the Commercial Unit Test and the revising of the Suitability Test.
The Commercial Unit test will be abolished, eliminating its complexity and the requirement for Units of Production Orders. A Commercial Unit is defined as “This stipulates that the applicant for succession cannot be in occupation of another agricultural unit capable of supporting two full-time agricultural employees”.
The Suitability test will undergo revisions, wherein applicants will be assessed by the Tribunal based on their ability to commercially farm the holding to high standards of efficient production and environmental care.
As a result, applicants will still need to meet the eligibility criteria and pass the livelihood test (or demonstrate substantial compliance upon the tenant’s death). However, there will no longer be a restriction on the size of other occupied land, simplifying family arrangements in planning. The revised suitability test aims to be more rigorous, ensuring that qualifying applicants meet a higher standard, resulting in a potentially shorter list of candidates for the tenancy (as it is quite common for more than just one person to apply for the tenancy agreement to the Tribunal).
For those looking to succeed a Tenancy in the near future, one should consider whether to serve a retirement notice prior to 1st September 2024 or wait and risk what evidence may be required by the Tribunal in relation to the new Suitability Test.
As of 1st September 2024 the Tribunal must be sure the applicant meets the following: “if the applicant had applied in an open competition for a tenancy of this holding, that is assumed to be available under the 1986 Act, a prudent and willing landlord could reasonably be expected to regard the applicant as among the candidates to whom they would be willing to grant the tenancy”.
Tom Selby commented “In effect those applying for the tenancy should be of a standard that would be successful in a tender for the farm on the open market. This may not impact all applicants but this could result in the Tribunal upping the bar in relation to management of the farming business.”
If you are looking to apply to succeed a Tenancy agreement please do not hesitate to contact us on 01829423183.