Lawbite: Agricultural tenancies: sowing the seeds of reform

Agricultural tenancies law is heading back into the spotlight, with the Law Commission confirming that it will review the area as part of its 14th Programme of Law Reform. 

Although the project has not yet commenced, it could shape how the law balances tenant security, landlord confidence and the flexibility needed for diversification, development and sustainable farming. Developers, utilities companies and landowners across England and Wales who have let, or may be considering letting, land to an agricultural tenant should watch this space. 

Agricultural tenancies – the current landscape

At present, agricultural land in England and Wales is commonly occupied under one of two statutory regimes. Tenancies granted before 1 September 1995 are generally governed  by the Agricultural Holdings Act 1986. These “AHA tenancies” are the more protected model, typically offering lifetime security of tenure, rent control and, in some cases, statutory succession rights.

The modern alternative is the Farm Business Tenancy (“FBT”), governed by the Agricultural Tenancies Act 1995 and the most common form of agricultural tenancy granted on or after  1 September 1995. FBTs are more flexible and commercial in nature, but they do not carry the same statutory protection, automatic succession rights or an equivalent rent-control regime. 

There has been no comprehensive reform of this area for many years. That has left a patchwork of rights and risks: AHA tenancies can offer significant security but may be less adaptable, while FBTs may encourage landowners to bring land forward but can give tenants limited long-term certainty. 

Ripe for reform

The Law Commission has now confirmed that agricultural tenancies will form part of its 14th Programme of Law Reform. The project has not yet commenced, but it is expected to examine whether the current law is still fit for purpose, including whether it properly supports tenant investment, landlord confidence, new entrants, diversification, sustainable farming and workable solutions to technical problems in practice. 

Reform is not immediate, but the direction of travel is clear: agricultural tenancies law is back on the agenda!

Key points to note are that:

• any review could affect how agricultural land is let, managed and recovered for future development, utilities or diversification projects.
• Landowners and occupiers should expect the Law Commission to focus on whether the current AHA and FBT regimes remain workable in practice, particularly where long-term investment, sustainability and flexibility are concerned.