The new Agricultural Landlord and Tenant Code of Practice for England was published this month (April 2024), with a keen focus on supporting good relations between landlords and tenants subject to agricultural tenancies. We set out a summary below and suggest anyone reading this blog reviews the Code itself. It is not a long read and easy to digest and understand in a short time.
There are three key principles for landlords and tenants to follow under the Code: clarity, communication and collaboration. ‘Clarity’ in terms of defining intentions, expectations and problems if they arise. ‘Communication’ being clear, timely, considered and tailored to the situation. ‘Collaboration’ between the parties and a cooperative approach. This is based on the belief that landlords and tenants can achieve much more when they work together in a ‘positive spirit of common endeavour.’
In this blog, we delve into this code of practice and highlight some of the considerations relevant to those involved with agricultural tenancy portfolios and landlord and tenant relationships.
Granting, renewing or terminating agricultural tenancies
Tenants are recommended to come to the table with their ‘wish list’ of suggestions for their proposed use of a holding. They should be business planning for future use. Landlords need to be open to listening to and working with tenants to achieve successful agricultural tenancy structures that suit the holding, the tenant’s plans, and the landlord’s requirements. Communication will be very important between the parties and their professional advisers. Amicable negotiation is always preferable to contentious negotiations.
Clarity over rent and reviews, repairs and improvements
‘Clarity’ is important. All parties must understand obligations for rental payments, repairs and improvements under the tenancy structure provided. Where the tenancy structure does not provide sufficiently, there is nothing preventing the parties mutually agreeing variations by deed to a tenancy to ensure key terms align with expectations and discussions.
If tenancies are verbal, it is important for both parties to commit them to writing, using professional agents to assist with negotiating key terms and a lawyer to draft the document.
ELMs and other schemes
Tenants and landlords should be able to discuss environmental, economic and other development opportunities openly and constructively. Where the landlord’s consent is required, this should be sought in good time, and consent to new schemes should not be withheld unreasonably. Noting reasonable grounds for a landlord to withhold consent may include taxation status, rental income, capital value, mortgage terms and long-term estate plans; and these should be explained to a tenant to the extent necessary.
Enforceability
A Code of Practice is not strictly enforceable by law, but adherence to it would be looked at favourably in the event of dispute. Governing bodies that have endorsed the Code believe the principles of it will help parties constructively liaise about tenancies, which can only be a good thing.
How Moore Barlow can help you
Here at Moore Barlow we love working with our agricultural clients and their professional advisers on agricultural tenancy work and we take particular pleasure in assisting with strategic legal advice. We work collaboratively with all parties and their agents to restructure tenancies and holdings to make them user friendly and relevant for landowners and tenants for the modern day and for the future.
We truly believe that parties should collaborate and communicate early on. So much can be resolved without dispute, arbitration or tribunal involvement, by simply ensuring the correct paperwork is in place reflecting parties’ agreements or restructuring out of date paperwork by agreement where needed.
If you require advice around this or any other agricultural legal topic, please contact our team today.