1 Application of Agricultural Tenancies Act 1995

3.01 The Agricultural Tenancies Act 1995 applies to all farm business tenancies granted on or after 1st September 1995.¹ A tenancy is a farm business tenancy for the purposes of the 1995 Act if it meets the ‘business conditions’ laid down in the Act, and either the ‘agriculture condition’ or the ‘notice conditions’.² The business conditions are that all or part of the land comprised in the tenancy is farmed for the purposes of a trade or business, and that all or part must have been so farmed since the commencement of the tenancy.³ The agriculture condition specifies that, having regard to the terms of the tenancy, the use of the land, the nature of any commercial activities carried on the land, and ‘any other relevant circumstances’, the nature of the tenancy is wholly or primarily agricultural.⁴ The notice condition enables the parties, as an alternative to satisfying the agriculture condition, to serve notice on each other at the commencement of the tenancy, specifying that the tenancy shall remain a farm business tenancy even if the user of the land let ceases, at a later date, to be primarily agricultural.⁵ The application of the business, agriculture and notice conditions is considered below, at para 3.08 ff.

3.02 The 1995 Act has as its principal aims the deregulation of lettings of land, and the encouragement of farm enterprises to diversify into non-agricultural land uses. In granting the parties (landlord and tenant) greater freedom of contract, it also seeks to introduce greater flexibility into the law and to encourage the use of eg environmental and conservation covenants. Accordingly, a farm business tenancy, if created in the appropriate manner,⁶ can remain an agricultural tenancy even if the predominant use of the land and/or buildings becomes non-agricultural.

3.03 Certain categories of agricultural tenancy are excluded from the Agricultural Tenancies Act 1995, and cannot be farm business tenancies. The Act is not retrospective, and does not apply to a tenancy of an agricultural holding that began before 1st September 1995.⁷ By way of exception to this general rule, the 1995 Act⁸ preserves Agricultural Holdings Act 1986 status in a limited category of instances where the tenant went into possession on or after 1st September 1995. These are: firstly, where a written contract of tenancy was entered into prior to 1st September 1995,⁹ but the tenant went into possession after this date (for example on 29th September in the case of a Michaelmas tenancy); succession tenancies granted under the statutory succession scheme for agricultural holdings;¹⁰ tenancies granted to tenants under the ‘Evesham Custom’;¹¹ where variations have been made to a tenancy to which the Agricultural Holdings Act 1986 applies, and these have resulted in an implied surrender and regrant of the tenancy;¹² and, finally, where a tenant with an Agricultural Holdings Act 1986 tenancy agrees a new tenancy of substantially the same holding, and it is expressly agreed that the 1986 Act should continue to apply to the new tenancy¹³.

3.04 The policy of the 1995 Act is to eventually phase out security of tenure under 1986 Act tenancies, by providing that (in general) as 1986 Act tenancies disappear they can only be replaced with farm business tenancies under the 1995 Act. It is not possible to contract into 1986 Act security – although the parties may be able to achieve a broad equivalence of security by agreeing a long fixed term for a farm business tenancy. The exceptions set out in section 4 (above), under which a post-1 September 1995 tenancy can still come within the 1986 Act, all represent limited exceptions where tenants with existing tenancies may legitimately expect that a rearrangement of their holding, or of the terms of the tenancy, would not result in their losing their protected status under the 1986 Act. This accords with the non-retrospective nature of the farm business tenancy legislation.