3 Fixtures and Buildings – Right of Removal
6.102 By virtue of the rule in Elwes v Maw176 agricultural fixtures were not regarded as trade fixtures, and so could not be removed by a farm tenant unless they were of a specialist nature appropriate to certain agricultural activities such as market gardening (in which case they would qualify as ‘trade’ fixtures).177 To rectify the common law rule, tenants have since 1923 had a statutory right to remove agricultural fixtures and buildings.
The relevant provisions for agricultural holdings are now contained in s 10 of the 1986 Act.178(a)Statutory right of removal
6.103 Section 10(1) gives the tenant the right to remove, at any time during the tenancy or before the expiry of two months from its termination, any building erected by him on the holding and also ‘any engine, machinery, fencing, or other fixture (of whatever description) affixed, whether for the purpose of agriculture or not’ to the holding.
6.104 The statutory right was extended to non-agricultural fixtures by the Agricultural Holdings Act 1984.179 In the case of trade or ornamental fixtures, however, the common law right of removal subsists and can be exercised if (for instance) the strict criteria for exercise of the statutory right are not fulfilled.180 The statutory right of removal does not extend to four classes of agricultural fixture181 viz:
(i)fixtures and buildings provided by the tenant in pursuance of some obligation (eg under public health legislation or pursuant to the contract of tenancy).
(ii)a fixture or buildings erected as a mere replacement for a fixture or building belonging to the landlord.
(iii)a building in respect of which the tenant is entitled to compensation under the 1986 Act, ie where the building constitutes an improvement to which the landlord has consented and for which compensation is available under s 64 and Sch 7.
Where the landlord has not consented to the building’s erection the tenant’s only recourse is to remove it under s 10.(iv)fixtures affixed, and buildings erected, before 1 January 1884 (a rare class today).
(b)Conditions for exercise of right of removal
6.105 Section 10(3) imposes two conditions that must be satisfied by the tenant before the statutory right of removal can be validly exercised. The tenant must, firstly, have paid all rent owing by him, and performed or satisfied all his other obligations to the landlord in respect of the holding. Rent must be fully paid up to date and all repairing obligations satisfied. Clearly this would be a difficult requirement to comply with if enforced to the letter. Secondly, the tenant must at least one month before both the exercise of the right and the termination of the tenancy, give notice in writing to the landlord of his intention to remove the fixture or building.182 If these conditions are met the tenant can remove the building or fixture at any time up to two months after termination of the tenancy. In doing so, however, he is under a duty not to do any avoidable damage to any other building or part of the holding.183
6.106 Section 10 expressly provides that fixtures remain the tenant’s property so long as he has a right of removal conferred by the 1986 Act. As soon as that right is lost, however, for instance if notice of removal is not served in time, property in the fixtures concerned will vest at common law in the landlord. This will be the case even if the tenant has a residual right of removal conferred by the common law exceptions for trade and ornamental fixtures. One consequence of this rule is that distress can be levied on fixtures to which the Act applies, as they remain the tenant’s property, but not on fixtures removable only at common law in which he has no interest pending exercise of his right of removal.
6.107 Where the tenant serves notice of removal, the landlord can, at his option, elect to purchase the buildings and/or fixtures at issue by serving a counter notice in writing to that effect.184 This must be served before expiry of the tenant’s notice of removal.
The price to be paid is the fair value of the building or fixture to an incoming tenant. This is referable to arbitration in the absence of agreement. A landlord has no corresponding right to purchase fixtures on the termination of a farm business tenancy within the Agricultural tenancies Act 1995.1856.108 It has been observed that the other statutory obligations as to fixed equipment laid down by the 1986 Act are supplementary (and not directive) in that they allow contracting out by the parties – either expressly or by contrary provision in the tenancy agreement. The right of removal conferred by s 10 is one of a number of provisions in the 1986 Act that neither expressly permits nor prohibits contracting out. In Premier Dairies Ltd v Garlick186 a covenant obliging the tenant to deliver up a farm with all buildings and fixtures was held to have the effect of excluding the tenant’s statutory right to remove fixtures.187 It was, however, strongly argued in Johnson v Moreton188 that the general scheme of the legislation in 1920 was considerably different, no security of tenure being then conferred on tenants.189 The observations in the latter were clearly obiter, however, and in the absence of decisive authority the parties’ ability to contract out of s 10 must be open to doubt.