4.1 Succession Events that ‘Count’

8.12 In order to encourage agreed succession, the legislation facilitates the grant of new tenancies in some situations on terms that the tenancy will ‘count’ as one succession under the scheme.

8.13 Although the provisions for agreed successions are generous, difficulties can arise in calculating whether previous transactions ‘count’ as one succession or not. Where it is proposed to add a family member (perhaps a son) to the tenancy, it is particularly important to ensure the transaction falls within the agreed succession provisions (above) and therefore ‘counts’ as one statutory succession. If it does not, the transaction will not use up one of the tenants two statutory successions, and could potentially extend the statutory security attaching to the tenancy by a further generation. In Trustees of FP Saunders v Ralph³⁴ it was held that the addition of an additional joint tenant (in this case the tenants son) can be effected by variation of the existing tenancy, and need not necessarily involve a novation (ie an implied surrender and regrant). Whether it does so will depend upon whether the agreement manifests an agreement to vary the existing tenancy rather than grant a fresh one on the same terms. Consequently, a memorandum adding the tenant’s son as a joint tenant took effect here as a variation of the existing tenancy, not as an implied surrender and regrant, and did not use up one of the tenants two statutory succession rights. This is to be avoided, if at all possible, from the landowner’s side. Cf surrender and regrant to the son on the tenants retirement would operate as a succession under s 37(2) for these purposes.

8.14 A tenancy obtained following the retirement of the tenant, using the statutory provisions in the 1986 Act, counts as one succession for the purposes of the statutory scheme applying both on death and retirement.³⁵