3 Tenant Right
9.38 Section 65(1) and Sch 8, Part II provide for the entitlement of the tenant on termination of the tenancy, on quitting the holding, to obtain from his landlord compensation for ‘tenant right’ matters.
The phrase ‘tenant right’ is used to describe those matters originally not recoverable under statute, but nevertheless customarily recoverable by an outgoing tenant. Where the tenant went into occupation of the holding on or after 1 March 1948 those tenant right matters for which compensation can be recovered are now set out in Sch 8, Part 2 to the 1986 Act. If the tenant went into occupation prior to 1 March 1948 the tenant can elect, prior to termination of the tenancy and by notice in writing to the landlord, to claim compensation for tenant right under the statutory provisions. If he does not do so, however, his right to compensation will depend upon the custom of the country and the terms of the tenancy agreement, as formerly.76 Where the tenancy terminates by reason of notice to quit, the landlord is entitled to put the tenant to his election by serving a written notice requiring him to elect whether s 65(1) is to govern claims for tenant right, or whether the claim is to be maintained under customary right or the tenancy agreement. The tenant is not entitled to elect for the statutory measure of compensation to apply after the expiry of one month from the giving of the landlord’s notice of election, or (alternatively) one month from the termination of possession proceedings under the Act with the notice to quit having been upheld.77 If no election is made in accordance with these provisions, then the tenant’s claim under custom is barred by virtue of s 77(1) of the 1986 Act.9.39 The matters listed in Sch 8, Part 2 for which compensation can be recovered include the value of growing crops, or that of harvested crops and produce grown in the last year of the tenancy and which the tenant has no right to sell or remove.78 The tenant can also recover the reasonable cost of his acts of husbandry – for instance sowing seeds, cultivations, fallows and any other acts of husbandry performed on the holding at his expense.79 Compensation is also recoverable in respect of pasture laid down with clover, grass, lucerne, sainfoin or other seeds at the tenant’s expense, otherwise than in compliance with an obligation imposed upon him by an agreement in writing to lay it down to replace temporary pasture comprised in the holding.80 A claim can also be made in appropriate cases for the value attributable to acclimatisation, hefting or settlement of hill sheep on hill land.81 This refers to the value attributable to a flock due to it having been reared and managed on a particular hill or mountain and having thereby developed an instinct not to stray from the particular grazing concerned (which may well be unfenced). The amount prescribed by the 1978 Regulations was a sum not exceeding eight pounds per sheep (to represent the increased shepherding costs were the flock not acclimatised) plus 10% of the market value of each sheep.82 Likewise, an outgoing tenant can claim compensation for the residual fertility value of the sod of what are referred to as excess ‘qualifying leys’ on the holding.83
9.40 By virtue of s 66(2) the amount of compensation for tenant right matters is the value of the improvement to an incoming tenant.
This was formerly calculated by reference to the Agriculture (Calculation of Value for Compensation) Regulations 1978,84 Part 2 of the Schedule to which contained detailed rules for assessing the value of tenant right matters to an incoming tenant. The regulations were repealed from 1 October 2015 in England; they remain in force for the time being in Wales. The value of growing crops left on the holding will be the reasonable cost of seed sold and of cultivations, fallows, and acts of husbandry performed taking into account current costs of labour, hire of equipment, etc.85 By virtue of s 66(4) of the 1986 Act the parties are free to substitute for the measure of compensation specified in the regulations such measure of compensation, to be calculated according to such method, as may be specified in the written contract of tenancy.9.41 The tenant is not entitled to compensation under the Act for tenant right in respect of crops or produce grown, seeds sown, cultivations, fallows or acts of husbandry performed or pasture laid down, if this is in contravention of the terms of the tenancy agreement, which latter must be in writing.86 Notwithstanding contravention of the terms of the tenancy, however, compensation will be recoverable for tenant right matters if the term of the contract is shown to be inconsistent with the fulfilment by the tenant of his responsibilities to farm the holding in accordance with the rules of good husbandry.87 The latter therefore override the terms of the tenancy agreement.
More on the topic 3 Tenant Right:
- Appendix 3 Maintenance and Repair of Fixed Equipment: the Model Clauses for Tenancy Agreements
- 3 Obligations as to Husbandry
- 3 Severance of Reversion
- 3 Length of notice: statutory requirements
- 4 Landlord and Tenant
- 2 Husbandry and estate management: statutory standards
- 2 Sub-tenancies of Agricultural land
- 4 Distress for unpaid rent
- 5 Express Leasehold Covenants
- 5 Proviso for Re-entry and Forfeiture