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Development – agricultural land Print

It should usually be possible for a developer to get vacant possession of agricultural land. In summary, there are two agricultural law regimes that can apply:

    agricultural tenancies (granted pre-1995): these will be subject to Agricultural Holdings Act 1986 and almost always run on a yearly basis. L may serve notice to terminate but such notice must always be of at least 12 months, and must terminate on the annual term date. One of the grounds for possession is to enable non-agricultural use. But, this pre-supposes that L already has either (i) a valid planning permission for non-agricultural use as well as an intention to develop the land in accordance with that planning permission, or (ii) an intention to develop the land for non-agricultural use for which planning permission is not required (eg private forestry);

    farm business tenancies (granted post-1995): the Agricultural Tenancies Act 1995 simplified the obtaining of vacant possession. A farm business tenancy can be for any length of time but at the end of the fixed term T will not have the right to renew if L has served a notice to terminate. Under the legislation, the parties are able to agree their own terms for a farm business tenancy and so L can include a break clause within the tenancy. This can be particularly useful in a development situation where L intends that the future use should be non-agricultural. Indeed, if the farm business tenancy is for less than two years then the notice period can be as short as two months. If the tenancy is for a fixed period of more than two years, then any break notice must be given at least 12 months before termination.

The end result of all this is that L is almost certain to obtain vacant possession of agricultural land whether or not it is subject to to an agricultural tenancy (under the 1986 Act) or a farm business tenancy (under the 1995 Act). This assumes that he has obtained planning permission for his proposed non-agricultural development, and also has the intention (when serving the notice) to develop the land accordingly. The only scenario where he may not obtain vacant possession would be if a fixed-term farm business tenancy granted for a fairly lengthy period did not contain any break clauses.

T may well be entitled to compensation but that will depend on the use to which the land had been put during the course of the tenancy (note that it is not possible to contract out of the compensation provisions). Source: Lovells.

February 2011
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