Agricultural Tenancy Succession Changes in England from September 2024
By Kathryn Williams
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Under Schedule 3 of the Agriculture Act 2020 a number of changes to the agricultural tenancy succession tests will be made from the 1st September 2024.
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The current Commercial Unit test is to be repealed which will remove the need for Units of Production Orders and as such the size and scale of any additional land holdings occupied by the Applicant will have no direct bearing on the succession application. This change has been implemented in line with the Government’s observation that the current Commercial unit test was restricting the productivity of successful agricultural businesses.
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The Suitability test will also be amended in a way in which the Applicant will now be judged by the Tribunal on their individual capacity and capability to farm the holding commercially to a high standard of efficient production and care for the environment as set out in the Agricultural Holdings (Requests for Landlord’s Consent or Variation of Terms and the Suitability Test) (England) Regulations 2021. The revisions to the Suitability test are intended to be more demanding in that the Applicant must be able to demonstrate to the Tribunal that if the subject holding was hypothetically on the open market, the Applicant would be shortlisted for the tenancy based upon their merits.
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The Act has also removed “protected characteristics” from the Suitability test and as such age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief and sex should be disregarded. Instead, the Applicant will be judged on their agricultural experience, business management skills, financial standing, physical health and character etc.
The Applicant will still be required to meet the other eligibility rules in terms of being a close relative and they must derive their principal source of livelihood from the subject holding or from an agricultural unit of which the subject holding forms a part of.
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The changes will be applicable from the 1st September 2024 in England only at this stage as the Welsh Government have not yet produced their own statutory instrument on this matter.
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In practice prospective Applicants and retiring tenants will now need to consider whether to serve a retirement notice before the end of August or after the start of September, according to their own circumstances.