The Tenant Farmers Association (TFA) has marked the long-awaited modernisation of agricultural tenancy succession rules which took effect at the beginning of this month, September 2024.

The changes apply to those agricultural tenancies let under the Agricultural Holdings Act 1986 with rights of tenancy succession to 2 further generations.

Applicants for succession need to prove that they are both eligible and suitable to be the tenant of the agricultural holding subject to succession. One of the eligibility tests previously in place was to confirm that the applicant was not in occupation of another agricultural holding capable of producing a commercial return. However, for succession applications made from 01 September 2024, this test no longer applies but applicants will be expected to reach a higher standard in respect of their suitability.

TFA Chief Executive, George Dunn, said “Agricultural tenancy succession is subject to a set of complex rules. What was known as the “occupancy condition” was a particularly onerous requirement for any applicant who was occupying other agricultural land at the same time as making an application for succession. However, it was also a capricious test as it fell more heavily on those individuals who found themselves having to apply for succession following an unexpected death as most other individuals could plan their affairs so as not to be in occupation of another commercial unit at the point of their application for succession. So to see that test go is a good thing. It also penalised those individuals who were most progressive in the industry by taking on additional opportunities whilst they waited for the opportunity to succeed to a family farm tenancy”.

The removal of the “occupancy condition” for eligibility coincides with a raising of the bar on the standard applicants need to reach to prove that they are suitable to be the tenant of the holding for which they are applying. Basically, applicants need to demonstrate that had the holding for which they are applying for succession been made available on the open market, a prudent and willing landlord would have included them within the shortlist of candidates to be considered as the tenant for the holding.

“This change to suitability effectively places potential successors in the same place as other new entrants who would have to demonstrate their business skills and entrepreneurial acumen to a landlord in making an application for a tenancy of a holding. However, the applicant for succession does not need to show that they would have been the best candidate for the farm just amongst the best candidates. This change to the suitability test will mean that succession applicants will be better prepared for taking over the business of the holding having thought through the business case as part of the process for succession,” said Mr Dunn.

These changes were first recommended in the Future of Farming Report from the Working Group chaired by David Fursdon in 2013 and eventually found their way into the provisions of the Agricultural Act 2020. They have now been implemented following Regulations in England in 2021 and in Wales introduced earlier this year.

“We have a constant stream of members for whom we are providing advice on tenancy succession. We have also updated our suite of guidance resources available to TFA members to explain the changes that have occurred to assist in navigating them through the complicated provisions and procedures involved,” said Mr Dunn.