Farming Succession - Get it Right Now. Planning Ahead is the Key to Success(ion!)

Whether you are a tenant farmer or a landowner with a tenant farmer in occupation, planning for the future is the key to making sure that you are prepared for when family members retire or pass away. At JCP Solicitors we act for both landlords and tenants and can help you get organised now for the future, but also support you if you haven’t previously put procedures in place. We can assist you in making or defending a succession application.

Rules and Key Dates: 12 July 1986

There are different rules and procedures to be aware of, depending on the date that a farm tenancy began. The key date here is 12 July 1986. If the tenancy started before 1986 there are specific succession rights that arise under the Agricultural Holdings Act 1986. If your tenancy started after this date and is a Farm Business Tenancy no succession rights attach to these tenancies.

Succession Rules

If certain criteria are met, a close relative of a tenant of an agricultural holding has the right to apply for a new tenancy on the death or retirement of the existing tenant. Under the Act, only two successions apply. It is therefore really important to make sure you identify any past successions or assignments.

The three tests to satisfy are as follows:

1. Eligibility – the applicant must be a close relative of the tenant – grandchildren are not accepted as close relatives under the legislation.
2. Suitability – the applicant must have the relevant experience, age, physical health, and finances to run a successful farming business
3. Livelihood test – the applicant must show that they have obtained their principal source of livelihood from the farm for at least 5 of the last 7 years. All finances are reviewed as a part of this process, so it can be easy to fall foul of this test if you diversify your farm business or have a separate income source.

Whilst these tests may seem straightforward there are a number of considerations that need to be taken into account prior to the application process. This is why instructing an advisor early will assist the process.

Succession on Death –  Strictly 3 months!

If you are an applicant hoping to succeed a tenancy of a close relative who has passed away, there is a strict 3-month period deadline to make a succession application. It may be an upsetting time as a family, but the Tribunal has a very strict approach to this rule, so it is important to bear this in mind if your intention is to succeed an AHA Tenancy.

Case G Notice to Quit

If you are a Landlord, you should always serve a Case G Notice to quit in the event of a tenant passing away. This again has a strict 3-month time period to serve the notice. The notice will need to be served on the executors of the estate of the deceased tenant as the tenancy will vest in the estate upon death.

If you are a Landlord or Tenant of an agricultural tenancy made before 12 July 1986, it is important that you instruct an advisor as soon as possible. At JCP we act for farmers and landowners in both England and Wales.

Our team of rural litigation experts are on hand to help. For any queries, contact our Rural team on 03333 208644 or email hello@jcpsolicitors.co.uk

Please note this article is not intended to be legal advice and is for information purposes only. You should seek advice from a solicitor before taking action.