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Farm Business Tenancies: a short guide

What is a farm business tenancy?

Qualifying conditions, agricultural business, using a farm business tenancy agreement when the use is not agricultural business, what happens if the tenancy drops out of the qualification criteria, features of farm business tenancy, term of agreement and notice to quit, rent and review.

• Compensation for tenant's improvements

Disputes procedure

Further information and documents.

This article explains what a farm business tenancy is and the key feature that differentiate it from other types of leases.

The words 'tenancy' and 'lease' mean exactly the same thing.

Parliament generally uses 'tenancy' when referring to residential leases and 'lease' when referring to business leases.

To confuse us all, when an agricultural letting qualifies under the Agricultural Tenancies Act 1995 (ATA 1995), the lease is referred to as a 'farm business tenancy' (sometimes shortened to 'farm tenancy' or 'FBT'). It is nonetheless a type of business lease .

Other relevant law includes the Agricultural Tenancies Order 2006 .

A tenancy of agricultural land will be classed as a farm business tenancy if:

• it was granted on or after 1st September 1995; and
• all or part of the land is used for trade or business and this state of affairs continues at all times during the tenancy; and
• either the character of the tenancy (at the relevant time and not necessarily at the beginning or end) is primarily or wholly agricultural; or the landlord and the tenant have exchanged notices in the prescribed statutory form prior to the start, confirming that it is to be, and will remain a farm business tenancy.

The 1995 Act defines agriculture as including 'horticulture, fruit growing, seed growing, dairy farming and livestock breeding and keeping, the use of land as grazing land, meadow land, osier land, market gardens and nursery grounds, and the use of land for woodlands where that use is ancillary to the farming of land for other agricultural purposes'.

Livestock includes 'any creature kept for the production of food, wool, skins or fur or for the purpose of its use in the farming of land'.

A lease can remain within the provisions of the ATA 1995 even if the tenant plans to change the use to non-agricultural business after the lease is granted, provided that the correct notices were exchanged before it started. This allows tenants to diversify away from farming.

The Act does not make clear how far diversification may go. In many cases it will be a matter of opinion as to whether the land continues to be farmed. However, it has become clear that peripheral or additional business operations will not prevent a tenancy from being a FBT.

Examples might be: the operation of a farm shop, or a 26 day caravan site, or use of part of the land for grazing horses.

Note though, that any business (or other) activity than farming is likely to require the consent of the landlord in any event. If the tenant does intend to diversify, then the landlord's permission will have to be sought.

If the tenancy at some points no longer qualifies under the definition of an FBT, then there is no serious problem for either party.

The tenancy becomes regulated by the Landlord and Tenant Act 1954 (LTA 1954), just like all other business leases. The main possible areas of difficulty will be those that the agreement has not covered because it was never intended to be a lease under the 1954 Act.

For example, problems might arise in connection with: rent reviews; notices to quit; or occupation of the buildings.

The differences between a FBT and other types of leases (such as those governed by the LTA 1954) are in the terms of the agreement and notice to quit, rent and review, and compensation for improvements made by the tenant.

There are special rules for fixed tenancies of less than two years. Where the term is less than two years, the tenancy expires automatically at the end of the term. No notice to quit is required to be given by the landlord or the tenant.

Where the term is for two years or more, written notice must be given at least one year in advance. If no notice is given, then at the end of the fixed term, the tenancy becomes a periodic one under the same terms until ended by the giving of a notice. The periodic tenancy must also be ended by giving notice of at least one year.

During a tenancy, notice can be given by the landlord or the tenant. Whichever gives it, it must be of at least one year. Under the ATA 1995, the maximum notice period was 24 months in advance. However, under the Regulatory Reform (Agricultural Tenancies) (England and Wales) Order 2006, landlords and tenants can agree in the agreement can agree on whatever maximum notice period they wish.

The parties may decide to include break clauses in their agreement giving either or both of them the option to 'break' after a specified time. If they decide to do so, then at least 12 months' notice must be given before the break clause can be operated. Alternatively, the parties may negotiate a surrender of the tenancy by mutual agreement, but there are no statutory provisions to deal with this.

There is nothing to prevent a landlord from obtaining possession for breach of a term of the lease, such as failure to pay the rent.

Leon (a landlord) agrees to let his agricultural land to Freddy (a farmer) for a fixed term of 4 years.

They agree that the maximum notice period to be given is 24 months.

Six months before the tenancy ends, Leon sends Freddy a notice to quit in 20 months time.

The fixed term ends and becomes a periodic tenancy.

One month later Freddy decides he would like to end the tenancy earlier. He gives Leon the minimum notice of 12 months.

The tenancy ends after 61 months, one month before Leon wanted it to finish.

The landlord and tenant can agree the rent at the outset of the tenancy as with any other lease.

The need for rent reviews arises as a result of the term of the lease being overtaken by increasing market rents. For longer term leases, it is likely that the landlord will require reviews. The parties may contract out of the provisions of the ATA 1995 with respect to rent reviews.

There are conditions: they cannot agree to exclude the possibility of future rent reductions. If they do not do so then either landlord or tenant will be able to demand a rent review every three years, as under the Agricultural Holdings Act 1986.

Even if the parties do not make specific arrangements to contract out of the Act's provisions on rent reviews, they will still be able to choose for themselves how often rent reviews are to take place. The Act simply states no less than three years.

Because the Act gives considerable flexibility over rent reviews, the Net Lawman agreements provide simply for compliance with the provisions of the Act, which call for arbitration in the absence of agreement. The arbitrator must set the rent on the basis of the open market value.

Compensation for tenant's improvements

The Act entitles a tenant to compensation when they quit the property for physical improvements made to a holding and for intangible advantages which increase the value of the holding, provided they are left behind by the departing tenant.

Intangible advantages include, for example, planning permission, which was not taken advantage of before the tenancy ended, or milk quota acquired during the course of a tenancy.

However, in all cases no compensation will be payable unless the landlord has given consent to the improvement.

Where parties cannot reach agreement over this, or a tenant is unhappy about conditions attached to consent, the Act gives the tenant the right to demand arbitration provided that the tenant has not already begun the improvement. An arbitrator can also be used to decide any question of value. Any financial contribution from the landlord or from any Government grant scheme should be taken into account and deducted.

Routine improvements - that is, physical improvements which are made in the normal course of farming the holding - can be carried out before seeking consent, and without losing the right to seek arbitration if consent is later withheld. These would include most of the items formerly known as tenant-right matters.

Compensation is to be paid at the current value of the improvement to the holding when the tenant quits the property. In other words, the tenant has the benefit of the increase in capital value over time. The parties cannot make any valid agreement to the contrary. Accordingly, the landlord should consider his future obligation, before giving any permission. He may prefer to undertake the work himself, so that he has the benefit of its future value and the issue of compensation does not arise.

If the parties enter a further farm business tenancy, compensation may be 'rolled over' by agreement.

Either side may alone apply the arbitration provisions of the Act on virtually any dispute under the agreement. Arbitration is time consuming and expensive, but unfortunately an application to court is likely to be referred to arbitration as a matter of routine.

Net Lawman advises that the most efficient way to comply with the Act is to agree the identity of an arbitrator in advance. At least there will then be no delay in choosing that person. Mediation may take place by agreement, but either party may still insist on arbitration. Note that the arbitrator must be qualified so that he is able to give a decision which is binding at law.

Net Lawman offers two farm business tenancy agreements . Which to use depends on the term of the tenancy.

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Document downloads - RICS farm business tenancy agreements

Available downloads, agricultural tenancies act 1995, rics guidance (archived).

The guidance note was published in June 1995. It offers an interpretation of the Act and prompts consideration of other important, related matters. It also provides commentary on the practical application of the Act in relation to RICS Farm Business Tenancy Agreements. The supplementary guidance note, which published in 1998, complements and updates the Guidance note on the 1995 Agricultural Tenancies Act and should be read in conjunction with it. It deals with subsequent developments following the introduction of the Act and responds to the wealth of useful information and practical advice received by RICS in response to the original guidance. RICS Farm Business Tenancy Agreements have continued to evolve. The latest editions can be accessed on isurv at http://isurv.com/site/scripts/documents.aspx?categoryID=104 This document is no longer current and is available on isurv for information only.

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Farm Business Tenancy Agreements 2012 (ARCHIVED)

These previous 2012 Agreements are now out of print and on isurv for information purposes only. The current Agreements are the 2021 versions.

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Farm Business Tenancy Agreements 2014 (ARCHIVED)

These previous 2014 Agreements are now out of print and on isurv for information purposes only.

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Farm Business Tenancy Agreements 2016 (ARCHIVED)

These previous 2016 Agreements are now out of print and on isurv for information purposes only.

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ARCHIVED: Farm Business Tenancy Agreements 2020

Since the introduction of the original Farm Business Tenancy Agreement (FBTA) suite, there have been a number of updates with the most recent in 2012, 2014, 2016 and February 2020. The 2014 and 2016 updates were primarily to take account of the introduction of the Basic Payment Scheme (BPS) in place of the Single Payment Scheme (SPS), the associated changes to related environmental schemes and the abolition of milk quotas, as well as other changes such as the availability of the new model clauses as an alternative set of provisions concerning repairs and insurance. The February 2020 updates were to take account of the United Kingdom’s exit from the European Union. A further review of the agreements will be undertaken once the terms of the Agriculture Bill 2020 have been settled and enacted. See also the supplemental user notes: http://isurv.com/site/scripts/documents_info.aspx?documentID=8884&categoryID=104 The February 2020 Agreements are the current versions.

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Farm Business Tenancy Agreements 2021

Since the introduction of the original suite of Farm Business Tenancy Agreements (FBTA), there have been a number of updates with the most recent in 2012, 2014, 2016, 2020 and 2021. The 2014 and 2016 updates primarily accounted for the introduction of the Basic Payment Scheme (BPS) in place of the Single Payment Scheme (SPS), the associated changes to related environmental schemes and the abolition of milk quotas, as well as other changes such as the availability of the new model clauses as an alternative set of provisions concerning repairs and insurance. The February 2020 updates were primarily to take account of the United Kingdom’s exit from the European Union. The 2021 review was primarily to incorporate some specific Welsh legislative/regulatory references where relevant. See also the supplemental user notes: http://isurv.com/site/scripts/documents_info.aspx?documentID=8884&categoryID=104 The June 2021 Agreements are the current versions.

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Farm Business Tenancy Agreements 2024

Since the introduction of the original suite of Farm Business Tenancy Agreements (FBTA), there have been a number of updates, with the most recent in 2020, 2021 and 2024. The February 2020 updates were primarily to take account of the United Kingdom’s exit from the European Union. The 2021 review was primarily to incorporate some specific Welsh legislative/regulatory references where relevant. For the 2024 update, a new set of user notes has been created to accompany the FBTA suite. These user notes supersede all previous accompanying guidance and notes, and are intended for use by all users of the FBT suite, who are strongly advised to access them before using any of the agreements.

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Agricultural Leases: An Overview

The agriculture sector relies heavily on leases for land and equipment to meet the needs of farmers. With absentee ownership of farmland growing in the United States, farmers and ranchers lease many of the acres they farm and graze today.  Because both private parties and governmental entities may enter into a leasing arrangement,  the complexity and scope of these contracts can vary substantially.

Even though leases may vary in form, a lease is a contract that is implied through the parties’ actions, expressed through a written document or created through oral communications. In a lease, the landlord operates as the lessor and the tenant as the lessee. In most states, statutes dealing with landlord-tenant law will apply to these agricultural leases. Many states have adopted provisions in their landlord-tenant laws that apply specifically to agriculture, such as providing for a landlord’s lien on crops when the tenant fails to pay the rent.

In order to form a valid lease, the parties must typically include the following elements in their agreement: (1) the extent and boundary of the property to be leased; (2) a definite term that the lease will run; and (3) a definite rental rate. Stated more simply, a proper lease will generally describe the parties, the property, the rental rate, and the length of time it will run.

Leases are not merely instruments allowing farmers and ranchers to gain use of certain assets. Leases may be granted to take advantage of the land’s usefulness for certain activities. Landowners may grant a lease to an oil and gas company for the development of minerals under their property. Wind companies may seek leases for the development of wind energy on the land. In addition, a farmer or rancher may lease portions of their land for hunting or other recreational uses. For more discussion related to leased hunting and recreational uses of land, please visit the  Landowner Liability Reading Room .

Written Leases Versus Oral Leases

Oral agricultural leases can be valid so long as certain requirements are met. Although some parties prefer oral leases, the benefits afforded by a written lease cannot be overlooked. A written lease is often preferable because it provides written evidence of the lease terms in case a dispute arises between the parties at a later date.

Each state has enacted a “statute of frauds” that requires certain contracts to be in writing, subject to some exceptions.

Contracts commonly covered by states’ statutes of frauds are real estate contracts and contracts exceeding one year.  Under the statute of frauds in most states, leases lasting longer than one year need to be in writing in order to be enforceable. Most states do allow oral agricultural leases of under one year. .

There are common provisions that appear in many written agricultural leases.  These include: the length of term for the lease, a rent clause, a termination process, limitations on subleasing and assignment, requirements to comply with federal and state conservation provisions, enrollment in federal farm programs, types of crops to plant, duties to control noxious weeds and purchase insurance, types of farming practices that can be used, who is responsible for the upkeep of improvements on the property, an option to purchase, and attorney fees provisions.  Other terms may be added to meet the needs of the parties.

Termination of the Lease

Termination of a farm lease can come naturally at the end of the term or, if the lease is extended beyond the original term, the parties can terminate the lease upon meeting certain requirements of notification.  Termination of the lease will also depend on the tenancy created by the lease..

A tenancy for a period of years is one that has a specific start date and a fixed termination date.  The law views any fixed computable period of time as a tenancy for a period of years, even if the term of the lease is a fixed number of months.  The common law rule does not require notification for termination of a tenancy for a period of years because the parties already know the day upon which the lease will terminate.  This common law rule is not fixed and the parties could choose to require a notification time in the lease.  Finally, it should be noted that a particular state’s law could limit the length of time that this tenancy may last.

A periodic tenancy is one that runs from one fixedtime period to another fixed time period, such as month-to-month or year-to-year.  This tenancy has no definite end and is automatically renewed unless proper notification is given to terminate the lease.  In general, proper notification for a year-to-year lease under the common law is six months before lease is set to expire.  However, some states have shortened this period by statute.  A month-to-month periodic tenancy typically requires a thirty day notice be given before the lease can be terminated.

Other methods exist which allow for the termination of a lease.  A lease can be ended at any time if all parties to the lease agree to terminate.  Additionally, some leases have termination clauses included in the written lease that address circumstances in which one party can terminate the lease if the other party breaches one of the lease clauses.

State Statutes on Leasing

States can have a wide array of statutes dealing with agricultural leases, but there are some provisions common to  all states.  These provisions typically deal with  matters such as termination of the tenancy, assignment of leases, landlord’s lien for rent, and control of noxious weeds.  Where the common law is still in place, states have different rules when it comes to rights to remove fixtures, rights in permanent improvements, rights of entry by the landlord, tenancy termination, rights of the tenant to harvest the crops after the expiration of the lease, and the liability of the tenant for rent in the case of natural disaster.

Farm Land Leases

The most common lease in agriculture is a land lease. The cash rent lease and the crop-share lease are the two most frequently used land leases in agriculture.  Both types of leases involve different forms of a definite rental rate.

In a typical cash rent lease, the tenant is obligated to pay a set price per acre or a set rate for the leased land.  With this form of lease, the tenant bears certain economic risks and the landlord is guaranteed a predictable return, regardless of commodity prices.  The landlord does carry the risk of the tenant not paying the rent or using farming practices that reap short-term benefits from the land.  Parties can also negotiate terms to help limit their exposure to these risks. For instance, the tenant can negotiate for flexible rent terms and the landlord can include terms that specify the type of farming practices that can be used.

With a crop-share lease, the landlord receives a share of the crops produced in exchange for the use of the land by the tenant.  The amount of the share typically depends on local custom.  The landlord usually agrees to pay a portion of the input costs under a crop-share lease.  This type of lease exposes the landlord to more risk but does allow the landlord to benefit if commodity prices or production increase. The crop-share lease also allows the tenant to spread the risk of reduced yields and reduces the amount of capital needed for the operation.  A third type of lease that is becoming increasingly popular is the hybrid lease.  The hybrid lease is a combination of the cash and crop-share leases which provides greater flexibility in certain circumstances.

Grazing Permit

A grazing permit is similar to a crop-share lease..  Where a crop-share lease creates an interest in land called a leasehold, a grazing permit by statute does not create a right, title, interest, or estate in the public lands. A grazing permit creates only a license to use the public lands.  The government can withdraw the license at any time without compensation, but  a grazing permit holder may have a right to compensation when the permit is fully or partially canceled in order to use the land for public purposes.

The Bureau of Land Management and the U.S. Forest Service administer grazing permits on federally owned public lands. If the state has public lands available for grazing, the permits are administered by the appropriate state agency. The permits establish the requirements of the private party to use the public lands for grazing and operate under the traditional “first come, first serve” method.  In order to get a grazing permit, a private party must first own or lease base property or a private ranch.  Base property is private land near the area to be grazed and is not easy to acquire. The term of the permit is statutorily set at ten years.  The private party must pay a grazing fee that is based on a 1966 base value of 1.23 per animal unit month (AUM) and then adjusted based on current private grazing land lease rates, beef cattle prices, and the cost of livestock production.  The fee cannot drop below $1.35 per AUM according to an Executive Order issued in 1986 by President Reagan.

Besides the Taylor Grazing Act of 1934, public lands grazing is controlled by the National Environmental Policy Act of 1969, the Endangered Species Act of 1973, the Federal Land Policy and Management Act of 1976, and the Public Rangelands Improvement Act of 1978.  For many years, environmental groups have challenged the issuance and renewal of grazing permits, making renewal of many grazing permits more difficult.

For information pertaining to these statutes and the environmental issues, please visit the  Environmental Law Reading Room.

Wind Leases

Wind leases are increasingly taking place on agricultural land across the country.  With a wind lease, a company will lease the right to enter the landowner’s property and erect wind energy infrastructure.  A typical wind lease document may exceed thirty to fifty pages.  Prior to a lease being signed, the parties will typically sign an option agreement that provides for an option period lastingbetween two to ten years depending on state law limits for option periods.  During the option period, the wind company will conduct tests to determine if the land is suitable for the project. If the wind company determines that the property is suitable for the project, then the company will exercise the option to lease the property.  In general, a company has no obligation to exercise the option to lease at the end of the option period if the property is unsuitable for the project.

If the parties choose to sign a wind lease after the option agreement expires, a wind lease will include length of the lease which can be anywhere from twenty-five to fifty years. The lease can include terms about the nature of the wind company’s activities on the property and in some cases may limit the development rights of the landowner. A common lease term is a confidentiality clause, which prevent the terms of the lease from being made public.. The typical lease will also include a decommission provision that details the removal of the turbines, the removal of any materials or equipment, and the removal of concrete to a certain depth.

The compensation provisions can vary from lease to lease.  Some leases provide for a fixed payment over the life of the lease.  Other leases have compensation provisions that depend on the number of acres leased, number of turbines installed, amount of electricity produced, and percentage of revenue. A variety of other methods can be used to calculate compensation as well. The solar leasing processes will often be an agricultural landowner’s first contact with the wind energy industry. Therefore, it is critical that the landowner familiarize themselves with this sector of the energy industry before signing any contracts.

For more discussion on wind energy, please visit the  Renewable Energy Reading Room .

Oil & Gas Leases

The majority of oil and gas production occurs on farmland (an estimated at 67% in 2014). Recent technological developments have allowed for more expansive extraction across the country. Oil and gas leases differ from most agricultural leases in that they involve the leasing of below-ground mineral rights to a third party for extraction. Mineral rights are not always conveyed with purchase of a property, so landowners should verify their mineral rights before entering into an agreement.

The terms of an oil and gas lease vary,, but typically consist of a primary term that commences before production begins, and a secondary term that commences following the start of production). Prior to production, the landowner may be entitled to delay rental payments before they receive a share of the royalties following production. It may be beneficial to include provisions in the lease that allow options for termination in the event of late payments or non-payment. Once the secondary term begins following the location of a successful drilling site, the lease may continue indefinitely as long as the site remains productive.

Due to the complexity of oil and gas leases, it is important for a landowner to research their rights and responsibilities under the lease and consult with a legal professional for assistance. Because the lessee will often erect infrastructure like roads, pipelines, and storage tanks on the property, the landowner should specify the location and type of infrastructure to be permitted on the property. Landowners can often continue agricultural production like cropping and grazing on their land under an oil and gas lease.. In some casesinvolving hydraulic fracturing, energy corporations will extract from neighboring properties without the use of above ground intrusion. However, a pooling agreement must be in place for neighboring landowners to receive a percentage of the royalties.

Compensation for oil and gas leases varies. The rates offered for oil & gas leases are controlled by several factors, including: the market for energy products at the time the lease is signed, type of oil and gas extracted, difficulty of extraction, and geographical location. Some leases provide a single payment based upon market rates, while others offer periodic payments that reflect a percentage of the proceeds generated from extraction. Other benefits may include signing bonuses, delay rental, and damage provisions. Often, costs for infrastructure and drilling may be subtracted before payments are received. Landowners may also want to consult with a legal professional regarding liability for pollution or other damages under state and federal law.

Solar Leases

Solar leases offer another alternative for those looking to lease agricultural land. In recent years, the price of solar energy equipment has dropped, allowing for further expansion of the industry and increasing the potential for profit. It is important for landowners to become familiar with the solar industry and consult with an attorney before signing a solar lease.

The terms of solar leases may vary.  Like wind energy leases, solar leases  have a development term and an operations term. The development term usually lasts 4-5 years and the operations term lasts about 30-35 years. Compensation for solar leases include a minimum payment threshold, which is tied to the market value of the land. For example, land outside of densely populated areas often has a higher value for solar developers than land in remote areas. Additionally, agricultural landowners may negotiate for royalties in addition to the minimum payment. Royalties normally vary from 3.5% – 4.5% of the gross revenue generated by the solar production. Both payment methods increase over time, keeping pace with the costs of solar energy, inflation and land value. Minimum payments are usually received yearly, whereas the royalties may be received quarterly.

Due to the lengthy terms of solar leases, there are a variety of factors that landowners should consider before signing a contract for utility scale solar development. While landowners may often continue to use the majority their property for agricultural purposes under other forms of energy leases, solar leases can be more limiting. Solar infrastructure takes up a large amount of ground area, called the “occupied area”. The landowner’s right to ingress and egress in the “occupied area” is usually waived and any infrastructure fenced off. However, the solar lessee will hold rights to ingress and egress over the land located outside of the “occupied area” for purposes such as maintenance. Land occupied for solar production cannot be utilized for any other form of production for the term of the lease. Accordingly, landowners should consult with an attorney regarding any third-party easements and the status of the mineral rights on their land. Solar leases can also have tax implications, including loss of agricultural exemptions and effects on federal and state income tax.

For more discussion on wind energy, please visit the  Renewable Energy Reading Room.

Hunting Leases

Agricultural landowners may also lease their land for hunting purposes.. The landowner may lease their land to individuals for a limited number of seasonal hunts and can also lease to larger groups such as sporting clubs and outfitting businesses. Leases may assist an agricultural landowner in covering the cost of property taxes, operating costs, and may also reduce wildlife damage to crops..

The most common forms of hunting leases include  annual leases, seasonal leases for a particular game species, and short-term leases that vary in length from a day, to a week or longer. Various factors may determine leasing rates, including the number of hunters who hold leases, the quantity and quality of game on the property, species diversity, geographical location, amenities and accommodations, and the size of the property. The fees for most hunting leases are assessed on a per acre basis.

It is vital for landowners to familiarize themselves with any risks and liability involved with hunting leases. In some states, landowners have premises liability protection unless negligence can be proven. However, landowners may carry liability insurance for further protection or have lessees sign an agreement that releases them from liability in the event of any accident or personal injury. Other important items to consider when drafting a hunting lease include dates, boundaries of the property, permittable species that can be hunted, number of hunters allowed at once, rights and responsibilities of each party, and remedies in the event of a breach of the lease.

For more discussion related to leased hunting and recreational uses of land, please visit the  Agritourism Reading Room .

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Farm Business Tenancies: Agricultural Tenancies

• For Businesses
• Agricultural

A Farm Business Tenancy is a formal agreement between a landlord and a tenant who wishes to operate a farming business on that land. This can be a complicated leasing agreement, and there can be a wide range of terms and conditions within it that stipulate how the land can be used, and any legal obligations that might pertain to it.

That means you will need professional legal advice to navigate the process, and we at Lovedays Solicitors are experts in the world of agricultural law. It is important to understand how a Farm Business Tenancy works, and how it will affect you and your business plans in order to ensure that it is suitable for the parties involved.

We have therefore put together an essential guide of all the elements of a Farm Business Tenancy that you need to be aware of.

What is a Farm Business Tenancy?

Farm Business Tenancies (FBTs) were created under the Agricultural Tenancies Act 1995 to set out an agreement between a landowner and a tenant who wishes to rent all or part of a farm for their business needs. This will give them the right to use the land primarily or wholly for agricultural purposes and will outline the obligations of both the tenant and the landlord.

The FBT can refer to the agricultural land or farm buildings required to run the business, but it will only qualify as a Farm Business Tenancy if at least some of the land is farmed during the tenancy. In most cases, there will be a formal Farm Business Tenancy agreement in place, however, an FBT can be inadvertently created if a Grazing Licence is extended beyond 12 months with the tenant having exclusive possession and maintenance of the land. 

Whilst the words ‘tenancy’ and ‘lease’ generally mean the same thing, there is a distinct difference between the two. Typically, a lease refers to a business lease and a tenancy is used in residential agreements, however, when an agricultural letting qualifies under the Agricultural Tenancies Act 1995, the lease is then referred to as a ‘farm business tenancy’. It is still a type of business lease, but it holds a different name for these purposes.

Qualifying Conditions for FBTs

As a Farm Business Tenancy is different from other types of leases, there are certain conditions that need to be met in order to qualify. Not only is it necessary for some of the land to be farmed throughout the life of the tenancy, but if the land is agricultural to start with, then notices can be exchanged between the landlord and tenant confirming that it will remain an FBT throughout but allowing the tenant to diversify away from agriculture if the rest of the agreement allows this.

Should these notices not be exchanged for the tenancy begins, then the tenancy business must be primarily agricultural in order for it to still be considered to be a Farm Business Tenancy. 

The land must be farmed for the purposes of trade or a business, but this can apply to ‘any agricultural activity’ and not exclusively farming. Whilst at least some of the land must be farmed for the duration of the tenancy, it does not have to be the same piece of land, and therefore a tenant can change the location of the farming within the land during the tenancy, for example, in line with the seasons, as long as the practise is continuous.

Key Features of FBTs

Each Farm Business Tenancy needs to have certain key features within it relating to matters such as the terms of agreement, notice requirements, rent and the review features. These terms must be met in order for the agreement to be legal and must be maintained to ensure that the agreement remains valid throughout the duration of the tenancy. 

The features of a Farm Business Tenancy are in place for a number of different reasons. They are not only designed to protect the landlord and tenant, and to ensure that the agreement is fair and reasonable for all parties, but also to protect the land itself and to maintain consistent farming practises in the area.

Agriculture can apply to many different things, such as horticulture, the growing of fruits and seeds, the breeding and keeping of livestock, dairy farming, using the land for grazing, meadow land, osier land, market gardens and nursery gardens, or for woodlands that are ancillary to the farming land for other agricultural purposes.

This means that no two Farm Business Tenancies will be the same, as no two areas of land are the same, and neither are the different business plans of tenants. That means that each Farm Business Tenancy must be unique to the situation and drafted professionally to ensure that all of the relevant areas have been covered thoroughly and correctly. 

A Farm Business Tenancy is different to many other types of lease as the land in question is exclusively possessed by the tenant, with only restricted rights and control given to the landlord. This is to allow greater levels of certainty and stability for the tenants over a much longer period of time, meaning that the land can be subject to much more sustained investment and development as a result.

Term of Agreement and Notice Requirements

As part of any Farm Business Tenancy, there will need to be specific attention given to the terms of agreement. Fixed tenancies of less than two years will automatically expire at the end of the term, meaning that a notice to quit from either the landlord or the tenant is not required.

If the agreed term is for a longer period than this, written notice must be supplied at least one year in advance. IF this type of tenancy comes to an end without notice being given, then the tenancy will become a periodic one under the same terms until one year’s notice is given by either party. 

The Agricultural Tenancies Act 1995 states that the maximum period of notice that can be given is 24 months, but the Regulatory Reform (Agriculture Tenancies) (England and Wales) Order 2006 allows tenants and landlords to agree on whatever maximum notice period they wish in their own agreements. 

Break clauses can also be added to the agreement, which gives either party the option to break after a set amount of time, however, at least 12 months’ notice must be given before the break clause can be operated. A surrender of tenancy can also be negotiated by mutual agreement. A landlord also still has the option to obtain possession of the land if terms of the lease are breached, such as failing to pay the agreed rental sum.

Rent and Review Procedures in FBTs

An important part of any lease agreement is to set out the rent that is due to be paid. This should be agreed by both the landlord and the tenant and can include terms relating to any down payments or deposits that might also be required.

When agreeing on rental terms, the amount should be fair and reflective of the size and quality of the land, as well as any restrictions that it may be subject to. The agreement should stipulate not only the amount, but also how and when that rent should be paid. 

As well as the rent, any Farm Business Tenancy should also include the subject of rent reviews. This is because the lease can often be overtaken by increasing market rents, and therefore ensures that it remains fair and reflective of the current markets.

Rent reviews are usually favoured by landlords, particularly in the case of long-term leases, but these can be contracted out of the agreement if both parties agree, but they will still be able to choose for themselves how often reviews should take place.

They cannot agree to exclude the possibility of future rent reductions and either party can then demand a review every three years. 

There is a lot of flexibility available within Farm Business Tenancies with regard to rent reviews, so it is important to get proper legal advice on this subject, especially when leases are over a long period of time, to ensure that all parties are protected in a fair and transparent way. 

Tenant’s Rights and Compensation for Improvements

During any Farm Business Tenancy, a tenant may want to make improvements to the land that they occupy. They are within their rights to do so, but if they are leaving the landlord in a better situation when they quit than they were originally, then the tenant may be entitled to compensation. This can apply to physical improvements that have been made as well as intangible ones. 

A physical improvement may refer to improvements to properties on the land or access, whilst intangible improvements can be things such as planning permission that was not taken advantage of before the tenancy ended or a milk quota that was acquired during the tenancy. Whatever the improvement in question, it is important to remember that no compensation will be payable if the landlord has not given consent to it. 

If the parties are not able to reach an agreement to consent, then the Agricultural Tenancies Act 1995 gives the tenant the right to demand arbitration if they have not already made a start on the improvements. The arbitrator can also determine the value of the improvement whilst taking into account any financial contributions from the landlord or any grants that have been applied. 

It is important to remember that a tenant will also make routine improvements during their tenancy, such as repairing fences, and these can be carried out before seeking consent if they are part of the normal course of farming. 

Any compensation that is paid to the tenant should be at the current value of the improvement when the tenant quits the property, therefore allowing them to benefit from the increase in capital value, and no agreement to the contrary can be made. This is something landlords should take into consideration when giving consent, and they may therefore prefer to undertake the work themselves.

Diversification and Non-Agricultural Use

A tenant may want to diversify what they do during the tine of their tenancy, but it is important that they seek the permission of the landlord first. This means that the tenant can change the use of the land to a non-agricultural business after the lease is granted if all of the right notices have been exchanged before it began. The Agricultural Tenancies Act 1995, does not state what limits there are on this kind of diversification, and it may become more complicated to prove that some of the land is still farmed. 

Nonetheless, it is permitted for tenants to run peripheral or additional business operations on the land alongside the agricultural purposes, and so they may choose to open a farm shop, put together a caravan or glamping site or use the land to graze horses (which do not count as livestock as part of the Act, as they are not used for the production of food, wool, skins or fur, or for the purposes of being used for the farming of land). 

If diversification goes far enough to no longer qualify as an FBT, then the tenancy will become regulated by the Landlord and Tenant Act 1954 like all other business leases.

Lovedays Solicitors: Your Partner in Agricultural Land Transactions

Granting of agricultural tenancies.

At Lovedays Solicitors, we have vast experience in dealing with all kinds of agricultural land transactions, and can advise you every step of the way, whether you are a landlord or a tenant. We understand the agricultural market and can therefore assist in putting together and granting agricultural tenancies.

As part of our role, we can help to draft your unique Farm Business Tenancy agreement and can ensure that all parties are happy with the terms within it, so that it represents something that can support your business and help it to flourish in what is a sometimes tricky landscape.

Our specialist team of agricultural lawyers will negotiate between parties to grant a tenancy that is fair to everyone and ensures the correct and legal farming of agricultural land for the duration of the agreement.

Advising on Agricultural Tenancies

As experts in the field of agricultural law, we can also advise on Farm Business Tenancies, by carrying out all necessary investigations and research. We can therefore provide sound and informed advice that takes the whole picture into consideration.

We can assist in explaining any terms of the agreement which are unclear, and our friendly and experienced team are always on hand to answer any questions that you may have. We can help with dealings between parties and with any governing bodies, as well as ensuring that all aspects of the Farm Business Tenancy fall within the rules set out in the Agricultural Tenancies Act 1995. 

Farm Business Tenancies are important in order to protect the interests of landlords and tenants in the world of agriculture. They are in place to ensure that the agriculture industry remains intact and that businesses within it can continue to grow.

Lovedays Solicitors have been representing their Derbyshire based clients since 1905 and have developed an in-depth understanding of the laws and challenges surrounding agricultural agreements.

We can therefore help with any Farm Business Tenancy queries, from drafting and granting an agreement, to dealing with extensions, notices to quit, rent reviews and compensation enquiries, so please get in touch with our friendly and professional team to see what we can do for you.

Frequently Asked Questions

A short-term Farm Business Tenancy is less than two years, however, longer agreements can be put in place as long as there are regular reviews within them.

You can operate businesses such as farm shops as part of an FBT, as long as you ensure that at least some of the land is still used for agricultural purposes. You will also need the consent of the landlord, and all planning regulations will still apply.

If the use of woodland is not for trade or business, then it will need to be farmed in some way in order to qualify as a Farm Business Tenancy.

Get Support

Navigating a Farm Business Tenancy (FBT) can be intricate, involving specific legal obligations and conditions for both landlords and tenants engaged in agricultural operations. At Lovedays Solicitors, we are experts in agricultural law and understand the complexities of FBTs, ensuring your tenancy agreement supports and aligns with your farming business objectives. We provide a comprehensive guide to help you grasp all critical aspects of FBTs, safeguarding your interests and ensuring the agreement is favorable and compliant with the Agricultural Tenancies Act 1995. Trust Lovedays to make your tenancy management straightforward and legally sound.

If you don’t know your leasehold from your freehold, then get our   Free Conveyancing Guide. It contains details about the steps you will need to take with any property transactions. The Guide giving you detailed guidance on what your lawyer will be doing for you and what to look out for.

Lovedays Solicitors, Potter and Co Solicitors and Andrew Macbeth Cash and Co Solicitors are the trading names of Derbyshire Legal Services Limited which is a company registered in England and Wales under company number 08838592. Registered office Sherwood House,  1 Snitterton Road,  Matlock,  Derbyshire,  DE4 3LZ .

Authorised and Regulated by the Solicitors Regulation Authority under SRA ID number 637916.

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A Brief Guide to Agricultural Tenancies

If you are renting agricultural land or buildings, you are likely to be an agricultural tenant. There are two main categories of agricultural tenancy and each imposes different rights and responsibilities on both landlords and tenants. It is therefore important to understand the type of tenancy you have.

This brief guide does not cover tenancies tied to employment or agricultural workers occupying residential dwellings. Nor does it cover business tenancies.

Agricultural Holdings

Agricultural holdings (“ AHs ”) are governed by the Agricultural Holdings Act 1986. (“ AHA 1986 ”). Save in a small number of cases where exceptions apply, you will most likely have an agricultural holding if:-

• Your agricultural tenancy began prior to 1 September 1995• The land is used for agriculture for the purposes of a trade or business • The tenancy is granted for a term of years or from year to year – this includes leases, licences to occupy

Farm Business Tenancies

Farm Business Tenancies (“FBTs” ) are governed by the Agricultural Tenancies Act 1995 ( “ATA 1995” ). Save in a small number of cases where exceptions apply, you will most likely have an FBT if:-

• Your agricultural tenancy began after 1 September 1995

• All or part of the land is used for trade or business throughout the term of the tenancy

• The character of the tenancy is primarily or wholly agricultural or the landlord and tenant agree prior to the grant that the tenancy is an FBT

How Do The Tenancies Differ?

• Rent Review: under an AH both the tenant and the landlord have the right to a rent review every 3 years. Whereas under an FBT there is a bit more flexibility in that you can agree when the rent reviews are to take place – although the default statutory position remains every 3 years if you do not vary this.

• Compensation: under an AH you may be entitled to compensation equal to the increase in value to the holding made by the improvements when the tenancy ends for major long-term improvements e.g. planting orchards and erecting buildings, for short-term improvements e.g. applying fertiliser, liming and chalking of land and also, the value of growing crops. An FBT is a bit more transparent in providing for compensation where there have been any physical improvements (made with consent), and any other changes that increase the value of the holding.

• Renewal: if you have an AH, when the tenancy comes to an end, you have the right to request a new lease on expiration of your existing lease. Whereas if you have an FBT, you do not have a right to request a new tenancy when the your current tenancy expires. However an FBT does provide for a minimum of 12 months notice to be brought to an end.

• Succession : under an AH, there is the right for a close relative to apply for a new lease if you die or retire (subject to certain statutory conditions being met). Only two successions are permitted.

• Diversification: under an FBT, if both tenant and landlord followed the correct procedure prior to the start of the tenancy, you have the right to change the use of the land to a non-agricultural business.

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Agricultural Property Refresher: Farm Business Tenancies

Noah Bachoco

Senior Associate

At its very core, a farm business tenancy (FBT) does exactly what it says on the tin; it is an agreement between a landlord who owns agricultural land and a tenant who, by paying rent, exclusively occupies that land (including any buildings on it) for the purpose of operating a farming business.

FBTs are regulated by the Agricultural Tenancies Act (ATA 1995) and applies to the majority of new agricultural tenancies granted after 1 September 1995.  Unlike a full agricultural tenancy (also known as an 'AHA' tenancy), which forms the majority of agricultural tenancy agreements prior to 1 September 1995, FBTs provide greater flexibility for both landlord and tenant, giving them the freedom to agree specific terms between themselves with less statutory restraints. For an FBT to be deemed valid, the 'business conditions' and either the 'notice condition' or the agriculture condition' must be met. These are defined more clearly below:

• The 'business conditions'

In order to meet this condition, all or part of the land included in the tenancy must be 'farmed' for the purposes of a trade or business throughout the agreed term. Under the ATA 1995, the term 'farming' refers to any type of agricultural activity, which includes the breeding and keeping of livestock as well as the grazing of land.

• The 'notice condition' and the 'agriculture condition'

The notice condition is fulfilled when the proposed landlord and tenant exchange notices confirming that the tenancy will be (and remain) a farm business tenancy throughout the term. This condition usually applies when the tenancy is inherently agricultural at the outset.

The agriculture condition, on the other hand, is fulfilled when the business tenancy (not necessarily at the outset) becomes primarily or wholly agricultural.

A certain level of care is required to ensure that the above requirements are properly observed. Failure to do so may lead to a landlord inadvertently granting a business tenancy instead, giving the tenant security of tenure under the Landlord and Tenant Act 1954. This means that at the end of the contractual term, the tenant becomes entitled to a new lease. On the subject of renewal, it is worth noting that if an FBT is for a fixed term that lasts for more than two years, at the end of the term, the landlord must serve the tenant at least one year's written notice to terminate the tenancy. Failure to do so will lead to the tenancy becoming a periodic one. This is important to remember in instances where the landlord only intends for occupation to last for the agreed contractual term. An FBT is one of many grazing arrangements made available to a landowner looking to generate profit from their agricultural land. Depending on several factors, for example tax reliefs or farming incentives, a landowner may instead opt to grant a licence over their land rather than an FBT, which requires exclusive possession.

For further information or specific advice about FBTs or other grazing arrangements in general, please contact  Farm & Estates team.  

The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.

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Legal Articles

Guide to farm business tenancies.

Home / Knowledge base / Guide to farm business tenancies

Posted by Alex Robinson on 07 November 2012

Tenancies created under the Agricultural Tenancies Act 1995 allow land to be let as a Farm Business Tenancy (FBT) if all or part of the land is farmed for a business or trade that is wholly or primarily agricultural . This could include farm shops, food processing, and the provisions of recreational facilities.

Rent reviews under FBTs are dealt with by the Act. 

The aim of the 1995 Act was to deregulation the market for land to let and to encourage diversification into non-agricultural areas.

The terms of the tenancy should be agreed between the landlord and the tenant and recorded in writing.

Any landowner can grant a FBT.

Any tenant can take a FBT.

Only tenancies created after 1 September 1995 can be FBTs.

The landlord and tenant can agree any duration, and this can be for a fixed term or periodic (ie yearly, monthly, etc). A fixed term FBT of two years or less will simply come to an end after the fixed term but a fixed term of more than two years will require a notice to terminate giving at least 12 months notice ending on the anniversary of the start date of the FBT. A FBT for a fixed term of more than 2 years which is not terminated by notice will continue to run on a year to year basis until it is terminated on 12 months notice. Break clauses to bring the FBT to an early end may also be used.

The Agricultural Tenancies Act 1995 applies to England and Wales.

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Alex Robinson

Partner - Head of Agriculture

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Farm business tenancies: an overview

This Business Guide covers the basic rules around Farm Business Tenancies (FBTs) and explains how they differ from Agricultural Holdings Act 1986 tenancies (AHA 86) and grazing licences.

This Business Guide acts as an overview only, and so if you are considering entering into an FBT (either as a landlord or a tenant), then it is strongly recommended that you seek professional advice, as you will need a bespoke FBT tailored to your circumstances.

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Farm business tenancies under the Agricultural Tenancies Act 1995

Agricultural tenancies created after the 1 September 1995 are likely to be farm business tenancies under the Agricultural Tenancies Act 1995. In essence this Act permits the landlord and tenant to agree as they wish on virtually all matters. There is no minimum size of holding and no minimum length of term. There is a limited number of mandatory provisions which relate to :

1. Rent (Part II) 2. Compensation (Part III) 3. Removal of tenant’s fixtures (Section 8 of the 1995 Act)

Under a farm business tenancy there is no long term security of tenure but a tenancy for more than 2 years will only come to an end when a minimum 12 month written notice is given (Section 6 and 7). So, even a fixed term tenancy must be ended by notice.

Tenancies which came into effect before 1 September 1995 are protected by a different piece of legislation, the Agricultural Holdings Act 1986 which imposes a much more greatly regulated framework.

Assuming that a tenancy is a farm business tenancy under the “new” legislation then the following principles will apply. Please note that as with much legislation the devil lies in the detail and what follows sets out the general position. It will always be wise to take legal advice before taking any steps with regards to a farm business tenancy.

Pre-commencement exchange of notices: A failure to exchange notices might lead to the tenancy falling out of the farm business tenancy category and being governed by other legislation such as the Landlord and Tenant Act 1954.

Does there have to be a written tenancy agreement?

No but a failure to have a written agreement can lead to uncertainty if there is no written agreement then default conditions will apply under the legislation.

If I am the landlord and my tenant fails to pay rent can I get the farm land back?

The 1995 Act does not deal specifically with this but there may be a right to forfeit (or end) the tenancy. As a land owner you should take legal advice before entering into a tenancy with a view to safeguarding this right.

As a tenant if my landlord relies upon an agreed break clause can I get compensation for disturbance because I have to move farm?

The 1995 legislation does not provide you with such a right. Before entering into an agreement you should consider negotiating on this.

Will I have to give up my farmhouse at the end of the tenancy?

The answer (unless a new tenancy is agreed) is likely to be yes.

What about rent reviews?

You either agree this in advance or the 1995 Act allows for an open market rent review every 3 years of the term.

As a tenant can I assign the tenancy to someone else or sublet?

If the agreement does not bar this then in law it will be possible for you to assign or sublet all or part of the holding. The agreement, however, may say differently.

What about tenant’s fixtures?

A farm business tenant may remove any type of fixture or building providing he makes good the damage.

If a fixture or building falls within the definition of “Tenant’s Improvement” to which the landlord agreed in writing the tenant has a choice of either leaving it behind and receiving compensation for it or removing it as a fixture.

In summary the 1995 legislation created a flexible framework in contrast to the legislation of a decade before nonetheless whether you are a prospective tenant or landlord of an agricultural holding you would be well advised to create certainty and protect yourself by taking advice and entering into a formal written agreement.

For help and assistance contact our Stafford office on 01785 211411

The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances. (50587)

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Agricultural tenancies and the New Model Clauses

January 13, 2016

Last reviewed: August 17, 2022

Author - Kate Theophilus

Kate Theophilus, partner in the rural team at Stephens Scown, looks at the new responsibilities for both landlords and tenants under the ‘New Model Clauses’.

If you are a tenant or a landlord of agricultural land then recent changes to legislation may have an impact on your tenancy agreement.

What are the Model Clauses?

The phrase ‘Model Clauses’ is given to statutory regulations that apply to all agricultural tenancies under the Agricultural Holdings Act 1986. If the Model Clauses are expressly mentioned in the written agreement, they may also apply to farm business tenancies under the Agricultural Tenancies Act 1995.

The Model Clauses set out landlord and tenant obligations to maintain, repair and insure fixed equipment. Fixed equipment includes any ‘building or structure affixed to land and any works on, in, over or under the land’.

Landlords and tenants are free to negotiate and agree repair provisions as they deem suitable for their individual holdings. However, if a written tenancy agreement does not determine which party is responsible for a particular repair, then the Model Clauses will apply. If the written agreement and the Model Clauses conflict, then the written agreement will take priority.

What are the New Model Clauses?

Following a DEFRA consultation to determine if current legislation could be modernised, new regulations were drawn up. These regulations, known as the ‘new Model Clauses’, came into effect on 1 October 2015 and repeal the previous 1973 Model Clauses.

What has changed?

The new Model Clauses add additional responsibilities for both tenants and landlords. The changes reflect advances in technology and the rising costs of fixed equipment on farms.

How do the new Model Clauses affect landlords?

The main changes to the 1973 Model Clauses that affect landlords under Part 1 of the new Model Clauses are:

• The repair and replacement of the electrical supply system including the consumer board but excluding sockets and electrical fittings
• Gas pipes, fixed liquid petroleum and gas tanks
• Fire alarms, carbon monoxide detectors and alarms
• Water and drainage systems including reed beds for water and sewage treatment, septic tanks and cess pools
• Extension of the list of items in respect of which the landlord may recover one-half cost from the tenant

How do the new Model Clauses effect tenants?

Part 2 of the new Model Clauses details the rights and liabilities of the tenant. The following are some important additions to the 1973 Regulations which are now the responsibility of tenants.

• Heat and power generating equipment including solar panels, wind turbines and anaerobic digesters. This equipment must be wholly for the use of the tenant
• Increase in the limit on the tenant’s liability for replacement of roof tiles or slates from £100 to £500
• Livestock handling systems including sheep dips
• Space heating and water heating systems

What do Tenants and Landlords need to do?

As mentioned above, the new Model Clauses will only apply if your written agreement is silent on a particular repair and maintenance obligation. So, if you are a tenant or a landlord with either an agricultural tenancy under the 1986 Act or a farm business tenancy under the 1995 Act, then you will need to check your written agreements to ensure that it contains adequate provisions. If your written agreement does not contain adequate provisions then you will need to look to the New Model Clauses to ascertain who is responsible.

If you have a question or query for Kate Theophilus, please email [email protected] or call 01872 265100.

Kate Theophilus is a Partner at Stephens Scown.

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Changes to farm tenancy succession – what you need to know

• Business management
• Tenancies and rents

Currently, a person wanting to succeed to an Agricultural Holdings Act 1986 (AHA ‘86) tenancy must be both eligible and suitable , for which there are several tests.

Eligibility first requires the potential successor to be a close relative of the retiring or deceased tenant – this means they must be a child, spouse or civil partner, or someone treated as a child of the tenant.

See also: Tenants’ rights if asked to quit land planned for development

In order to further prove eligibility, the applicant’s only or principal source of livelihood (in income or benefits in kind) during five of the past seven years must be derived from their agricultural work on the holding in question.

It could also be on another agricultural unit of which the holding forms part, unless they have the landlord’s written agreement otherwise.

This is known as the “livelihood test”.  

They must also not occupy separately a commercial unit of agricultural land – the “commercial unit” test.

What is changing?

One test is being withdrawn while another is being strengthened. From 1 September 2024, the commercial unit test will no longer apply.

This stipulates that the applicant for succession cannot be in occupation of another agricultural unit capable of supporting two full-time agricultural employees.

This was a capricious and unfair test, says Tenant Farmers Association chief executive George Dunn, because while some families could circumvent it by good planning, others fell foul of it through an unexpected death or sudden incapacity of the existing tenant.

Either of these could precipitate a succession application way before it would reasonably have been expected.  

“It discriminated against some potential successors who had gone out and been entrepreneurial – exactly the sort of person a landlord would want as a tenant,” says Mr Dunn.

However, in exchange for losing the commercial unit test, the suitability test is being tightened.

Suitability at present involves being able to show that the applicant has sufficient training and experience to take on the tenancy and run the farm, as well as suitable health and financial standing.

The change to the suitability criteria means that the bar will be set at a level where the potential successor must demonstrate that if the tenancy was available on the open market, they are of a standard that a prudent landlord would be willing to shortlist them for the tenancy, says Mr Dunn.

“It’s important to note that this refers to a ‘prudent and willing landlord’ and not the landlord in question,” he says. “It’s not about proving you are the best candidate, simply that you would make the shortlist.”

Demonstrating suitability in this respect includes showing that a potential successor will be able to run the farm commercially and to a high standard, with care for the environment, and with or without other land.  

Budgets and cashflows will be needed to support this, with bank and personal references helping too, says Mr Dunn. “You have to approach it as if you were applying for a tenancy on the open market.”

However, the age of the applicant must be disregarded, as must any offer of rent.

How and when do the changes apply?

The changes to tenancy succession criteria apply only to Agricultural Holdings Act 1986 (AHA) tenancies in England and to applications where the date of death of the tenant or the giving of a retirement notice is on or after 1 September 2024.

The regulations for this were laid before parliament in May 2021.

For applications after 1 September 2024, where the former tenant died or retired prior to 1 September 2024, the previous (current) rules will apply.

The changes will also be introduced in Wales at a date to be announced, as regulations for this have not yet been laid before the Senedd Cymru (Welsh parliament).

To be an AHA tenancy, the tenancy must have started before 1 September 1995.

Livelihood test challenges

Regardless of the change next year, landlords and their agents are asking for ever more detail to satisfy the livelihood test and applications are taking a lot longer than they used to, says Mr Dunn.

Given the further strengthening of this test from September 2024, he urges tenants and their families to use the time to make sure things are in place to enable them to make the best case.

“We’re finding that landlords are routinely being very difficult on succession. There is an increased lack of willingness,” he says.

“We have a lot of cases on at the moment, in terms of the amount of information they are asking for on tests, particularly on the livelihood test.

“There are some very long applications for private information, for example, bank and credit card statements to show income and expenditure over a seven-year period. It can be very intrusive.

“However, it is up to the applicant to prove their eligibility and the tribunal is often willing to agree to what is being asked for by the landlord.”

As a result, Mr Dunn advises collecting and keeping good evidence, for that crucial seven-year period, of income (including benefits in kind) and day-to-day spending to support the applicant’s lifestyle.

“If the applicant has other (non-farming) income, or there is other income coming into the household, it should be directed to savings, or for investment into a property for retirement, for example, and not used for day-to-day living costs.

“Landlords have always been difficult about succession, they don’t want another generation taken up. As time has gone on and people see farm business tenancies (FBT) working very well for landlords, agents are taking a hard line.”

Mr Dunn stresses how important it is that notice is served for applications to succeed. “You’ve got to make that application to have a chance of a tribunal hearing, though things do not always go to a full hearing.”

Things can get stuck at a technical level, the tribunal is there in the background while the parties produce their evidence, he says.  

Succession on the death of the tenant or retirement

On the death of a tenant, anyone wanting to take on the tenancy must apply to the First Tier Property Tribunal (“the Tribunal”) within three months following the date of death.

In the meantime, the tenancy is held by the personal representatives of the deceased.

The applicant must then satisfy the tribunal of their eligibility and suitability.

Landlords will usually serve a notice to quit within three months of being notified of the tenant’s death, in order to prevent the tenancy remaining in the deceased tenant’s estate.

The passing of the Agriculture Act 2020 allowed for a tenant to serve a notice to retire at any age.

Where a successor wants to take on the tenancy in such cases, they must satisfy the livelihood test and if this fails, they may not submit a further application on the death of the tenant.

Landlords and tenants can agree a succession without a tribunal application, however, Mr Dunn cautions that if such agreement is made, it should be professionally checked and documented.

Latest on rents

Central Association of Agricultural Valuers and Defra figures show the continued decline of the tenanted sector in acreage terms, says Mr Dunn.

Recently released Defra rent statistics show that a tipping point has probably been reached on rents, he says, with AHA rents down by about 4% for 2021-22.  

“It’s not evidence of a massive drop, but the froth appears to have dissipated, there is a bit of sense in it and less silly bidding. With the level of costs this year, it’s no surprise.”

With the 25 March Lady Day rent review date approaching, there is every reason why tenants should serve notice on landlords for a reduction, says Mr Dunn.

“For AHA and FBT rents that were properly reviewed three years ago, I would expect reductions. But remember, landlords can use that notice to apply for a rent rise too.”

He reminds tenants of the importance of using the correct form of notice, the timing of the notice and the correct address for service.

AHA agreements

• The average annual rent for AHA agreements in the year to February 2022 fell 4% to £177/ha
• The North West saw the largest rise in average rent, to £135/ha
• The east of England saw the largest decrease, of 13% to £222/ha

FBT agreements

• FBT rents fell 6% to £225/ha
• The North West had the biggest fall, at 21%, to £118/ha
• South West rents rose the most, by 12% to £268/ha
• The average length of term was five years and eight months

Seasonal rents

Seasonal agreements rose by 20%, to £181/ha, with less favoured area grazing livestock rents down by 5% to £127/ha and dairy rents rising the most, up 34% to £324/ha.

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Agricultural tenancies

How farm business tenants and landlords can claim compensation for improvements, terminate a tenancy and ask for a rent review.

Applies to England and Wales

If you rent agricultural land or buildings to run a farm business you may have an agricultural tenancy agreement. Every agricultural tenancy agreement is unique. You should seek independent expert advice before entering into a new tenancy agreement or arrangement, or changing an existing one.

This guidance provides information on 2 types of agricultural tenancies governed by legislation:

• Farm Business Tenancies governed by the Agricultural Tenancies Act 1995 – those agreed after 1 September 1995
• 1986 Act Tenancies governed by the Agricultural Holdings Act 1986 – those agreed before 1 September 1995

Farm Business Tenancies

A tenancy is a Farm Business Tenancy if at least part of the tenanted land is farmed throughout the life of the tenancy. The tenancy must also meet one of these 2 conditions:

• if the tenancy is primarily agricultural to start with, the landlord and tenant can exchange notices before the tenancy begins confirming they intend it to remain a Farm Business Tenancy throughout – this lets tenants diversify away from agriculture where the terms of the tenancy agreement allow this
• if the landlord and tenant don’t exchange notices before the tenancy begins, the tenancy business must be primarily agricultural to be considered a Farm Business Tenancy

Farm Business Tenancy rent reviews

Landlords and tenants can negotiate their own rent levels and decide whether or not they want to have rent reviews. Either the landlord or tenant can demand a rent review every 3 years by law.

However, landlords and tenants can agree on how often a rent review should take place – this agreement replaces the law. For example, you can agree on a rent review every 4 years.

You must not preclude a reduction in rent in your rent review agreements.

Farm Business Tenancy compensation

As a farm business tenant you’re entitled to compensation at the end of a tenancy for:

• physical improvements you’ve made to a holding (provided the landlord has given consent to the improvements)
• changes that increase the value of the holding (provided they are left behind when the tenant leaves)

You can agree in writing an upper limit on the amount of compensation, usually equal to the tenant’s cost in making the improvements.

Ending a Farm Business Tenancy

Landlords and tenants of a Farm Business Tenancy can end the tenancy by issuing a notice to quit. The minimum notice period to quit is 12 months

1986 Act agricultural tenancies

Agricultural tenancies agreed before 1 September 1995 are known as 1986 Act Tenancies. They’re also sometimes referred to as Full Agricultural Tenancies (FATs) or Agricultural Holdings Act tenancies (AHAs).

These tenancies usually have lifetime security of tenure and those granted before 12 July 1984 also carry statutory succession rights, on death or retirement. This means a close relative of a deceased tenant can apply for succession to the tenancy within 3 months of the tenant’s death.

Applying for succession stops any notice to quit given by the landlord on the tenant’s death.

Two tenancies by succession can be granted, so it’s possible for the tenant’s family to work the holding for 3 generations. Farmers with a tenancy granted before 12 July 1984 can also name an eligible successor such as a close relative who can apply to take over the holding when they retire.

1986 Act Tenancies rent reviews

The landlord or tenant has the right to a rent review 3 years after either the:

• start of a tenancy
• previous rent review

If land is added to or removed from a holding then the next rent review must be either at least 3 years from one of the following:

• the date the original tenancy began
• from the date of the previous rent review for the original tenancy

This rent review must happen even if the rent has changed to reflect changes to the amount of land on the holding.

1986 Act Tenancies compensation

Under the 1986 Act Tenancy agreements the tenant is entitled to compensation at the end of their tenancy for the following:

• major long-term improvements
• short-term improvements
• ‘tenant right’

Major long-term improvements

These include:

• making or planting water meadows
• planting orchards
• erecting or altering buildings
• constructing silos, roads or bridges
• repairs to fixed equipment

Short-term improvements

• mole drainage
• protecting fruit trees against animals
• clay burning
• liming and chalking of land
• applying manure, fertiliser, soil improvers and digestate to the land (in England)

‘Tenant right’

• the value of growing crops
• the costs of husbandry, such as sowing seeds and cultivations
• compensation for disturbance where a landlord terminates the tenancy with a notice to quit

The amount of compensation is measured by the increase in value to the holding made by the improvements. The landlord may also claim compensation for disrepair - usually the cost of repairing any damage.

Dispute procedures

Where a landlord or a tenant has a dispute relating to an Agricultural Tenancy (either a 1986 Act Tenancy or a Farm Business Tenancy) they can use third-party expert determination or arbitration procedures.

Arbitration is the private legal settlement of a dispute by an independent, professional arbitrator which can involve either:

• a tribunal hearing where both sides present evidence and testimony
• the 2 parties agreeing to resolve the dispute using written arbitration procedures, avoiding the time and costs of a hearing

If a landlord and tenant cannot agree on the appointment of an arbitrator, either of them can apply to the following organisations to make an appointment on their behalf:

• The Royal Institution of Chartered Surveyors ( RICS ) including their Simplified Arbitration Service
• The Central Association for Agricultural Valuers (CAAV)
• The Agricultural Law Association (ALA) Dispute Resolution Panel

These organisations can appoint an arbitrator to decide a rent review or resolve a dispute other than a rent review, or both.

You must pay for this service. Fees differ by organisation and service – they are detailed during the application process.

Farmers can get further information on agricultural tenancy issues from the Tenant Farmers Association and the National Farmers Union .

Landowners can get further information from the Country Land and Business Association .

Specialist information is given by certain organisations:

• surveying – the Royal Institute of Chartered Surveyors and the Association of Chief Estates Surveyors
• agricultural valuation expertise - the Central Association of Agricultural Valuers
• legal advice – the Agricultural Law Association

Updates to this page

Amended 'Dispute procedures' to clarify process of appointing arbitrator on behalf of landlord or tenant, and amended broken link.

This guide now explains what users must do. The links to legislation have been removed and the actions explained in plain English.

First published.

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34 Facts About Balashikha

Written by Rea Cartwright

Modified & Updated: 29 Jul 2024

Reviewed by Jessica Corbett

Balashikha, a vibrant city situated in the Moscow Oblast of Russia, is a captivating blend of rich history, cultural heritage, and modern developments. As you delve into the heart of Balashikha, you'll discover a myriad of fascinating facts that unveil the essence and allure of this dynamic locale. From its intriguing historical landmarks to its flourishing arts and cultural scene, Balashikha beckons visitors to explore its multifaceted identity.

In this article, we'll embark on a journey to unravel 34 captivating facts about Balashikha, offering a comprehensive glimpse into its past, present, and future. Whether you're a history enthusiast, an avid traveler, or simply curious about this enchanting city, these facts will provide an enriching insight into the unique tapestry of Balashikha. Let's venture into the realm of Balashikha and uncover the wonders that await within its embrace.

Key Takeaways:

• Balashikha, a city in Russia, has over 215,000 residents and offers a vibrant cultural scene with museums, theaters, and traditional festivals. It’s a blend of tradition and modernity, making it a captivating destination for exploration and discovery.
• Nestled on the banks of the picturesque Pekhorka River, Balashikha embraces its natural surroundings, providing tranquil retreats like the Balashikha Forest Park and the Botanical Garden. The city’s diverse cultural tapestry invites visitors to savor unique flavors and traditions.

Balashikha is a city in Russia.

Located in the Moscow Oblast, Balashikha is a prominent city in the Moscow metropolitan area, known for its rich history and cultural significance.

The city has a population of over 215,000 people.

Balashikha is home to a diverse community, with a population of over 215,000 residents contributing to the city's vibrant atmosphere.

Balashikha is situated on the Pekhorka River.

The picturesque Pekhorka River flows through the city, adding to the natural beauty and charm of Balashikha.

The city experiences a humid continental climate.

Balashikha's climate is characterized by distinct seasonal changes, with warm summers and cold winters shaping the local environment.

Balashikha is known for its cultural landmarks.

The city boasts a rich cultural heritage, with numerous landmarks and attractions that reflect its historical and artistic significance.

The Balashikha Museum of History and Art is a popular cultural institution.

This renowned museum showcases the city's history and artistic achievements, offering visitors a captivating journey through Balashikha's past and present.

The city has a strong industrial presence.

Balashikha is home to various industries, contributing to the economic vitality and development of the region.

Balashikha is in close proximity to Moscow.

The city's strategic location near the Russian capital provides residents with convenient access to the cultural and economic opportunities offered by Moscow.

The Balashikha Arena is a prominent sports and entertainment venue.

This modern arena hosts a wide range of events, including sports competitions, concerts, and cultural performances, enriching the city's entertainment scene.

Balashikha has a rich tradition of folk music and dance.

The city's cultural heritage is celebrated through vibrant folk music and traditional dance performances , showcasing the local artistic talent.

The Balashikha Forest Park offers a tranquil natural retreat.

Residents and visitors can enjoy the serene beauty of the Balashikha Forest Park, a peaceful escape from the urban bustle.

The city's economy is diverse and dynamic.

Balashikha's economic landscape encompasses various sectors, fostering growth and innovation within the local business community.

Balashikha has a network of educational institutions.

The city is committed to providing quality education, with a network of schools and colleges catering to the academic needs of its residents.

The Balashikha Central Market is a bustling hub of commerce.

This vibrant market showcases local produce, crafts, and goods, serving as a focal point for economic activity and community interaction.

Balashikha is known for its traditional cuisine.

The city's culinary traditions reflect a blend of flavors and recipes unique to Balashikha, offering a delightful culinary experience for food enthusiasts.

The Balashikha Drama Theater is a cultural gem.

The theater enriches the city's cultural scene with captivating performances, showcasing the talent and creativity of local and international artists.

Balashikha has a strong sense of community spirit.

The city's residents are known for their warm hospitality and strong community bonds, creating a welcoming and inclusive environment.

The Balashikha Music School nurtures young talent.

Aspiring musicians receive quality training at the music school, contributing to the city's vibrant music culture and artistic legacy.

Balashikha celebrates traditional festivals and events.

The city's calendar is filled with colorful festivals and events that highlight its cultural diversity and heritage, attracting visitors from near and far.

The Balashikha History and Architecture Museum preserves the city's legacy.

This esteemed museum showcases the architectural heritage and historical legacy of Balashikha, offering valuable insights into the city's evolution over time.

Balashikha is a hub for creative arts and crafts.

Artisans and crafters contribute to the city's creative tapestry, producing unique works of art that reflect Balashikha's artistic identity.

The city has a strong tradition of winter sports.

Balashikha's winter sports enthusiasts enjoy a range of activities, from ice skating to skiing, embracing the winter season with enthusiasm and energy.

Balashikha's architectural landmarks are a testament to its history.

The city's architectural marvels stand as a testament to its rich history, with iconic buildings and structures shaping its urban landscape.

The Balashikha Youth Theater fosters young talent.

Aspiring actors and performers find a platform for artistic expression at the youth theater, contributing to the city's vibrant cultural scene.

Balashikha's public parks offer recreational spaces for residents.

The city's well-maintained parks provide residents with inviting spaces for leisure, relaxation, and outdoor activities.

The Balashikha Philharmonic Society promotes musical excellence.

Musical enthusiasts can indulge in captivating performances at the philharmonic society, where talented musicians showcase their artistry.

Balashikha's local businesses contribute to its economic vitality.

The entrepreneurial spirit thrives in Balashikha, with local businesses playing a significant role in driving the city's economic growth and prosperity.

The Balashikha City History Museum chronicles the city's past.

Visitors can explore the city's historical narrative at the history museum, delving into the events and milestones that have shaped Balashikha's identity.

Balashikha's cultural diversity is reflected in its cuisine.

The city's culinary landscape mirrors its cultural diversity, offering a delightful array of flavors and culinary traditions for residents and visitors to savor.

The Balashikha Puppet Theater captivates audiences of all ages.

Young and old alike are enchanted by the puppet theater's enchanting performances, adding a touch of magic to the city's cultural offerings.

Balashikha's natural surroundings inspire artistic expression.

Artists and creatives draw inspiration from the city's natural beauty, infusing their works with the essence of Balashikha's scenic landscapes.

The Balashikha City Library is a treasure trove of knowledge.

Enthusiastic readers and scholars find a wealth of literary resources at the city library, fostering a love for learning and intellectual exploration.

Balashikha's vibrant street markets showcase local craftsmanship.

The city's street markets buzz with activity, offering an eclectic mix of handmade crafts and artisanal products that reflect Balashikha's creative spirit.

The Balashikha Botanical Garden is a haven of tranquility.

Nature enthusiasts can immerse themselves in the beauty of the botanical garden, where diverse plant species create a serene and enchanting environment.

Balashikha, a city brimming with cultural vibrancy and historical significance, offers a tapestry of experiences for residents and visitors alike. From its rich artistic heritage to its thriving economic landscape, Balashikha embodies a harmonious blend of tradition and modernity. With a population of over 215,000 people, the city exudes a strong sense of community spirit, fostering warm hospitality and inclusive camaraderie. Nestled on the banks of the picturesque Pekhorka River, Balashikha embraces its natural surroundings, providing tranquil retreats such as the Balashikha Forest Park and the Botanical Garden. The city's cultural scene thrives with institutions like the Balashikha Museum of History and Art, the Drama Theater, and the Philharmonic Society, showcasing the talent and creativity of local artists. Balashikha's culinary delights, traditional festivals, and vibrant street markets reflect its diverse cultural tapestry, inviting visitors to savor the flavors and traditions unique to the city. As a hub for education, creativity, and economic dynamism, Balashikha continues to evolve while preserving its architectural landmarks and historical legacy, making it a captivating destination for exploration and discovery.

In conclusion, Balashikha is a city of rich history, vibrant culture, and breathtaking natural beauty. From its fascinating historical landmarks to its modern amenities, Balashikha offers a diverse range of experiences for visitors and residents alike. Whether you're exploring the city's architectural marvels, indulging in its culinary delights, or immersing yourself in its artistic heritage, Balashikha has something to captivate every soul. With its strategic location near Moscow and an array of recreational opportunities, Balashikha stands as a testament to the harmonious blend of tradition and progress. This city is a hidden gem waiting to be discovered, and its allure is bound to leave an indelible mark on anyone who has the pleasure of experiencing it.

What are some must-visit attractions in Balashikha? Balashikha boasts several must-visit attractions, including the iconic Balashikha Arena, the serene Pechorka Park, and the historic Church of the Resurrection.

What are the best times of the year to visit Balashikha? The best times to visit Balashikha are during the spring and summer months when the weather is pleasant, and outdoor activities and festivals are in full swing.

Balashikha's fascinating history, vibrant culture, and modern developments make it a city worth exploring. Uncover more intriguing facts about other cities in the Moscow Oblast, such as the captivating Kolomna . Dive into the unique stories of Russian cities like Orenburg, each offering its own distinctive charm and character.

Was this page helpful?

Our commitment to delivering trustworthy and engaging content is at the heart of what we do. Each fact on our site is contributed by real users like you, bringing a wealth of diverse insights and information. To ensure the highest standards of accuracy and reliability, our dedicated editors meticulously review each submission. This process guarantees that the facts we share are not only fascinating but also credible. Trust in our commitment to quality and authenticity as you explore and learn with us.

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Related legal acts:

• Agricultural Holdings Act 1986 (1986 c 5)
• Agricultural Tenancies Act 1995 (1995 c 8)
• Agriculture Act 2020 (2020 c 21)
• Landlord and Tenant (Covenants) Act 1995 (1995 c 30)
• Landlord and Tenant Act 1927 (1927 c 36)
• Landlord and Tenant Act 1988 (1988 c 26)

Key definition:

Forfeiture definition, what does forfeiture mean.

Forfeiture is the lost right to possession.

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House for sale by owner 277 m2 in Aprelevka on a plot of 12 hectares Kiev (or Borovskoe) Highway 27 from Moscow, city Aprelevka Street. Pine house and a plot of 12 hectares (8 acres on the documents). SGF Very convenient location. The unique combination of city and nature. The friendly neighbors on both sides of the site, live permanently. Two balconies overlooking the lake and coniferous forest (300 meters). Quiet site, located away from the main road, surrounded by a fence of metal sheets and wood. Street lighting. Year-round asphalted convenient access. Possible permanent registration. New house 277m2, perimeter 10 * 10. 3 floors, walls - brick + concrete blocks. External quality finish. Roof - soft tile. Functional and cozy house planned by a professional architect. High ceilings. 1 floor - spacious entrance hall, kitchen, living room with fireplace, bathroom and bathroom, boiler room. 2nd floor - spacious lounge, 3 bedrooms, dressing room, toilet and shower. 3rd floor: spacious hall, 1 bedroom, dressing room, 1 large hall (for sports or dancing). In the house of plastic and roof windows, quality doors. 1st floor - rough floors, painted walls, 2nd floor finish - painting gisposkarton + 2-level ceilings, 3 floor - wall paneling, wood smells. For all floors electricity. The plot of 12 hectares. Flat, rectangular shape. Car check in to the site. There is a growing number of fruit trees, pine, shrubs and flowers. Small decorative pond. City within walking distance: grocery stores, health center, pharmacy, school, kindergarten, market. Very convenient transport polezd: car - 20 minutes from the Moscow Ring Road, taxi - 30 minutes from m South West train from the center of Moscow (Kievsky railway station) - 50 minutes.. Connected electricity 14kW. Along the perimeter of the gas, central water supply and sewerage. Clean air and is visible from the windows of the sunset. The house was built quality for yourself. Ownership of more than 5 years. All documents are ready for sale. Sale directly from the owner, the operational display.

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