​​​​​​​Developing on land occupied by a tenant

You have decided upon your diversification project but your proposed development will require you to recover possession of land that is currently occupied by a tenant or licensee. What steps do you need to take?

If your land is agricultural land then your tenant is likely to be occupying as an agricultural tenant either under an agricultural holding under the Agricultural Holdings Act 1986 or a farm business tenancy under the Agricultural Tenancies Act 1995. 

If your tenant has a farm business tenancy (FBT) the agreement might also include a break clause that entitles you to bring it to an end early. If there is no break clause then you will need to consider the appropriate method for bringing it to an end and this will depend on whether it is a fixed term tenancy or a periodic tenancy and on the length of the tenancy term or duration of the periods, as different rules will apply. 

For example, if the FBT is granted for a term of 3 years ending on 25 June 2020, you will need to give at least 12 months’ written notice expiring on the contract expiry date i.e. serving your 12 months’ notice by 25 June 2019. If you overlook serving this notice and only realise this in say July 2019, it will then be too late to end the tenancy on 25 June 2020 and the earliest date you can then validly end the tenancy will be the following year on 25 June 2021! 

It is probably sensible to get some advice well in advance, to check what the agreement says and to make sure that a critical date is not Farm landmissed. It might also be sensible to speak to your tenant and see if a commercial solution can be reached.

If it is an agricultural holding (AHA) tenancy then the law has a particular type of notice to quit that can be used where a landowner requires the land back for a use that is other than for agriculture: this is a “Case B notice”. The Case B notice can be used provided that actual or deemed planning permission has been granted.

Ideally a notice to quit would be the last resort and you would have spoken to your tenant and tried to agree a sensible compromise at an early stage not least because Case B notices can be challenged and a tenant then has the upper hand in terms of his ability to delay and upset your project timetable and will, even if you are successful, still be entitled to compensation for disturbance.  

And finally, if your tenant is in fact a business tenant with statutory protection then again you will need to check the lease and obtain advice about notices. If your ‘tenant’ is not a tenant but a licensee e.g. under a grazing licence, then recovering possession should be straightforward but again you need to think in advance and factor in any notice period into your plans.

For advice on avoiding disputes when preparing for diversification or any other litigation or dispute matter, please contact Johanne Spittle on 01904 716018 or email johanne.spittle@warekay.co.uk

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