Agricultural tenancies — end of tenancy compensation
Agricultural tenancies — end of tenancy compensation

The following Property guidance note provides comprehensive and up to date legal information covering:

  • Agricultural tenancies — end of tenancy compensation
  • Tenant claim
  • Landlord claims

On the termination of an agricultural tenancy, both the landlord and the tenant may be entitled to compensation. The basis for compensation is mainly statutory, under either the Agricultural Holdings Act 1986 (AHA 1986) or the Agricultural Tenancies Act 1995 (ATA 1995), but common law and customary rights to compensation continue to play a small residual role.

Compensation for milk quota, where the tenancy is protected under the AHA 1986, is subject to a separate compensation code under the Agriculture Act 1986. Milk quota was abolished on 31 March 2015.

Tenant claim

Tenant-right

A tenant under a tenancy which is protected under the AHA 1986 and which was entered into after 1 March 1948 is entitled to compensation for ‘tenant-right’.

Tenant-right is undefined by the Act, but describes the compensation to which an agricultural tenant is entitled under custom for expenditure on materials and labour (such as the value of growing crops) which does not translate directly into a compensatable improvement. Earlier agricultural legislation did not allow recovery of compensation for tenant-right, but the various matters which qualify as tenant-right are now listed in AHA 1986, Sch 8, Part II.

See Tenant’s Improvements below for the position in relation to tenant-right under the ATA 1995.

Disturbance

Compensation for disturbance is recoverable under the AHA 1986 Act, but not the ATA 1995,