Is the agreement a grazing licence or farm business tenancy?

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

  • Is the agreement a grazing licence or farm business tenancy?
  • What is a grazing licence?
  • What is a farm business tenancy?
  • Substance over form
  • Choosing between the two
  • Duration and regaining possession
  • Buildings, improvements etc
  • Grants and payments
  • Grazing horses

Is the agreement a grazing licence or farm business tenancy?

What is a grazing licence?

A grazing licence is an agreement under which a landowner allows a grazier to use the landowner’s land to graze animals belonging to the grazier with no intention or expectation that the grazier will have exclusive possession of the land. A grazing agreement is a profit à prendre and gives the grazier the right to take grass from the land by grazing it with animals.

A grazing licence will often be granted for the summer season (April to October), but can be granted for any period and at any time of year.

There is no statutory regulation of grazing licences.

See Practice Note: Grazing agreements.

What is a farm business tenancy?

An agricultural tenancy granted on or after 1 September 1995 will be a farm business tenancy (FBT) governed by the Agricultural Tenancies Act 1995 (ATA 1995). The only exception is where a tenancy granted after that date is a succession tenancy under the Agricultural Holdings Act 1986 (AHA 1986). Succession tenancies only arise in the following circumstances:

  1. where a tenancy granted before 12 July 1984 is one to which AHA 1986 applies, the tenant automatically enjoys statutory rights of succession

  2. where a tenancy granted on or after 12 July 1984 and before 1 September 1995 is one to which AHA 1986 applies, the tenant enjoys

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