Q&As

Where: (a) in accordance with section 20(2) of the Agricultural Tenancies Act 1995 (ATA 1995) the landlord has provided a benefit in consideration of the provision of a tenant's improvement; and (b) the landlord and the tenant have also agreed to cap the compensation payable under ATA 1995, s 20(4A); is the reduction provided for by ATA 1995, s 20(2) applied to the compensation as capped under s 20(4A) and (4B) of the Act, or is the cap not taken into account for the purpose of ATA 1995, s 20(2), meaning that the compensation will be the lesser of the compensation calculated pursuant to the statutory formula (ie ignoring the cap) and the capped amount? Is there anything stopping the parties agreeing a nominal sum (ie £1) as the compensation limit?

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Produced in partnership with Chris Bryden of 4 King’s Bench Walk
Published on LexisPSL on 29/01/2020

The following Property Q&A Produced in partnership with Chris Bryden of 4 King’s Bench Walk provides comprehensive and up to date legal information covering:

  • Where: (a) in accordance with section 20(2) of the Agricultural Tenancies Act 1995 (ATA 1995) the landlord has provided a benefit in consideration of the provision of a tenant's improvement; and (b) the landlord and the tenant have also agreed to cap the compensation payable under ATA 1995, s 20(4A); is the reduction provided for by ATA 1995, s 20(2) applied to the compensation as capped under s 20(4A) and (4B) of the Act, or is the cap not taken into account for the purpose of ATA 1995, s 20(2), meaning that the compensation will be the lesser of the compensation calculated pursuant to the statutory formula (ie ignoring the cap) and the capped amount? Is there anything stopping the parties agreeing a nominal sum (ie £1) as the compensation limit?

Part III of the Agricultural Tenancies Act 1995 (ATA 1995) sets out provisions relating to compensation payable by a landlord to a tenant for improvements carried out by the latter in respect of a farm business tenancy. ATA 1995, s 15 defines ‘tenant’s improvements’ as any physical improvement made on the holding by the tenant by their own effort or wholly or partly at their expense, or any intangible advantage attached to the holding which is obtained for the holding by the tenant in the same manner. By ATA 1995, s 16, on the termination of the tenancy and the quitting of the holding, the tenant shall be entitled to obtain compensation in respect of any tenant’s improvement that is not removed or does not remain attached. However by ATA 1995,

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