The key practical issue for estate landlords is the distinction between incontestable and contestable Notices to Quit. An incontestable NtQ (Cases B, D, E, F, or G in Schedule 3 Part I of the AHA 1986) takes effect without ALT consent — but the landlord must establish the relevant Case on the facts. The most commonly relied-upon are Case D (breach of a Remediation Notice — at least 6 months must be given to remedy non-monetary breaches) and Case G (death of the tenant — the NtQ must be served within 3 months of the landlord being notified of the death by the personal representatives). If neither party triggers a Case G NtQ in time, the succession rights provisions (Part IV) may apply.
Succession rights are the most significant protection for AHA 1986 tenants and the most significant concern for estate landlords. An eligible close relative — spouse; civil partner; child; sibling; or parent — who has been substantially employed on the holding for 5 of the last 7 years and who depends on the holding as their principal source of livelihood can apply to the ALT for a new tenancy. The ALT will then assess suitability. Up to two successions are possible; the third generation does not have succession rights, so eventually the landlord can recover possession.
AHA 1986 security of tenure, notice to quit grounds (Cases D-G), contestable NtQ (ALT consent), succession rights and arbitration rent reviews
The complete AHA 1986 framework for agricultural estate landlords:
- Security of tenure, valid Notice to Quit, incontestable Cases (Sch 3 Part I AHA 1986) and contestable NtQ (ALT consent — fair and reasonable landlord test): SECURITY OF TENURE (AHA 1986 s.24-27): a tenant under the AHA 1986 has statutory security of tenure — the tenancy does not end at the expiry of the contractual term; the landlord must serve a NOTICE TO QUIT (NtQ) under s.25 AHA 1986 to start the process of recovering possession: the NtQ must: (a) be in writing; (b) give at least 12 months' notice; (c) take effect at the end of a year of the tenancy (i.e., the anniversary date of the tenancy); the NtQ must be served on the tenant personally or sent by recorded delivery. INCONTESTABLE CASES (Sch 3 Part I AHA 1986): where the landlord can establish one of the following Cases, the NtQ takes effect without the Agricultural Land Tribunal's consent — the tenant has no right to serve a Counter-Notice: CASE B: the land is required for a purpose other than agriculture for which planning permission has been granted (or for which planning permission is not required); the landlord must specify the non-agricultural purpose; CASE D: the tenant has failed to comply with a written notice to remedy a breach of the tenancy agreement within a specified time — the 'Remediation Notice' process: the landlord serves a written notice specifying the breach and requiring remedy; for non-monetary breaches, the tenant must be given AT LEAST 6 MONTHS to remedy (for breaches of repair and maintenance obligations — often 12-18 months is given to allow seasons for agricultural repair work); for monetary breaches (failure to pay rent), the notice need only require remedy within 2 months; if the tenant fails to remedy within the specified time, the landlord can then serve a Case D NtQ; CASE E: an irreparable breach of a term of the tenancy that is incapable of being remedied by compliance with a Remediation Notice (e.g., the tenant has committed an act that permanently and irreversibly damages the holding — subsoil damage; serious mismanagement causing permanent loss of agricultural productivity); CASE F: the tenant is insolvent or bankrupt; CASE G: the tenant has died and the NtQ is served within 3 months of the landlord being notified of the death by the personal representatives; CRITICAL TIMING FOR CASE G: the NtQ must be served within 3 months of the personal representatives NOTIFYING THE LANDLORD of the death — if the landlord fails to serve within 3 months, the Case G route is lost; the tenant's estate remains as tenant until the succession rights provisions are activated. CONTESTABLE NtQ: where no incontestable Case applies (the landlord serves a NtQ without specifying a Case, or specifies a Case that cannot be established on the facts), the tenant can serve a COUNTER-NOTICE within 1 month of service of the NtQ, demanding that the NtQ shall not have effect without the consent of the Agricultural Land Tribunal (ALT — the specialist tribunal for agricultural tenancy disputes in England and Wales); the ALT must consent to the NtQ taking effect if, and only if, the landlord can satisfy the ALT that it is 'fair and reasonable' (s.26(2) AHA 1986) for the tenant to give up possession — the ALT weighs the relative hardship to landlord and tenant; the landlord's reasons for wanting possession (personal farming; development; re-letting on better terms); the tenant's agricultural livelihood dependence; in practice, establishing that a contestable NtQ should take effect is very difficult for the landlord — the security of tenure for AHA 1986 tenants is very strong.
- Succession rights (Part IV, Sch 6 AHA 1986 — up to two generations); suitability test; retirement succession (s.49); arbitration rent reviews (s.12 — open market rent; disregard tenant's improvements and scarcity); and distinction from Farm Business Tenancies (ATA 1995): SUCCESSION RIGHTS (AHA 1986 Part IV; Sch 6): on the DEATH or RETIREMENT of an AHA 1986 tenant, an eligible close relative can apply to the ALT for a direction that a new AHA 1986 tenancy be granted to them (with the same terms as the existing tenancy, or such modifications as are agreed or determined). ELIGIBILITY REQUIREMENTS FOR A SUCCESSION APPLICATION: the applicant must be: (a) a CLOSE RELATIVE of the deceased/retiring tenant: spouse; civil partner; child (including adopted child); sibling; parent; (b) SUBSTANTIALLY EMPLOYED on the agricultural holding for at least 5 of the last 7 YEARS preceding the relevant date (death or retirement notice) — the employment must be 'substantial' (i.e., the main occupation; not merely occasional or incidental); (c) have passed the 'PRINCIPAL LIVELIHOOD TEST': the applicant's income from the agricultural holding is their principal source of livelihood (or would be, if they were the tenant). The SUITABILITY TEST (Sch 6 para 7-8 AHA 1986): if an eligible applicant applies, the ALT must also be satisfied that the applicant is a 'suitable person' to become the tenant of the holding — having regard to: (a) training and practical knowledge of agriculture; (b) practical experience in farming the holding or similar land; (c) financial resources available to the applicant; (d) the landlord's reasonable expectations for the proper management of the holding; the landlord can oppose the succession on suitability grounds — if the ALT is not satisfied with the applicant's suitability, the succession application fails. TWO SUCCESSIONS MAXIMUM: the AHA 1986 allows UP TO TWO SUCCESSIONS — (1) from the ORIGINAL TENANT → FIRST SUCCESSOR (on death or retirement of the original tenant); (2) from the FIRST SUCCESSOR → SECOND SUCCESSOR (on death or retirement of the first successor); THIRD SUCCESSIONS ARE NOT AVAILABLE: when the second successor retires or dies, the landlord can serve a Case G NtQ (on the death of the second successor) without any risk of succession; or terminate the tenancy at the end of the contractual term (in a retirement scenario) — and recover the land. This means that where the original tenant has now been succeeded and the successor is now farming, the landlord should track succession status carefully (whether any succession has yet been used, and whether any succession has already been used — limiting future succession claims). RETIREMENT SUCCESSION (AHA 1986 s.49-58): a retiring tenant (for age or other reasons) can nominate a close relative for succession; the nominated person must meet the same eligibility (relationship; employment; principal livelihood) and suitability criteria; if the nominated successor is suitable, the ALT grants a new tenancy; if unsuitable, the existing tenant's tenancy terminates. ARBITRATION RENT REVIEWS (AHA 1986 s.12): the rent of an AHA 1986 tenancy is determined initially by agreement; thereafter, either party can demand a rent review by arbitration — but: (a) no more frequently than ONCE EVERY 3 YEARS; (b) if there has been a previous rent arbitration, no review can be demanded until 3 years after the effective date of the previous award; the arbitrator determines 'open market rent' — the rent at which the holding might reasonably be expected to be let between a prudent and willing landlord and a prudent and willing tenant, assuming: a 3-year yearly tenancy; vacant possession; and the landlord has agreed to carry out any improvements required as a condition of planning permission or by statute; the arbitrator MUST DISREGARD: (a) any tenant's improvements (including tenant's fixtures); (b) any improvements made with grant aid; (c) any element attributable to the scarcity of comparable land to let in the area (i.e., no 'hope value' or scarcity premium applies); (d) any increase in value due to the tenant's occupation. FARM BUSINESS TENANCIES (FBTs — AGRICULTURAL TENANCIES ACT 1995): all new agricultural tenancies created on or after 1 September 1995 must be FBTs; key differences from AHA 1986 tenancies: (a) NO SECURITY OF TENURE — the FBT ends at the agreed term; no need for an NtQ; (b) NO SUCCESSION RIGHTS — no close relative succession; on the death of the FBT tenant, the tenancy passes to the estate and ultimately ends at the contractual term; (c) NOTICE TO TERMINATE: at least 12 months' notice to terminate an FBT; for FBTs with a fixed term of 2+ years, at least 2 years' notice before the end of the fixed term is required to prevent the tenancy from continuing as a yearly tenancy; (d) RENT REVIEW: entirely by agreement — parties can agree when reviews occur, the process, and the basis; most FBTs use 3-year open market rent reviews similar to AHA 1986 arbitration; (e) LANDLORD FLEXIBILITY: FBTs provide much greater practical flexibility for estate landlords who wish to use the land for farming in hand, re-letting to a more productive tenant, or development, when the FBT term ends
Frequently asked questions
Can I remove an AHA 1986 tenant without the Agricultural Land Tribunal's consent?+
Only if you can establish an incontestable Case under Schedule 3 Part I of the AHA 1986. The most commonly relied-upon Cases are: Case D (failure to comply with a Remediation Notice — you must give at least 6 months for non-monetary breaches); Case E (irreparable breach); Case F (insolvency); and Case G (death — Notice to Quit must be served within 3 months of you being notified of the death by the personal representatives). For any NtQ that doesn't rely on an incontestable Case, the tenant can serve a Counter-Notice and demand ALT consent — which the ALT will only give if satisfied it is fair and reasonable for the tenant to give up possession.
How do succession rights work under the AHA 1986?+
On the death or retirement of an AHA 1986 tenant, an eligible close relative (spouse; civil partner; child; sibling; parent) who has been substantially employed on the holding for at least 5 of the last 7 years and who depends on the holding as their principal source of livelihood can apply to the Agricultural Land Tribunal for a new tenancy. The ALT will assess eligibility AND suitability (training; experience; financial position). Up to two successions are permitted — original tenant → first successor, then first successor → second successor. The third generation has no succession rights.
How often can an AHA 1986 rent be reviewed?+
Either party can demand an arbitration rent review — but not more than once every 3 years, and not within 3 years of a previous arbitration award. The arbitrator determines open market rent based on what a prudent and willing landlord and tenant would agree for a 3-year yearly tenancy. The arbitrator must disregard tenant's improvements, grant-aided improvements, and any scarcity element. This is significantly different from FBTs (Agricultural Tenancies Act 1995), where rent review terms are entirely a matter for the parties to agree in the tenancy agreement.
What is the difference between an AHA 1986 tenancy and a Farm Business Tenancy?+
AHA 1986 tenancies (pre-1 September 1995): strong security of tenure (landlord must serve NtQ; ALT consent usually required); succession rights (up to 2 generations); statutory arbitration rent reviews (minimum every 3 years; open market rent). Farm Business Tenancies (ATA 1995 — from 1 September 1995): no security of tenure (ends at agreed term); no succession rights; 12-month notice to terminate (2 years for FBTs over 2 years); rent review terms set by agreement. New AHA 1986 tenancies cannot be created; FBTs apply to all new agricultural tenancies.
- Farm Business Tenancies — Agricultural Tenancies Act 1995 →
- Agricultural occupancy conditions — tied cottage planning restrictions →
- Compulsory purchase orders — agricultural land →
- Inheritance tax — Agricultural Property Relief (APR) for farmland →
- Land contamination — EPA 1990 Part IIA; Phase 1 and Phase 2 surveys →
- Capital gains tax — disposal of agricultural land →