A new Code of Practice has been launched to encourage landlords and tenants of agricultural holdings to improve co-operation on farm projects.
The Code is for those who are looking to pursue projects, participate in schemes or otherwise undertake works on tenanted land which require the other party’s consent.
The Tenant Farmers Association (TFA), together with other members of the Tenancy Reform Industry Group (TRIG), on Defra's request, published the Code.
A similar Code was published in 2004, to encourage agreements between landlords and tenants regarding agri-environment schemes and diversification on farms.
The new Code follows a lot of the same principles but reflects the types of proposals landlords and tenants may be more likely to be pursuing now.
It is designed to assist landlords and tenants in approaching the other party to present proposals and to eventually reach an agreement.
It sets out five steps from encouraging early consultation to formalising any agreement that’s reached in writing.
The Code also advises what the parties may do if an agreement cannot be reached and sets out examples of what might be considered reasonable grounds for consent to be refused.
Although the Code is set out predominantly on the basis of a tenant approaching a landlord for consent, the TFA said it could easily be inverted for landlords approaching tenants.
Caroline Foot, senior adviser at TFA, who helped write the Code said: “Tenants and landlords should always check their tenancy agreements as the first port of call, because consent of the other party may not always be required.
"However, where consent is required, the new Code provides detailed but practical advice on how to open and conduct a reasonable discussion on proposals, and what might be considered reasonable grounds for refusing consent.”
She added: “It is always hoped that formal dispute resolution can be avoided where the parties are acting reasonably, but the Code helpfully sets out the formal procedures available in certain situations, if an agreement just isn’t possible."
Importantly, the Code provides advice about how to use the provisions within the Agriculture Act 2020 and its associated regulations.
It provides tenants occupying under the Agricultural Holdings Act 1986 with the ability to object to a landlords unreasonable refusal to allow them access to government financial assistance schemes or to complete works necessary to fulfil statutory duties.
Those provisions do not extend to tenants with Farm Business Tenancy (FBT) agreements under the Agricultural Tenancies Act 1995.
Ms Foot said it was 'disappointing' that the dispute resolution provisions of the Agriculture Act 2020 did not extend to tenants on FBT agreements.
The TFA had highlighted the importance of this issue during the passage of the Agriculture Bill, given that the freedom of contract granted to FBTs 'is not used as effectively as it could be'.#
"The lack of supply of land and farms to rent coupled with very high demand allows landlords greater say in what terms are inserted into FBTs," Ms Foot said.
"It is not as easy for tenants to negotiate more reasonable terms as some, including Defra, might think.
"However, this Code still provides advice for those who do not have arbitration to fall back on, and first and foremost it is encouraging parties to avoid getting to that stage anyway,” she added.
