Schedule 3: Agricultural tenancies
- Schedule 3 Part 1 specifies amendments to the Agricultural Holdings Act 1986 ("the 1986 Act") and Part 2 specifies amendments to the Agricultural Tenancies Act 1995 ("the 1995 Act") as enabled by section 36 of this Agriculture Act.
Part 1 Introductory
- Paragraph 1 provides that the 1986 Act is amended as set out below.
- Paragraphs 2 and 3 amend section 12 and Schedule 2 of the 1986 Act to replace a demand for arbitration in the rent review process with a notice of determination which may be followed by either arbitration or third-party determination if the rent review is not agreed by the parties. This enables a third-party to be appointed to resolve a rent dispute at any time before the rent review date (where both parties agree to that appointment) as an alternative to arbitration.
- Paragraphs 4 to 6 make amendments to sections 12, 22, and 84 of the 1986 Act to provide that the President of the Royal Institution of Chartered Surveyors (RICS), the President of the Central Association of Agricultural Valuers (CAAV), and the Chair of the Agricultural Law Association (ALA) are listed as persons that tenants and landlords may apply to for the appointment of an arbitrator to resolve disputes arising under the 1986 Act. These amendments widen the list of persons able to make such appointments from the current provision of only the President of RICS so that a wider pool of arbitrators is made available and tenants and landlords have more choice. Paragraphs 6(7) and 6(8) enables the Secretary of State in relation to England and the Welsh Ministers in relation to Wales to make regulations to amend the list of persons able to appoint arbitrators so that the list can be updated as needed from time to time.
- Paragraph 7 amends the 1986 Act by adding a new section 19A providing powers for the Secretary of State in relation to England and the Welsh Ministers in relation to Wales, to make provision through regulations to enable tenants to refer to arbitration or third party determination requests for landlord’s consent to activities that are restricted under the terms of their tenancy agreement or requests for a variation of terms, where that request:
- in relation to England relates to the tenant accessing financial assistance schemes under sections 1, 2(4) and 21 of the Agriculture Act, or so that the tenant can meet a statutory obligation; or
- in relation to Wales relates to the tenant accessing financial assistance in exceptional market conditions under paragraph 7 of Schedule 5 of the Agriculture Act, or so that the tenant can meet a statutory obligation.
Arbitration or third-party determination of rent: relevant factors
- Paragraph 8 amends Schedule 2 of the 1986 Act (which sets out the process for arbitration or third party determination of rent review disputes) to specify that if, by written agreement, the tenant has agreed to make payments to the landlord for improvements to the holding that are wholly or partly financed by the landlord, such payments are to be disregarded from considerations of changes to rent and also that any benefit from the improvement to the tenant is also to be disregarded from rent considerations whilst the tenant is still making payments for that improvement.
- Paragraph 9 amends Part I of Schedule 3, Case A of the 1986 Act (which governs the procedure for notices to quit for some tenants of Local Authority Smallholdings) by removing sixty-five as the specified age when a retirement notice to quit can be issued by the landlord and replacing it with pensionable age (the age at which the tenant can claim their State Pension as defined by Part 1 of Schedule 4 of the Pensions Act 1995). This updates the Case A provisions so that they are in line with State Pension legislation.
- Paragraphs 10 to 16 amend the 1986 Act to repeal all provisions relating to the Commercial Unit Test (which specifies that an applicant succession tenant who already occupies a commercial unit of land is not eligible to succeed to an Agricultural Holdings Act tenancy) so that these provisions will no longer apply when the provision is commenced. Section 57 of the commencement provisions of this Agriculture Act provides that the provisions in this Schedule 3 will come into force two months after Royal Assent, except for the provisions relating to the repeal of the Commercial Unit Test and the Suitability Test which will come into force by regulations made by the Secretary of State in relation to England and the Welsh Ministers in relation to Wales. This is so that the repeal of the Commercial Unit Test provisions will not take effect until the new Suitability Test regulations are made and commenced.
- Paragraph 17 of this Schedule amends section 39(8) of the 1986 Act (applications for tenancy of holding) to confer a power on the Secretary of State in relation to England and the Welsh Ministers in relation to Wales, to make regulations specifying the criteria that must be considered when determining a person’s suitability to become a tenant of the holding and also to have regard for any views stated by the landlord on the tenant’s suitability. The provision specifies that the regulations must relate to the person’s capacity to farm the holding commercially to a high standard of efficient production and care for the environment. The provisions also specify that the regulations may include criteria such as the person’s experience, training or skills in agriculture and business management, the person’s health, financial standing and character and criteria relating to the character and condition of the holding and the terms of the tenancy.
- Paragraph 18 makes consequential amendments to other sections of the 1986 Act relating to this new provision.
- Paragraphs 19 and 20 make amendments to sections 51 and 53 of the 1986 Act to repeal the minimum age of sixty-five before which applications to the First-tier Tribunal (Property Chamber) Agricultural Land and Drainage Tribunal for succession on retirement can be made, so that applications for succession on retirement may be made at any age in future.
- Paragraph 21 amends section 94 (orders and regulations) of the 1986 Act to update the provisions relating to powers to make regulations and orders so that they reference either House of Parliament in the case of a statutory instrument made in England by the Secretary of State or Lord Chancellor, and the Senedd Cymru in relation to a statutory instrument made by the Welsh Ministers in Wales.
Part 2 Introductory
- Paragraph 22 provides that the 1995 Act is amended as set out below.
- Paragraphs 23 to 29 make amendments to sections 12, 19, 22, 28, 30, 38 and 39 of the 1995 Act to extend the list of professional authorities that tenants and landlords may apply to for the appointment of an arbitrator to resolve disputes arising under the 1995 Act so that it is the same as those listed in section 84 of the 1986 Act. This extends the list of professional authorities able to appoint arbitrators under the 1995 Act from the current provision of only the President of the Royal Institution of Chartered Surveyors (RICS) to include the President of the Central Association of Agricultural Valuers (CAAV) and the Chair of the Agricultural Law Association (ALA) so that a wider pool of arbitrators is made available and tenants and landlords have more choice. Any changes made to that list by regulations made under the powers given to the Secretary of State in relation to England and the Welsh Ministers in relation to Wales (in section 84 of the 1986 Act) will also apply to the 1995 Act.
