Secure the future of the ag-tenanted sector, says ALA

The Agricultural Law Association (ALA) is calling on professionals to respond to Government consultations on tenancy reform to secure the future of the agricultural tenanted sector.

The proposed changes to the Agricultural Holdings Act 1986 and the Agricultural Tenancies Act 1995 are intended to provide legislative support to the developing policy in the sector, explains Mike Holland, secretary and adviser to the ALA. “However, now is a key opportunity for industry stakeholders to consider the proposals which are drawn from the work of the Tenancy Reform Industry Group (TRIG) in 2017.”

The proposals could mean a big overhaul for the sector in England and Wales: From changes to succession rights to removing investment barriers and introducing short notices to quit, there are opportunities for both landlords and tenants.

It is hoped that the proposals will encourage landlords and tenants to have closer working relationships in future in order to improve productivity, he explains. “However, we need to consider whether the proposals assist or impede progress in the tenanted sector which is why it’s vital that professionals respond to the consultations to ensure the new legislation meets the sector’s needs.

“Much of the focus has been on the people who manage holdings since TRIG 2017 and moving forward maximising the outcome from any new support regimes will need greater cohesion between landlord and tenant.”

Besides future support policies, developing better relationships between both parties could mean having more frequent progress reviews about the holding rather than just the three-yearly rent review, for example, he explains. “If this is a rare occurrence now, it needs to change, whether through legislation or pure industry best practice. We need a culture change: The adoption of an annual tenant/landlord meeting, with a constructive and co-operative approach at its heart, could unlock much-needed improvements – beyond the legislative changes.”

When it comes to establishing new tenancies or reviewing old ones, it’s also a good idea to encourage clients to go a bit further than signing up to an ‘off the shelf’ agreement, says Mr Holland. “In many cases this has been the easiest and most cost-effective means of agreement. However, exploring the long-term objectives of the parties may result in a more bespoke arrangement to reflect these. There is no one size to fit all approach.”

It might be the case that other agreements are required to operate alongside tenancies, for example, a joint venture, contract farming agreement or lease for diversification, he adds.

The next step is for as many advisers as possible to actively engage with the consultations and submit responses at this vital time for the sector, says Mr Holland. “It is key, that as advisers, we also need to adopt a process of change, parallel to the sector we serve.”

  • The deadline for responses to be submitted is 2 July.
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