by Frank Smith, Managing Partner
A new Code of Practice has been released by the Tenant Farmers Association (TFA) together with the Tenancy Reform Industry Group (TRIG) at DEFRA’s request, in a bid to simplify the way farmers adapt their businesses as BPS payments are phased out, and to encourage Landlords and Tenants to improve co-operation on ELM farm projects.
The Practice sets out a five-step process for those wishing to pursue projects such as agri-environmental schemes or otherwise undertake works on tenanted land that would have either been refused or have required the other party’s consent.
Although the guidance has similar characteristics to its former counterpart which was released in 2004, the new Practice provides for greater focus on how parties should approach one another to present their proposals with the aim of reaching agreement. The need has arisen from the Government’s plan to phase out Basic Payments (BPS) and with the introduction of the new Environmental Land Management (ELMs) arrangements, farmers are looking at alternative methods to capitalise on these subsidies.
Before seeking consent from a Landowner to perform a statutory duty or to sign up to an ELM scheme, it is important for Tenant’s to review the terms of their tenancy agreement as not all proposals require consent. However, where an activity does require consent, the Code of Practice suggests that before making an application, it is good practice for the Tenant to check their position. For example, the Tenant may have stronger grounds if the rent is paid on time and that there has been no breach of the tenancy agreement. Additionally, the Tenant or their Agent should approach the Landlord at the earliest possible opportunity to discuss the terms of the proposals, preparation, timetables and to agree what further information will need to be provided to support a request for consent.
The Guidance suggests that the amount of written information that the Tenant submits should be proportional to the scale of their project. For example, a scheme that requires large diversification will require a detailed application and extensive justification compared to a change of crop.
The Landlord should then give careful consideration to the Tenants proposal and provide a written response to the proposal, confirming approval, proposing approval subject to specified conditions or refusing consent by giving valid reasons for doing so. Once the terms have been agreed, the provisions should be confirmed in writing by a professional adviser.
Where a landlord or Tenant withholds consent from the other party, the party in search of consent may refer their request to arbitration.
Frank Smith and Co Solicitors have assisted its clients on Tenancy Agreements for over half a decade.
If you are either a Landlord or Tenant and wish to discuss an Agricultural Tenancy, please contact Frank Smith & Co Solicitors on 01242 801748.