The Agricultural Landlord and Tenant Code of Practice for England, writes Kayleigh Ireland, Senior Associate Legal Executive Commercial Property Specialist at Whitehead Monkcton.
The Agricultural Landlord and Tenant Code of Practice for England came into force on 8 April 2024 with the aim of balancing the rights and interests of both landlords and tenants. This is the first time that a code has been issued in respect of agricultural tenancy agreements.
The code is voluntary and is designed to improve working practices “in the interests of a thriving agricultural tenanted sector”. It has been designed to supplement existing law and regulation and does not expand or amend existing laws or create any new legal obligations.
The code has been founded on three principles – clarity, communication and collaboration – and was implemented following the Rock Review with the intention of establishing and maintaining positive, productive and sustainable commercial relationships.
Clarity: all parties involved should be clear as to their intentions, expectations and in respect of any problems that may arise between landlord and tenant.
Communication: should be dealt with in a timely manner, with parties providing clarity at all times, consideration being made to the needs and circumstances of the recipient of such communication.
Collaboration: collaboration and cooperation between parties is encouraged by the code.
The code uses the word “should” to specify acceptable standards which are regarded as the minimum applicable under the code unless there are good reasons for departing from it. Other expressions like “may consider” are used for actions which are also desirable but may not be appropriate or necessary in all circumstances.
The hope is that landlords, tenants and their professional advisers will work together constructively in applying the code to tenancy negotiations and, post-completion, in respect of such matters as rent payment, rent review, disputes, renewal and termination (including succession).
Grant of tenancy, selection of tenant and agreement of terms
If a tenancy has been offered in the open market, amongst other things the landlord should provide sufficient information including key terms, comprehensive replies to the prospective tenant’s queries and the opportunity to view the farm land involved.
Rent payment and review
Landlords should provide their tenant with clear instructions as to how and when rent should be paid. If the tenant finds themselves unable to honour rent payment terms, they should notify their landlord immediately. Any renegotiated terms should be documented in detail for future reference.
Disputes
In the event of dispute, the code endorses “a fair, practical and cost effective resolution” for both landlord and tenant.
Termination and renewal (including succession)
Parties should be “as open as is commercially possible with one another” in respect of their intentions for the land held under the tenancy. A tenant should keep the landlord informed of their plans for renewal or termination of the tenancy so that future plans for the land can be made. It is noted that a renewal of a tenancy “is an opportunity to correct problems and adapt to new circumstances”. If a tenancy is to be terminated, parties should proceed to agree improvements or dilapidations that need to be dealt with in good time before the end of the tenancy.
The code is a positive introduction, and one we agree will be for the good of the agricultural industry as a whole, as those who produced it intended.
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