Are you involved in a family farming partnership, where nothing has been reduced to writing over the years?
If so, the Court of Appeal has just provided some welcome clarification on a number of grey areas.
In Procter v Procter and others [2021] the Court of Appeal has confirmed that a tenancy can be inferred from conduct at common law or created entirely orally, despite a partial overlap between the identities of landlord and tenant. In such circumstances, there has to be exclusive possession for a tenancy to exist. The Court has confirmed that this is possible.
Where the parties overlap, they are entitled to different rights in two capacities; as a landlord they may exercise their right of receipt of rent and profits and as a tenant, the right of physical possession to the land.
The Court has provided clarification for parties in such circumstances where additionally, the tenancy is deemed a tenancy at will. The Court ruled that a tenancy at will is a true tenancy and can be protected by the Agricultural Holdings Act 1986, subject to certain conditions.
The Court further held that the land subject to the tenancy in this case could be protected by the Agricultural Holdings Act 1986, as the tenancy remained agricultural in nature, despite the fact that the land had a mixed agricultural and non-agricultural use.
The decisions made in this ruling provide clarity in relation to a situation that regularly arises in diversified family farming partnerships, where not all partners are freeholders and little or nothing has been reduced to writing over the years. The presence or absence of a tenancy (especially the presence or absence of an Agricultural Holdings Act 1986 tenancy with full blown security of tenure) can have important practical implications in terms of security of tenure for family members who wish to continue farming, as well as for freeholders who do not and would rather sell the land. Furthermore, the presence or absence of a tenancy can have significant tax implications for the parties involved.
At Gepp Solicitors we advise on all aspects of Agricultural Law. If you have any questions on this development, or require advice, please do not hesitate to get in touch with Edward Worthy on 01245 493939 or worthye@gepp.co.uk or Danny Carter on 01245 961139 or carterd@gepp.co.uk
