In this edition’s guest slot, barrister Christopher McNall looks at the difficulties of recovering possession of development land from tenant farmers under the Agricultural Holdings Act 1986.
This article takes a look at what you can do when the land you want to develop has a tenant farmer on it, whose tenancy is one which falls under the Agricultural Holdings Act 1986, and who refuses to go quietly.
This can prove to be a very thorny subject.
Tip 1 – Don’t leave it to chance – speak to a good solicitor!
Tenancies under the 1986 Act are notoriously secure, and it can prove to be difficult, time-consuming and expensive to recover possession. But it can be done…with skill and effort.
Tip 2 – Leave as much time as you can for the legal process to run its course!
One way to recover possession is to bring the agricultural tenancy to an end by using a ‘special case’ notice to quit. Special Case ‘B’ of the 1986 Act says that “The notice to quit is given on the ground that the land is required for a use, other than for agriculture – (a) for which permission has been granted on an application made under the enactments relating to town and country planning […] and that fact is stated in the notice.”
These words are short and simple. Doubtless, the wording was intended by Parliament to be easy to understand and apply. But the operation of Case B has generated a lot of legal wizardry. For example: What does ‘is required’ mean? Does ‘is’ refer to the date of service of the notice, its expiry, the hearing date, or some other date entirely? What does ‘required’ mean anyway? Does it imply a time limit within which development must begin? If so, what is it? How does this engage when there is staged development? Is an outline permission good enough, or do you need full permission? What about the non-fulfilment of reserved matters? What is non-agricultural use? Does it include landscaping, allotments, or wildflower meadows? These are only some of the issues. There are many others.
None of this will matter if the tenant agrees to go. But a tenant who does not want to go, or who wants to play for time (hoping that the pressure on the landlord will increase to the point where the landlord will just write a big fat cheque) can require the landlord to refer the Case B notice to arbitration by a surveyor, who will be appointed by the President of RICS, but paid for by the parties.
A warning: although arbitration is supposed to be quick, cheap and informal (and certainly quicker, cheaper and more informal than Court proceedings) it often proves otherwise. A surveyor is not a lawyer. Surveyors sitting as arbitrators often appoint legal ‘assessors’ – again, paid for by the parties! And there the fun and games begin. Arbitration hearings involve the hearing of evidence from witnesses, cross-examination, legal argument, objections – just like a real trial (but without the wigs and gowns).
These arbitrations are usually conducted in private, behind closed doors, and lead to an arbitral award which is confidential to the parties. By and large, no-one (except the few repeat players in the market) really knows, except anecdotally, which Case B Notices are upheld, and why – and which are not, and why not. There are some standard battle-lines, and repeat players know which arguments are genuine runners, and which are not.
But landlords have to get it right because an arbitral award can only be appealed if there has been a ‘serious irregularity’ in the procedure or an ‘error of law’ which is so bad that the arbitrator’s decision is ‘obviously wrong’. These are much narrower appeal gateways than apply to ordinary civil judgments. If you are on the wrong end of an arbitral award that you don’t like, your prospects of successfully appealing are slight, and you may well be saddled with it.
Some other thoughts:
If there is a written contract of tenancy, what does it say about the recovery of possession for the purposes of building or development? How are you going to make use of that?
How are you going to serve the notice – and prove that it has been served, in case the farmer denies receipt of the notice (perhaps having discreetly disposed of it in the nearest slurry lagoon)?
What is your development timescale? Is it too short (meaning you risk being held to ransom by the tenant)? Is it too long (meaning that you risk losing an argument about ‘is required’). Is it a Goldilocks notice (‘just right’)?
What do you need the notice land for? Is it for asphalt, bricks and mortar, or something a bit softer and greener? If the latter, how will you deal with any argument that this is still agricultural use?
Are there any further legal obstacles in the way of development? Can you break ground elsewhere in the development without dealing with this bit first?
As Sergeant Esterhaus used to say in ‘Hill Street Blues’ – ‘Be careful out there’.
Christopher McNall is a barrister at 18 St John Street Chambers, Manchester.