Two tenancies, two different worlds
Agricultural land in England and Wales is held under two very different regimes. The Agricultural Holdings Act 1986 (AHA) tenancies are the older form: long-term, heavily protected, with the tenant holding rights to succession, compensation for improvements, and security that makes the tenancy an asset in its own right. Very few new AHA tenancies can be created, but many remain in existence, often held by second-generation tenant farmers.
The Farm Business Tenancy (FBT), created by the Agricultural Tenancies Act 1995, is now the standard form for letting farmland. An FBT is essentially a commercial lease adapted for agriculture: fixed term, no automatic succession, and compensation limited to what the agreement says. Its flexibility is the point — landlords let land for one harvest or ten years, and both sides know where they stand.
The critical practical point is that the distinction is not created by the label on the document. A tenancy's terms and the circumstances in which it was granted determine its character. A poorly drafted agreement that was intended to be an FBT can, in the wrong circumstances, leave a tenant with rights nobody intended to give.
What an FBT should actually deal with
A well-drafted FBT is more than a term and a rent. It should cover: the land and plan; the permitted agricultural use, including any diversification; who bears which repairs and the condition of the land at the end (including soil health, which is increasingly a written requirement); the rent review mechanism; entry rights for the landlord to inspect; and the arrangements at the end of the term — clearance, dilapidations and compensation.
Modern pressures are also finding their way into FBTs. Environmental scheme commitments — whether the land is in a stewardship scheme, who claims the payments, who must comply with the conditions — can be worth more per acre than the rent itself, and getting the allocation wrong is a genuine dispute. Renewable energy options, telecommunication masts and development clauses all deserve thought before signature rather than renegotiation afterwards.
The end of the term matters as much as the start. An FBT ends on its expiry date without security of tenure, but the practical exit — harvesting, establishing crops, removing equipment, restoring the land — is what generates disputes. A short paragraph on end-of-term arrangements is the cheapest insurance in the document.
AHA tenancies: succession and compensation
Where an AHA tenancy exists, the landlord's freedom is sharply limited. Rent is subject to arbitration on statutory principles rather than open market review. Improvements made by the tenant attract compensation at the end of the tenancy. And in defined circumstances the tenancy passes on death or retirement to a close relative who has been working the holding — the succession right that has shaped the structure of tenanted farming for decades.
Because of that, AHA dealings need specialist advice in both directions. A landlord considering development needs to understand what terminates a tenancy and what merely interrupts it. A tenant family planning the next generation's involvement needs the succession rules checked years, not months, before they are relied on: eligibility has conditions around the applicant's livelihood and principal occupation.
The value at stake in an AHA tenancy is frequently measured in hundreds of thousands of pounds — the tenant's succession right and improvement claims are real assets, and the landlord's possession prospects are a real liability. Treating the paperwork casually at any point in that relationship is the expensive mistake.
Succession and the family farm
Farm succession is where legal and emotional questions meet: the parents who own, the child who works the land, the siblings who do not, and the partnership or company that may or may not reflect any of it. Wills, partnerships, tenancies and ownership all interact, and the commonest failure is that each was arranged at a different time for a different reason without anyone checking they still fit together.
A sensible succession review looks at the whole structure: who owns what, who farms what, what the partnership agreement says (or whether there is one at all), what the tenancies provide, and what the wills provide. The output is usually a sequence of modest changes — a partnership deed updated, an FBT granted to the next generation, a will redrafted — rather than one dramatic restructuring.
Burns & Co. Legal advises farmers, landowners and rural businesses on tenancies, land transactions, diversification and succession planning. If your tenancy or succession paperwork has not been reviewed in the last five years, it predates both the environmental schemes and the current family circumstances — both of which have a habit of changing the answer.