Warning over farming tenancies

An expert in rural law has warned farmers to consider tenancy agreements when it comes to planning for succession.

Melissa Taylor, solicitor in the rural team at law firm Napthens, warns that the tenancy provisions for tenanted farms can be complex and should be considered and reviewed as a priority for any tenant farmer planning their succession.

Older tenancies, drawn up between 1976 and 1984, often allow for two successions – e.g. successions to the tenancy from father to son or daughter to cover three generations.

However, an application for succession must be made within the strict three month period from the date of the tenant’s death. There are also strict rules governing who can succeed.

Modern tenancy agreements may not have such an automatic right to succession, and once the owner of the farm has died the landlord may often be entitled to recover possession of the property.

Melissa warns that both options mean succession planning – understanding who will take on a farm upon retirement or death of the tenant, often a family member – is vitally important.

She said: “Many farms are family businesses, but we still see plenty of owner occupying farmers and tenanted farmers who have not thought about succession.

“Many simply assume their son or daughter will take over the business, but often it is not so simple. The next generation may not want to continue to be involved in the business, or the tenancy agreement may not allow for a straightforward succession.

“It is therefore important to ensure that succession planning takes place, for example by considering options following the death of a tenanted farmer and completing a Will to identify their wishes and assist the continuation of a farming business. “Many farmers worry that this planning will be expensive, but over the course of a tenancy agreement or the life of a farmer it is nothing, and the cost is worth it to ensure the business continues to operate.”