On the 8th April 2024 a new Code of Practice was launched to encourage “clarity, communication and collaboration” in the Agricultural tenancy sector.
The Code was produced by a working group of experts representing interested parties from across the Agricultural tenancy sector who were tasked with trying to help remedy issues with the sector that were identified by the 2023 ‘Rock Review’. This review found that despite Landlords and Tenants both wanting to do what was best for the holding, the environment and food production the parties are often restricted from doing so as a result of a lack of communication between the parties and/or a lack of flexibility with existing tenancy agreements.
Although the Code does not change the existing law in relation to Agricultural tenancies and is not legally binding it is intended to be adopted by Landlords and Tenants and their professional advisors going forward in order to better relationships and processes and to generally improve the sector as a whole. As the Code is also to be considered by Arbitrators or Experts (where they are able to do so) when resolving any disputes that might arise it is recommended that all interested parties are aware of the Code and its recommendations and endeavour to comply with these as fully as possible.
Some of the key aspects of the Code that jumped out to us as professional advisors to both Landlords and Tenant were as follows:-
(a) Landlords should be open and honest in their communication with any prospective Tenants as to the proposed terms of the Agreement being offered whilst being flexible where and as far as possible. This includes the Landlord’s proposed term of the tenancy, whether any rent review provisions will be required and whether the Tenant will be permitted to enter into any agri-environmental schemes etc. It is clear that the Code is encouraging full and open dialogue on these points (as others) in order to avoid any unnecessary surprises when negotiating the terms of a formal tenancy agreement and which can only make the process more straight forward and cost effective.
(b) Tenants should in turn be open and honest about their expertise and any proposals for the Holding to ensure that they are a good fit for the proposed tenancy.
(c) The Code reiterated the need for the parties to enter into formal written tenancy agreements but that this should be fair to both parties and should reflect the individual circumstances and intentions of the parties. Tenancy Agreements, especially long-term ones, should try and provide flexibility and should be varied in writing (as and when required) in order to ensure that it remains fit for purpose and reflect any changes in circumstances and that all parties should be open to discussions regarding proposed periodic changes.
(d) Landlords and Tenants should seek to maintain open, honest and productive communication with each other throughout the term of the tenancy even when (and perhaps particularly when) dealing with termination. If either party always intended for the arrangement to be for a short term only then it should be made clear that a renewal is going to be unlikely.
(e) If a dispute arises then both parties should continue to act fairly and proportionately with each other to try and resolve the issue in a timely and cost-effective manner.
(f) The Code reminds everyone that Landlords and Tenants should always seek professional advice from competent and experienced advisors who are aware of the Code and its implications on the parties’ proposals.
Finally, we join the authors of the Code in hoping that all interested parties in the Agricultural sector do proactively engage and adopt the Code wherever possible and that this helps develop improved and collaborative relationships between Landlords and Tenants and that together they can help protect the sector for future generations.
About the author
Based at our offices in Worcester, Tom Bell is a Partner within our award-winning Agricultural and Rural Affairs Division.
If you require any advice relating to any rural-related issues, please do not hesitate to contact Tom through 01905 610410, or email tom.bell@mfgsolicitors.com
Readers can also connect with Tom on LinkedIn through Tom Bell LinkedIn.
Comments