IHTM24240 | Agricultural Tenancies Act 1995: Introduction

The Agricultural Tenancies Act 1995 applies only to farm business tenancies granted on or after 1 September 1995. A tenancy is a farm business tenancy for the purposes of the 1995 Act if it meets the business conditions (see below) laid down in the act and either the agriculture condition (see below) or the notice condition (see below).

The policy of the 1995 Act is to phase out security of tenure under 1986 Act tenancies as quickly as possible, by providing that as 1986 Act tenancies disappear they can only be replaced with farm business tenancies under the 1995 Act. However, under the Regulatory Reform (Agricultural Tenancies) (England and Wales) Order 2006, the 1995 Act is amended to make it easier to create a new tenancy, from 19 October 2006, which will come within the provisions of the 1986 Act.

Although the definition of agriculture (IHTM24220) used in previous agricultural holdings legislation is retained there is no definition of ‘farm business’. The new tenure therefore is potentially of very wide application.

The Agricultural Tenancies Act 1995 does not apply in Scotland. See IHTM24212 for details of the equivalent legislation.

The business conditions

The business conditions are that all or part of the land comprised in the tenancy is farmed for the purposes of a trade or a business and that all or part must have been so farmed since the commencement of the tenancy, ATA1995/S1 (2).

Top of page

The agriculture condition

The agriculture condition specifies that, having regard to the terms of the tenancy, the use of the land, the nature of any commercial activities carried out on the land, and ‘any other relevant circumstances’ the nature of the tenancy is wholly or primarily agricultural, ATA1995/S1 (3).

Top of page

The notice condition

The notice condition enables the parties, as an alternative to satisfying the agriculture condition, to serve notice on each other at the commencement of the tenancy, specifying that the tenancy shall remain a farm business tenancy even if the user of the let land ceases, at a later date, to be primarily agricultural, ATA1995/S1 (4).

Because of the notice condition a farm business tenancy can remain an agricultural tenancy even if the predominant use of the land and/or buildings becomes non-agricultural. In such circumstances, it is unlikely that the land in question will be occupied (IHTM24070) for the purposes of agriculture (IHTM24060) for the purposes of IHTA84/S117.