The Real Estate Dictionary

Archive for the ‘Agricultural Tenancies’ Category

Agricultural tenancies as they exist today were defined by legislation known as the Agricultural Tenancies Act of 1995. Going into effect on September 1, 1995, this legislation differed from previous laws. The need for changes to the law were called for based upon the decline of the agricultural sector.

Since more farmland was rented, long term arrangements were sketchy which led farmers to reluctant to plan far ahead into the future. Additionally, it made it difficult for new farmers to enter into the industry with the current state of agricultural tenancies. The new law did not affect any agreements entered into prior to enactment. These agreements are still governed by the Agricultural Holdings Act of 1986.
In order for a tenancy to fall under the new act, certain conditions must be met. A portion of the land that comprises the tenancy must be farmed for business for the duration of the tenancy. Additionally, one of two other conditions must be satisfied. The involved parties can agree that the tenancy will remain a farm tenancy throughout the agreement. Secondly, if notices are not exchanged prior, the determination of the tenancy as an agricultural one will be based upon the characteristics of the tenancy at that time.
If one of the involved parties decides they want to terminate the tenancy more than two years before the termination date, a written notice must be supplied. The rule of thumb is that at least one year’s notice must be given but no more than two years’ notice. If a written notice is not provided, then the tenancy will resume as agreed upon by both parties.

When entering into an agricultural tenancy, the parties determine the rent. Additionally, they decide if rent reviews will need to occur. In some situations, rent reviews are not required due to the manner in which the land is being used. Upon the termination or cessation of an agricultural tenancy, the tenant is entitled to compensation for any physical improvements that they have made to the holding. These might also include intangible advantages which result in the holding’s value to increase provided that these are left behind when the tenant departs. Swift capital have further infomation on this should you need.