Changes to succession rules for AHA tenancies

The rules regarding succession of Agricultural Holdings Act 1986 (AHA) tenancies has recently changed, with the new rules taking effect on 1 September 2024.

To succeed an AHA tenancy, it must first be ascertained that the tenancy benefits from succession rights on the death or retirement of a tenant. If it does, an incoming tenant must show that they are both “eligible” and “suitable”.

Under the old rules, the “eligibility” test required the applicant to:

• be a close relative of the deceased or retiring tenant, such as a spouse, civil partner, sibling, or child;
• demonstrate that their principal source of livelihood has been derived from the holding for at least five of the seven years preceding the tenant’s death or retirement;
• not already be the occupier of another “commercial unit” of agricultural land.

In order to be a “suitable” person, the Tribunal would assess the applicant’s training, experience, age, health, financial standing and also the landlord’s views to determine suitability.

Under the new rules, an applicant will still be required to satisfy the close relative test and the livelihood condition. However, the commercial unit test no longer applies. The reason for this is that it restricted the ability of some applicants, who may be very good farmers, to apply for succession by not allowing them to occupy other agricultural units.

The previous suitability test was also often considered a low bar for candidates to pass and did not necessarily foster conditions for the best applicants to take on holdings. Therefore, a new and more demanding suitability test has been introduced. This includes requiring the successor to show that they have the ability to farm “commercially to high standards of efficient production and care for the environment” and asks whether a landlord would consider the applicant a candidate they would be willing to grant the tenancy to.

In addition, under the old rules, an existing tenant had to be aged 65 or older before a succession application could be made on retirement. This has now been repealed so that an application can be made when the current tenant is any age.

The aim of the new rules is to improve agricultural productivity and ensure that the best applicants are eligible to succeed. However, the question as to whether or not an applicant satisfies the criteria for succession is determined on a case by case basis, by taking all of the requirements into account. It is, therefore, crucial to obtain specialist advice at the earliest opportunity in the event of a death or proposed retirement, especially given the strict statutory timescales involved.

If you would like to discuss whether succession rights affect your tenancy and how the rules might apply to you, please contact Crombie Wilkinson on 01653 600070 to speak to a legal advisor in the Agricultural team.