Q&A: Is a lease of a woodland a farm business tenancy?
Would a lease of a woodland be a farm business tenancy or a Landlord and Tenant Act 1954 lease, where the tenant will undertake works of felling and removing dieback trees to assist the health of the woodland, but will also pay a rent to occupy?
Produced in partnership with Emma Preece of Charles Russell Speechlys LLP.
To assess whether a lease benefits from any security of tenure, it is necessary to consider each type of security in turn and whether the occupier fulfils the relevant criteria.
Farm business tenancies
To be a farm business tenancy under the Agricultural Tenancies Act 1995 (ATA 1995), the lease must satisfy the Business Conditions, and either the Agriculture Conditions or the Notice Conditions.
For the Business Conditions are that:
- all or part of the land comprised in the tenancy must be farmed for the purposes of a trade or business, and
- all or part of the land must have been so farmed since the beginning of the tenancy (ATA 1995, s 1(2)
Therefore, if the use of the woodland is not for trade or business, then it will not meet this criterion. 'Farming' includes 'agricultural activity', and 'agriculture' is defined to includes various farming activities 'and the use for woodlands where that use is ancillary to the farming of land for other agricultural purposes': ATA 1995, s 38(1). It therefore appears that woodland use alone will not be 'agricultural'.
In addition, either the tenancy must be primarily or wholly agricultural in character (the Agricultural Condition) or it was primarily or wholly agricultural at the commencement of the term and the proposed landlord and tenant have exchanged notices before the lease begins to the effect that the lease is to be a farm business tenancy (the Notice Conditions): ATA 1995, s 1.
For more information see Practice Note: Identifying a farm business tenancy.
Landlord and Tenant Act 1954
If the tenancy is a farm business tenancy it cannot be a tenancy which is protected under the Landlord and Tenant Act 1954 (LTA 1954) (see LTA 1954, s 43(1)(aa)).
Protection under LTA 1954 arises where, broadly speaking, the whole or a part of the demised premises is occupied by the tenant for the purposes of its business, or for those and other purposes. Generally, where the land is to be used for non-agricultural activities, but is occupied by a tenant under a tenancy for business purposes, it is likely that the occupancy will fall under LTA 1954.
This will depend on whether the activities being undertaken by the tenant amount to occupation for business purposes. See Practice Note: LTA 1954 business lease renewal—termination (under 'Does LTA 1954 apply?). If the parties have not yet granted the tenancy, they should consider whether they intend for it to be protected under LTA 1954 and, if not, consider using the contracting out procedure. See Practice Note: Contracting out of the Landlord and Tenant Act 1954—procedures, timing and pitfalls.
Common law tenancy
Alternatively, if the lease does not qualify under either regime, the tenant could be occupying the land under a common law tenancy. See Practice Note: Common law tenancies.
This content was first published on the Lexis Nexis Ask Forum.