Jeremy's Blog 12th April 2024: Agricultural Landlord and Tenant Code of Practice for England

This article by Jeremy Moody first appeared in the CAAV e-Briefing of 12th April 2024

The Agricultural Landlord and Tenant Code of Practice for England was published on Monday. It is a voluntary Code for all parties to tenancies (that is, landlords and tenants) and their advisers, giving guidance as to approach, conduct and behaviour. It looks to support good relationships and help where difficulties arise. Intended to improve practice, it does not change the law or alter any contract and recognises that professionals work within clients’ instructions.

Setting out the themes of clarity, communication and collaboration for the relationships in a tenancy, it offers more specific guidance as to conduct “unless good reasons suggest otherwise”. Throughout, it looks for clarity as to intentions and expectations, clear, timely, considered and appropriate communications between parties (“as open as is commercially possible”) and achieving more by working together.

As part of its response to the Rock report, the Government looked to the farming, landowning and professional organisations to prepare the Code. It was drafted over the winter under the supervision of the Farm Tenancy Forum (FTF) which put a consultation draft to its members. Reviewed in detail by the CAAV’s February Council, the CAAV and other bodies went back with final changes to settle the text that has then been endorsed by the CLA, TFA, NFU, ALA, ACES, ILG, NFYFC and the RICS as well as the CAAV.

The Code is about the spirit of the relationship between parties to a tenancy and their advisers, a point of reference to counter unreasonable behaviour. It does not look to stop either landlord or tenant from making reasonable commercial proposals but asks for realistic timetables and expectations, mutual respect, positive approaches and recorded answers. Reflecting that spirit, the CAAV has added this wording in updating its model FBTs for England:
“They will have regard to the Agricultural Landlord and Tenant Code of Practice for England (as published in April 2024) in their dealings with each other in relation to this Agreement and the Property.”

More specifically, the Code considers approaches to granting, renewing and terminating a tenancy, rent and rent reviews, repairs and improvements, new opportunities, schemes etc and then disputes. On one particular point, where one tenant is to follow another, it expects that landlord and ingoer should only share a valuer who is appointed by the ingoer and if that valuer thinks this is in the parties’ interests.

The Code says that landlords and tenants “should seek professional advice on matters which are outside their own competence and experience”. Professionals are asked to make clients aware of the Code, work within instructions and professional obligations, work constructively with their clients and other parties and make their complaints procedure available on request to any “party” (landlord or tenant) who could use it.

The Code is part of the Government’s developing position on agricultural tenancies in England, alongside changes to SFI and the rejection of changes to APR on let land. Its May 2023 response had two themes, wanting:

• a flexible let sector with a diversity of lengths of tenancies
• tenancies to be business contracts best operated with good relationships.

The quality of behaviour in those relationships will be a continuing focus of discussion. The Farm Tenancy Forum and others will be watching over the Code and its effects. With that focus on relationships, we wait for the Government’s response to its November Call for Evidence on behaviour in the sector, professional complaints, disciplinary processes, dispute resolution and whether there is a case for a Tenant Farming Commissioner in England.

Whether that title can find a practical role or not – there is a risk that this is just magical thinking that creating a post is an answer – professionals will be expected to behave professionally. The Code itself can be a point of reference for difficult clients, whether landlord or tenant. It expects considered, reasonable and timely dealings – not seeing the first rent review proposal made at the last minute. The Code does not avoid necessarily difficult conversations but looks to see that they are held well. Essentially, it asks tenants, landlords and their advisers to deal with each other with fairness and respect.

There is a larger importance in this. England’s let sector has the potential to grow; it is not in the Scottish sector’s desperate plight. The flexibility of a positive let sector with its opportunities for good farmers to have the use of land they will farm well is key in responding to the challenges of climate change with its extreme weathers, geopolitical uncertainty and supply chain risks. Looking for the future agreements and relationships that can create value and mutual benefit rewarding both tenant and landlord has to be the way forward.