The Tenant Farming Commissioner (TFC) has published updated guidance in relation to Relinquishment and Assignation ("R&A") of 1991 Act tenancies.
The R&A measure allows secure agricultural tenants the opportunity to offer to relinquish their tenancy to the landlord in exchange for statutory compensation. If the landlord does not accept the tenant's offer, the tenant can seek to assign the tenancy. The guidance produced by the TFC has been further updated following his experience of the measures in practice.
Use of the measures to date
The R&A measures allow a 1991 Act tenant the opportunity to offer to relinquish their tenancy to their landlord in exchange for statutory compensation. If the landlord does not accept the tenant's offer then the tenant can seek to assign the tenancy to a new entrant or an individual progressing in farming. The aim of the measure is to assist existing tenants to retire or quit the tenancy should they wish to do so, and to provide new opportunities for young people to enter into the agricultural profession.
The TFC reports that there has been steady interest in the relinquishment and assignation measures with most parties concluding a deal directly between them with the legislative provisions remaining in the background.
Our experience has been similar. Most parties are keen to work in a pragmatic manner to achieve a desired settlement, knowing that should it be required, there is a statutory framework in place to assist.
Changes to the guidance
The guidance has been updated to:-
- Make clear what information is required to accompany the notice of intention to relinquish;
- Clarify that the TFC is required to appoint a valuer within 28 days of the notice of intention to relinquish being served;
- Clarify that where the landlord and tenant cannot agree, within the valuation period, on items such as tenant's improvements that are eligible for compensation, the valuer will have to take a view and apportion a value accordingly.
Why are the updates required?
The updated guidance follows from the experience of the TFC and points to areas where there has been a requirement for further clarity to assist with the measures.
The TFC in his blog confirms his role in the R&A process. His guidance seeks to further clarify the information required in the R&A notice which is passed to the valuer by the TFC in a short statutory timeframe.
In a previous update to the guidance the TFC highlighted that the valuer's sole task is to put a value on the components which make up the valuation of the compensation payable to the tenant. The valuer's role is not to make determinations of fact, such as the extent of the holding or whether an item is eligible for compensation.
1991 Act tenancies remain a complex area of law and the continued updates to the guidance support the need for clarity.
If you have any queries in relation to R&A, please get in touch with your contact in the Rural Business team.
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