Agricultural Holdings Act 1986 – Changes to Succession Rules

The eligibility and suitability tests associated with ‘succession’ for tenancies under the Agricultural Holdings Act 1986 (AHA 1986) have changed in accordance with the Agriculture Act 2020. These changes took effect from 1st September 2024.

Before assessing the succession rules, it must first be confirmed that the specific tenancy in question benefits from rights to succeed. Such rights generally exist where the tenancy was granted on or before 12th July 1984 (there are certain circumstances where tenancies granted after this date will still benefit from successions rights, but these are generally few and far between).

To succeed to an AHA tenancy, the proposed successor must satisfy that they are both ‘suitable’ and ‘eligible’ to take on the tenancy. An intricate set of tests and rules are utilised to assess these aspects. Following the 2020 Act, these rules have been simplified, with the main changes comprising:

1. Commercial Unit Test – previously this test required that a succession applicant must not be an occupant of another commercial unit of agricultural land, and there were tests to quantify what classified as another ‘commercial unit’. This test has now been abolished and will no longer prevent successors from having an interest in other holdings (whether tenanted or owned).

2. Retirement Age – previously a retiring tenant had to be aged 65 or older before an application could be made for succession on retirement. This test has now been abolished and a succession applicant on retirement can now be made when the tenant is any age.

3. Suitability Test – following the Agriculture Act 2020, the Agricultural Holdings (Requests for Landlord’s Consent or Variant of Terms and the Suitability Test) Regulations 2021 clarified what will be assessed as part of the suitability test for potential successors. A successor will need to show that they have the likely capacity to farm ‘commercially to high standards of efficient production and care for the environment’. This assessment may also include:

• Assessment of an applicant’s experience, training or skills in agriculture or business management;

• health, financial standing or character of the successor;

• The character and condition of the holding and

• That ‘a prudent and willing landlord could reasonably be expected to regard the applicant as among the candidates to whom they would be willing to grant the tenancy’ if the tenancy was on the open market.

The theory behind the changes is to make the criteria and tests more aligned with modern agriculture and reflect the changing agricultural policies within government towards the environment. The changes will need to be viewed as a whole and alongside the existing requirements for succession, including the ‘Close Relationship’ test and Principle Source of Livelihood’ test, which are very much still in existence. 

For advice on tenancy matters, please contact our team.