A landlord of an Agricultural Holdings Act tenancy who wishes to develop part of the holding will often need access to carry out surveys in support of a planning application. If planning consent is obtained, the landlord will need vacant possession in order to develop. In either case, difficulties can arise where the tenant opposes the landlord’s plans.
The recent decisions in Rees v Windsor-Clive related to a 240 acre largely arable farm close to Cardiff. The longstanding tenant had farmed the holding under two tenancy agreements (dated 1965 and 1968); both protected by the Agricultural Holdings Act 1986 (AHA).
The landlord obtained outline planning permission for housing on the land. The environmental conditions required the landlord to undertake various landscape, wildlife and habitat surveys, dig trial pits and boreholes, place surveyors’ stakes and leave bat detectors on the land.
Gaining access under landlord’s reservations
It is not unusual for AHA tenancies to reserve minimal rights of entry to the landlord, which are often generally worded and open to interpretation.
In Rees v Windsor-Clive the landlord claimed that it was entitled to enter the farm under a right of entry in each tenancy as a result of the following wording:
- The 1965 tenancy contained a right to “enter on any part of the farm lands and premises at all reasonable times and for all reasonable purposes”, and
- The 1968 tenancy agreement included a right to enter the premises “for the purposes of inspecting the same”.
Asked to consider exactly what those rights would allow a landlord to do, Lord Justice Lewison confirmed the following principles:
- the usual principles of contractual interpretation and meaning of words are to be applied in interpreting any rights excepted or reserved by a landlord in a lease,
- the rights reserved to the landlord should not breach their obligation to provide quiet enjoyment (this would only be likely to arise where substantial or serious interference with the tenant’s use and enjoyment of the land occurred or where the rights reserved to the landlord would frustrate the purpose of the letting),
- where a landlord’s activity will cause ‘material disturbance or damage’ to the tenant we should expect it to be expressly authorised by the tenancy,
- where a right of entry can be exercised for a ‘reasonable purpose’, the landlord is entitled to do what is ‘reasonably necessary’, but not necessarily what is ‘convenient’ or ‘desirable’ in order to achieve that purpose,
- there is no rule preventing those exercising a landlord’s right of entry from leaving things on the land (in this case bat detectors), and
- what is permitted by a right of entry will be a question of fact and degree in each case.
These confirmations are helpful to a landlord wishing to exercise general rights of entry under a tenancy agreement but do not mean landlords will have carte blanche under the guise of a general and non-specific right.
The installation of monitoring devices (remote bat detectors) and the placing of surveyors’ reference stakes under the landlord’s rights of entry in the tenancies were ultimately upheld; they were reasonable purposes. However, the digging of trial pits and boreholes was not permitted at first instance and the landlord never sought to appeal this.
Rees v Windsor-Clive involved protracted, and no doubt expensive, legal arguments. Avoiding this must be preferable: if you end up in court, something has probably gone wrong early on.
- Get people talking early - if a tenant is tricky or a landlord has no rights of entry under a tenancy this will be especially important. Agreeing licences with tenants to allow for extra rights can be ideal.
- Understand what rights developers and/or promoters want, to determine whether your existing rights are sufficient.
- Use opportunities when they arise – a succession or other tenancy event may allow an opportunity to agree extra (and specific) landlord rights of entry. Doing this at a time when development is not the main issue on the agenda can be a helpful way of dealing with a potential future problem.
- Agree express rights where possible – especially where intrusive surveys will be required. Relying on general and non-specific rights always leaves scope for dispute.
Case B - when land is ‘required’
An AHA landlord with planning permission can use a Case B notice to seek possession. This notice to quit can be served where land ‘is required for a use, other than for agriculture… for which planning permission has been granted under the enactments relating to town and country planning’. Ideally, this statutory right can be combined effectively with a tenancy provision allowing the landlord to serve a short (often three month) notice to quit for non-agricultural purposes.
Whether the land was ‘required’ was also the subject of further and separate legal argument in Rees v Windsor-Clive. The parties agreed that for the land to be ‘required’ it had to be so required at the end of the period stated in the notice or within a relatively short time thereafter.
Previous case law suggested that the landlord must have a firm and settled intention to develop the land and a reasonable prospect of carrying out that intention. The land need not be required by the landlord; it can be required for a developer satisfying the above test (albeit legal questions about enforceability may arise where that developer has yet to be identified at the time of service of the notice).
In Rees v Windsor-Clive the development in question covered a large area and the planning consent carried a 20-year time limit. The whole site was clearly not going to be developed immediately, instead over a number of phases. The exact time frames had yet to be finalised.
The arbitrator did not specify when the various parcels of land would be required. When the tenant challenged this, the court upheld the arbitrator’s decision; the arbitrator did not need to state the time frames over which the phases of development might occur, as the arbitrator had made a general finding of a ‘present requirement’ for the land. This present requirement was not directly for building over all the land but included earth moving, storage and other infrastructure works. The decision is encouraging for landowners with large development sites where works will be phased and may be dependent on initial infrastructure works to open up access to later development stages. Yet it remains open to question whether land is ‘required’ if the land for later phases is not needed straight away for infrastructure but could remain undisturbed and in agricultural use for many years.
What does the future hold?
The increased emphasis on biodiversity net gain and environmental matters in planning decisions means developers will need to expand their development plans accordingly to secure greenfield sites. Under Case B, land must also be required for use ‘other than for agriculture’. Lawyers continue to scratch their heads over what this might mean for the provision of green infrastructure (especially if it is to be grazed) in urban extensions, but case law seems to be moving in the direction of allowing for subsidiary and ancillary agricultural uses within the area covered by a Case B notice.
If you require further information about anything covered in this briefing, please contact Tom Kirkman or your usual contact at the firm on +44 (0)20 3375 7000.
This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.
© Farrer & Co LLP, April 2021