Shropshire Farming Talk: Implied covenants within an agricultural tenancy agreement
Within an agricultural tenancy agreement that fails to make provision in relation to a particular matter between the landlord and tenant, there are certain circumstances under which terms will be brought into the agreement through implied terms and automatically apply through common law, albeit they are no substitute for a well drafted written tenancy agreement.
Implied provisions are overridden where terms relating to a specific matter are already expressly provided for within the agreement.
Implied covenants by the landlord will include for the tenant to have quiet enjoyment of the holding and also non-derogation from grant whereby the landlord must not do anything to cause the holding to become less fit for purpose that it was at the tenancy commencement.
Implied covenants by the tenant would include to pay the rent and not to commit the tort of waste i.e. not to damage the landlord’s reversion.
Under the Agricultural Tenancies Act 1995 there is no restriction on the inclusion of terms restricting the tenant’s freedom of cropping or the right to dispose of the produce from the holding. There is also no restriction on the inclusion of terms preventing the ploughing of permanent pastures.
Under the Agricultural Holdings Act 1986 the tenant’s freedom of cropping is guaranteed.
Any restriction that is placed in relation to the ploughing of permanent pastures can be modified under the arbitration act under the AHA 1986 so long as it is in the interests of full and efficient farming.
This is not replicated under the ATA 1995 where the parties have total discretion to agree upon the farming system to be implemented on the holding. A tenancy under the ATA 1995 can also place restrictions upon certain areas of the holding, for example sporting rights or where conservations sites should be. There is no route for the tenant to challenge a restriction on his freedom of cropping under the ATA 1995.
Within a tenancy governed by the ATA 1995 there is no implied provision in relation to damage to crops caused by game. It is therefore prudent to ensure that provision is made for this purpose particularly if sporting activities are conducted across or near to the holding.
Implied terms can in some circumstance provide comfort or a means of remedy to a landlord or tenant, however it is always better to ensure that a tenancy agreement is well drafted from the outset.
For further advice on tenancy terms please contact me at kathrynwilliams@dmpcuk.com
Kathryn Williams of Davis Meade Property Consultants Ltd
