Marcus Francis comments on the use of grazing licences and agreements and highlights some of the pitfalls to be avoided.
Any property lawyer will tell you that if you own land and allow others to occupy or use it care must be taken to ensure that you don’t inadvertently allow the occupier to acquire rights to remain in occupation which could adversely affect the value or your future enjoyment of the land. There are many cases that have tracked their way through the Courts right up to the House of Lords and beyond all because what began as an informal arrangement has turned into a protected tenancy or worse a claim for squatters’ rights.
If you own land that is surplus to your short term requirements you may decide to allow a local farmer to put some livestock on it to graze or there may be a horse owner who would be willing to pay you a small weekly or monthly sum to keep their horse on the land. Both arrangements are quite common but it is important that they are correctly arranged in order to prevent the “licensee” obtaining any rights under agricultural or business tenancy protection legislation.
In most cases, keeping horses does not amount to an agricultural activity for the purposes of the relevant agricultural legislation and therefore arrangements are unlikely to be classed as “Farm Business Tenancies”. Unless the horses are kept in connection with a business their occupation of land shouldn’t come within the protection afforded to business occupiers under the Landlord and Tenant Act 1954. One does have to be very careful though as there is a fine line between keeping horses for pleasure and keeping them in connection with a business. The obvious example of a business use is when horses are kept on land as part of a livery business.
The grazing of poultry, sheep, pigs and cattle can all be kept outside of the protection of the agricultural legislation provided the arrangements are relatively short term in nature. Grazing licences should be for less than one year in length and the farmer should always be required to remove his stock for at least a few days before any renewal arrangement is entered into.
When entering into any arrangement relating to the use of land it is always prudent to consider the tax implications of doing so. In many cases the “occupation” of land by the owner is vital to maintain certain tax reliefs and therefore grazing arrangements should not give the occupier “exclusive possession” of the land. The subsidy regime must also be considered as a land owner will not want the grazier to be able to claim the Single Farm Payment.
If you would like any more information about grazing licences or other forms of agreement dealing with the use of agricultural land please get in touch with a member of our Farming and Estates Group.