In 2022 Baroness Rock chaired a Tenancy Working Group which tasked with reviewing practices to ensure tenant farmers could access government finance and with considering practices in the agricultural tenanted sector more generally.
Significance of the Tenanted Farm Sector
Highlighting the importance of the tenanted farm sector, which accounts for approximately one-third of farms in England, a key theme of the Rock Review, published in October 2022, was the importance of improving the relationship between landlords and their tenant farmers.
Recommendations from the Rock Review
One of the recommendations of the Review was that Defra should ask industry bodies to produce a Code of Practice, which it is hoped will “form the basis of how parties to a tenancy agreement are expected to behave.”
Publication of the Code of Practice
Following a short period of consultation, that Code of Practice has now been published. Founded on the three principles of clarity, communication, and collaboration, the key themes of openness, the need for grown-up conversation, and ensuring discussions and agreements are documented run through the Code.
Commencement of the Landlord-Tenant Relationship
At the commencement of the relationship, the Code encourages full disclosure by the landlord - ensuring a fair representation of the land and its limitations is given when marketing, that any unusual tenancy terms are flagged, third party rights over land made clear, etc.
Understanding the Tenancy Agreement
There is an acknowledgement that all parties need to understand the tenancy agreement and their respective liabilities and obligations, and take advice as needed.
Key Touchstones During the Tenancy
With regard to the key touchstones during the tenancy (paying the rent, rent reviews, and repairs and improvements), the similar themes of openness and understanding can be seen.
Termination of Tenancy
In relation to termination, the Code encourages early discussion, the importance of establishing clear timetables, and avoiding the problems caused by last-minute decisions on termination and renewal.
The Need for a Code of Practice
Many existing agricultural landlords and tenants may well question the need to set down in a Code what should be good, common-sense practice. However, the findings of the Rock Review suggest that there can be difficulties in this relationship which can have significant consequences on tenant farmers.
Legal Force and Voluntary Adoption
The Code is not intended to have any legal force – whilst the hope is that those in the industry will adopt the practices set out, it will be voluntary. The law and the tenancy agreement will remain as the key determiners of the relationship.
