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Under the Agricultural Holdings Act 1986 (‘AHA’), regulations prescribe certain terms into AHA tenancies dealing with repair and insurance of fixed equipment on a tenanted agricultural holding governed by the AHA 1986.
The current prescribed terms are contained within the Agriculture (Maintenance, Repair and Insurance of Fixed Equipment) Regulations 1973 (as amended in 1988) and known as “Model Clauses”. The Model Clauses are deemed to be incorporated in every agricultural tenancy agreement made under the AHA except in instances where there is an agreement in writing, which imposes on one of the parties to the agreement a liability which the Model Clauses would otherwise impose on the other.
A link to the current Model Clauses can be found here.
The Model Clauses allocate the responsibility between the landlord and tenant of an AHA tenancy for maintaining, repairing, replacing (as part of the repairing obligation) and for insuring fixed equipment. They are now considered out of date because they do not prescribe terms as to the maintenance, replacement and repair of fixed equipment which are now in common use, and for technologies developed since the regulations were drafted.
As part of the government’s Red Tape Challenge Agriculture, secondary legislation covering agricultural tenancies was reviewed last year (2014) to determine if there were ways of fulfilling existing policy aims in a less burdensome way and to simplify the legislative landscape and update existing legislation.
On 18 August 2014 the Government issued a consultation on modernising the repair and maintenance of fixed equipment and end-of-tenancy compensation in relation to Agricultural Tenancies in England. Their consultation paper is available here. A link to the actual consultation document can be found here.
The consultation sought views on updating the regulation on the repair and maintenance of fixed equipment by including items now in common use and taking the opportunity to consolidate the new legislation with similar legislation where appropriate. The consultation also sought views on being less prescriptive on how end-of-tenancy compensation is calculated, to enable compensation to reflect the value of the improvement or matter being compensated for at the time the tenancy is terminated.
As a result of the review, new Regulations were made on 26th March to update and modernise the Model Clauses. They apply to agricultural tenancy agreements under the AHA 1986 in England and will come into force on 1st October 2015.
As mentioned above, the new Model Clauses will apply to all agricultural tenancy agreements under the AHA6, other than those which contain a written agreement between the parties imposing on one party a liability which the Model Clauses would otherwise impose on the other.
The 2015 Model Clauses add new liabilities for fixed equipment now in common use and provide more detail about existing liabilities; in particular Schedule 1 to the 2015 Model Clauses will divide between the landlord and the tenant the responsibility for maintaining, repairing and insuring fixed equipment.
Clients should in particular note the following changes which will come into force from 1st October 2015: