Potential Successor Denied Tenancy due to Insufficient Income from the Holding.
In a recent law case a tenant’s potential successor was told that 36-39% of her income would not be sufficient to satisfy the Principle Livelihood Test and her application to take over the tenancy would fail.
The right to succession is not permitted for tenancies commencing after September 2005 , however for tenancies prior to this, that come under the Agricultural Holdings Act 1986 the right to succession still exists.
As part of the succession process, the applicant must demonstrate both “Eligibility” and “Suitability”. Particularly under “Eligibility” ensuring that within the 7 years prior to the tenant’s death or retirement, five of the previous seven years of the claimant’s principal livelihood was earned on the farm. If this condition is not fulfilled, Section 41(1)(b) allows the condition to be satisfied to a “material extent”. In such cases, provided the tribunal is satisfied that it would be fair and reasonable for the applicant to apply for a succession tenancy, the tribunal can direct that the applicant be treated as “Eligible”
In the recent case Thompson v Church Commissioners for England 2006, Thompson failed at tribunal, as although the tribunal saw her as a suitable person to succeed, she could not satisfy the Principal Livelihood test to a material extent.
Thompson’s income from the farm over the five years was 36% - 39%. The tribunal concluded that she had missed the “Magical” 50.1% both in time and income on the farm, and that the material extent was unacceptable only however by a slight degree. Cases like this are usually highly complex, points out Giles Drew of Fisher German Priestner Ltd at Knutsford. If you require further information on this case or this sort of tenancy issue please contact Giles at: btgeo@fgplimited.co.uk
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