Potential impact of Assured Agricultural Occupancy on diversification plans

If a farmer decides that the new income will come from upgrading farm workers cottages for use as B&Bs or holiday cottages, or to demolish them to make way for something new, this can create significant issues unless proper consideration and planning is undertaken beforehand.

Establish whether any existing occupation of property is classed as Assured Agricultural Occupancy 

This is even more relevant where accommodation has previously been used by farm labourers who will either be local, or even members of the farmer’s extended family. If a farm worker lives in a house provided, or arranged, by their employer, and they have worked 91 weeks in agriculture during the previous two years, their occupation is classed as an Assured Agricultural Occupancy (AAO) created by the 1988 Housing Act and so has the benefit of enhanced protection from eviction. Cases before the courts have shown that, for agricultural workers, the protection goes beyond simple bricks-and-mortar flats and houses and also includes chalets, mobile homes and even caravans.

Planning a new venture must include consideration for what the building has at present and what rights may exist in favour of others. In addition, even where development has already taken place, it may still have restrictions on its use for farm workers. There is therefore a great deal for farmers to consider before allowing agricultural tenants to move in to such accommodation, especially where they are contemplating a move to diversify by creating income from accommodation. Landowners and farmers must also be aware that workers’ rights to a property may not end simply because they are dismissed or leave their job. Great care must be taken as to how any such occupation is managed.

Seek professional advice before you finalise your diversification plans and avoid 'knee-jerk' decisions at all costs

It may also seem straightforward that a tenant should have to vacate accommodation where the farm is sold, or changes hands, but again the tenant may have accrued rights allowing them to remain. You cannot simply serve a notice asking them to go. The legislation sets out a series of circumstances where the property may be capable of recovery and, in addition, management of the rent may also become an influencing factor in a former farm worker’s desire to remain. Advice should be sought before any ‘knee-jerk’ decisions are made and where any landowner is thinking of offering accommodation to farm workers, as there are ways to avoid the pitfalls outlined here.

The use of what are called assured shorthold tenancies is, in most instances, the way forward when granting any residential rights to occupy farm accommodation. There are a couple of exceptions to this but the most important point is to take advice before allowing any occupation. The law is complex and not user friendly. As can be seen, farmers have all manner of issues to consider - and this is only one  - when wrestling with ideas as about possible diversification. 

Our agricultural team can help you with different aspects of any farm diversification plans you may have, including those relating to potential rights relating to Assured Agricultural Occupancy.