A farm business tenancy (FBT) of agricultural land and buildings let to a single tenant for a fixed term of more than two years.
The repairs clause contains various options enabling the parties to negotiate the extent of the tenant's repairing obligations, and the insurance clause sets out the respective responsibilities of the landlord and tenant in relation to insurance. This FBT will not automatically come to an end on its term date but will continue as an annual periodic tenancy until brought to an end by either party giving notice.
Before signing the tenancy, the landlord and the tenant should exchange written notices stating that the tenancy is to be and is to remain a farm business tenancy. This is less important if the parties intend to rely on the agricultural condition and there is no chance of diversification into non-agricultural activities. See Standard document, Notice under section 1(4) of the Agricultural Tenancies Act 1995.
Note: The Basic Payment Scheme ended in England and is replaced by delinked payments from 1 January 2024, which reduce and are phased out at the end of 2027. Farmers can receive funding via a new system of environmental land management. For more information on delinking, see Practice note, Delinked payments.
The LRAR 2022 amended the required wording for prescribed lease clause "LR3. Parties to this lease", to add a requirement to provide the overseas entity ID for the landlord and the tenant. The amended prescribed clause LR3 wording can be used from 1 August 2022 and applies to all leases with prescribed clauses. For more information, see Legal update, Register of overseas entities: Land Registration (Amendment) Rules 2022 made.