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propertylawyer
propertylawyer, Solicitor
Category: Law
Satisfied Customers: 288
Experience:  Property Solicitor with expertise in commercial and residential property transactions.
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Im the landlord of this17 acre land and a developer is

Customer Question

Hi
im the landlord of this17 acre land and a developer is interested i have a tenant that has this old agriculture holding act 1986.
i would like to know is there a set rate that i can give him to give up the tenancie.
Submitted: 1 year ago.
Category: Law
Expert:  propertylawyer replied 1 year ago.

Hi David

Thanks for your question.

It is potentially complex and will largely depend upon the type of holding nd how you terminate it.

Compensation for disturbance: basic compensation and additional compensation

There are two parts to compensation for disturbance:

  • Basic compensation, being either of the following:

    • an amount equal to one year's rent; or

    • a greater amount equal to the smaller of either two year's rent or the tenant's actual loss unavoidably incurred, but only if the tenant has given the landlord notice (at least one month before termination) of their intention to make such a claim and a reasonable opportunity of valuing the goods, implements, fixtures and other relevant items.

  • Additional compensation of an amount equal to four years' rent.

The tenant's entitlement to compensation for disturbance is set out below, it depends on which case you rely to terminate the holding. I have shown if basic and additional compensation is payable to the tenant.

Basic compensation Additional compensation

Case A (smallholdings)

Yes. No

Case B (non-agricultural use)

Yes Yes

Case C (certificate of bad husbandry)

No. No

Case D (rent or remediable breach)

No. No

Case E (irremediable breach)

No. No

Case F (insolvency)

No no

Case G (death)

No. No

Case H (Ministry certificate)

Yes. No

Unqualified notice

Yes

No additional compensation is payable if the landlord serves an unqualified notice in certain circumstances and if it is contested and the Tribunal agrees.

Compensation on termination under early resumption clause

The tenant is entitled to compensation under section 62 of the AHA 1986 (in addition to any other compensation payable) where both the following apply:

  • The landlord gives a Case notice or unqualified notice under a clause in the tenancy authorising the resumption of possession of the holding for some specified purpose other than the use of the land for agriculture.

  • The tenant quits the holding in consequence of that notice.

The compensation payable is an amount equal to the value of any additional benefit which would have accrued to the tenant if the tenancy had been terminated "on the expiration of twelve months from the end of the year of tenancy current when the notice was given", I.e a tenant should be given 12 months notice and you have given a shorter notice period to the tenant.

In summary, it is potentially complicated as it will depend on the type of holding and the method you choose to terminate the holding.

Do you have any queries? I hope this helps.

Please can I ask you to accept / positive rate my response. Happy to assist further thereafter.

Kind regards

propertylawyer and other Law Specialists are ready to help you
Customer: replied 1 year ago.
I understand it is very complex but just to clarify if i m succesfull in gaining planning permission. can i get the tenant of the land by giving them notice ( 12months ) and paying them at most 4 times the rent as it is only some fields no house or buildings.
Expert:  propertylawyer replied 1 year ago.

Notice is 12 months but it depends on the holding and which case is stated in the notice as to whether no, basic and additional compensation is payable. If you look at the list of cases above, you will state one of these in the notice you will see what is to be paid.