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Baroness Trumpington: My Lords, I beg to move that the House do adjourn during pleasure until eight o'clock.

Moved accordingly, and, on Question, Motion agreed to.

[The Sitting was suspended from 7.41 to 8 p.m.]

Agricultural Tenancies Bill [H.L.]

House again in Committee.

The Earl of Kinnoull moved Amendment No. 30:

After Clause 5, insert the following new clause:

("Tenancies for less than two years: termination

A written agreement for a farm business tenancy for less than two years shall terminate by the effluxion of time alone.").

The noble Earl said: I suggest that this is a cheerful amendment to which to return after the dinner break, following the technical morass in which we have been struggling.

This proposal was made to me last week by an experienced practitioner and I then tabled the amendment. Under Clause 5 the Bill proposes that notices of termination of leases for periods longer than two years should be at least 12 months. It is silent on leases of two years and under. The amendment seeks to spell out what I think is intended because, having looked at the helpful Notes on Clauses which my noble friend has given to me, they reaffirm the proposal by using almost the very words of the amendment. Therefore, the issue is whether the termination of short leases should be spelt out or whether it should be left for lawyers to tell us later that silence is golden. I beg to move.

Lord Carter: One is inclined to support an amendment on the grounds that it would be nice to have an Act of Parliament which refers to the "effluxion of time". I wonder whether it is the intention of the Conservative Party that this Parliament should terminate by the effluxion of time. That seems to be what it has in mind.

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The noble Earl has made an interesting point. I rather wondered about the amendment when I saw it on the Marshalled List, but I see the point which is being made. It will be interesting to hear the Minister's reply.

Earl Howe: I believe that I can help my noble friend and the Committee. It is already the case that farm business tenancy agreements for fixed terms of less than two years will indeed end by effluxion of time. Tenancies from year to year will be subject to a minimum of a year's notice, as is the case under the Agricultural Holdings Act 1986. Shorter periodic tenancies, however, such as quarterly or monthly tenancies, will be subject to common law and will require the appropriate period of notice to end them; for example, a month's notice to end a monthly tenancy. I hope that my noble friend will be sufficiently reassured to withdraw his amendment.

The Earl of Kinnoull: I am grateful to my noble friend. I merely wonder whether something should be put into the Bill for those who perhaps do not understand what is either common law or previous law. However, I am happy to accept my noble friend's assurances. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 6 agreed to.

Clause 7 [Notice required for exercise of option to terminate tenancy or resume possession of part]:

Lord Gallacher moved Amendment No. 31:

Page 4, line 21, leave out subsection (3).

The noble Lord said: The effect of Amendment No. 31 would be to deal with Clauses 5, 6 and 7, which are concerned with ensuring that tenants will have at least 12 months' notice before a tenancy ends. Given the nature of farming, that period is clearly very important in allowing a satisfactory arrangement of affairs.

However, Clause 7(3) disapplies that policy in relation to leases attached to a person's life, whether landlord or tenant. Under the subsection, the Law of Property Act 1925 would operate in relation to that type of lease by converting it into a lease for 90 years on the death of the person in question, but subject to a notice period of just one month.

It is contended that it is not desirable to permit a situation to arise where a tenant could be obliged to quit a holding with only one-twelth of the minimum period applying to other agricultural tenants and dependent on what may be a sudden and unforeseeable death. While in practice it does not seem likely that there will be many leases tied to the lifetime of a person in that way, the Bill should provide protection against that unfortunate set of circumstances occurring. I beg to move.

Lord Middleton: I suppose that there may be farm tenancies which take the form of leases for a person's life. If that person dies, the lease would convert to a 90-year lease under the Law of Property Act 1925 unless one month's notice is given. That is far too short

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a period and quite out of line, as the noble Lord, Lord Gallacher, said, with the provision for 12 months' notice contained in the Bill. I support the amendment.

The Earl of Kinnoull: Before my noble friend replies, perhaps I may ask him what happens if the tenancy is not tied to the life but the tenant dies.

Earl Howe: This is a very technical amendment and, I have to say, relates to a hypothetical situation which may not in practice be encountered. Nevertheless, I thank the noble Lord, Lord Gallacher, for explaining the issues so clearly. The aim of the amendment is to ensure that in cases where a tenancy is subject to Section 149(6) of the Law of Property Act 1925, and the tenancy is terminated by either party following the death or marriage of the tenant, at least 12 months' notice must be given.

I am advised that at present it is very rare for agricultural tenancies to be granted under the provisions of Section 149(6) of the 1925 Act, but it is, I suppose, possible that it may be used in the future. In those circumstances, where the parties were entering into a tenancy which one at least would hope to be of fairly long duration, it must be assumed that they would take proper legal advice. A lawyer would be able to advise them that if they opt for a tenancy for life, it would be converted by Section 149(6) of the Act to a fixed term tenancy of 90 years, as my noble friend pointed out, determinable on death by a very short notice period, whereas if the landowner granted a long tenancy with a break clause which could be triggered by the tenant's death, the normal period of at least 12 months would have to be given. The parties would then be able to make an informed choice.

There seem to me to be two reasons for allowing those arrangements to apply, without overriding them. First, it may suit the parties to arrange for a tenancy to terminate as rapidly as possible following the death of the lessee, rather than requiring a further 12 months to elapse. Secondly, that section of the Law of Property Act 1925 applies to all types of tenancies when they are drafted in those terms, not just to agricultural ones, and there seems no particularly compelling reason to make an exception, given that such agreements are apparently very rare.

I thank the noble Lord, Lord Gallacher, for raising this issue. In the light of my explanation perhaps he will reflect on the matter and withdraw his amendment.

Lord Gallacher: I am grateful to the Minister for his response. I am equally grateful for the support expressed by the noble Lord, Lord Middleton, and for the query raised by the noble Earl, Lord Kinnoull. As has been suggested, I shall reflect on the matter. Proper legal advice from the country lawyer is, I suppose, obtainable at a price. Nevertheless, I believe that we have at least aired the question. I shall read carefully what the Minister said and also ask those who advise me whether, in the light of that advice, they wish to pursue the matter either in its present form or in another form at the Report stage. In the meantime, I beg leave to withdraw the amendment.

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Amendment, by leave, withdrawn.

Clause 7 agreed to.

Clause 8 [Tenant's right to remove fixtures and buildings]:

The Deputy Chairman of Committees (Viscount Allenby of Megiddo): It may be for the convenience of the Committee if I inform those present that, if Amendment No. 32 be called and agreed, I cannot call Amendment No. 33.

Lord Gallacher moved Amendment No. 32:

Page 4, line 33, leave out from ("time") to ("and") in line 34 and insert ("before the expiry of two months from its termination").

The noble Lord said: The amendment seeks to have the right to remove exercisable only while the tenant is in possession and to have an exception relating to fixtures in respect of which he has, according to Clause 8(2)(c), "obtained compensation". The date of termination and his departure from the holding may predate the agreement with the landlord on the level of compensation or its payment. The situation would be made more critical if the matter had to be referred to arbitration.

Further, the building or fixture may be in use right up to the last day of his occupation of the farm, possibly in connection with the care of livestock. The tenant should be given a reasonable period after the date of his departure to another farm, to which he is able to transfer the building or fixture in one operation. That is the substance of what I wish to say in support of the amendment. I beg to move.

The Earl of Kinnoull: I should like to express my support for the amendment. I believe that a two-month period is perfectly reasonable. It follows on from the 1986 Act. Therefore, it would be most reasonable. I hope that my noble friend will feel able to give the amendment a warm response.

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