County Farms Smallholdings, Case A and Suitable Alternative Accommodation

We regularly advise local authorities on all matters connected with County Farms - see our website:   Estates and Land 

According to the 74th annual report to Parliament on smallholdings in England there were at least 2,132 Smallholdings let by local authorities in England as of March 2024. 

These types of County Farms Smallholdings were intended to be starter farms to help new entrants get a start in the industry before moving on to bigger holdings elsewhere.  In practice, many tenants have remained there for life. 

Under the Agriculture Act 1970, whilst there were no succession rights, County Farms Smallholding tenants benefited from the same security of tenure as their counterparts on privately let agricultural holdings.   As of 2024, 17.6% of County Farms Smallholdings were “lifetime tenancies” under the 1970 Act. 

To help smallholding authorities (the capacity in which local authorities deal with their County Farms Smallholdings estates) move tenants on and free up County Farms Smallholdings for letting to new entrants, the Agricultural Holdings (Notices to Quit) Act 1977 introduced a new termination ground known as Case I, which was later replaced by Case A under the Agricultural Holdings Act 1986. 

Case A

Under Case A, smallholding authorities can serve a notice to quit on a County Farms Smallholding tenant upon the tenant reaching pensionable age (as amended by the Agriculture Act 2020). 

Case A only applies to tenancies granted after the introduction of the 1986 Act where the tenancy agreement expressly acknowledges that Case A (or Case I under the 1977 Act) is to apply.

As of 2024, 9% of County Farms Smallholdings were regarded as one of these “retirement tenancies” granted in the brief window between the 1986 Act and the Agricultural Tenancies Act 1995, which replaced agricultural holdings with Farm Business Tenancies. 

These present a unique challenge to smallholding authorities. 

Suitable Alternative Accommodation

Case A provides a relatively straightforward mechanism for smallholding authorities to recover possession of what is likely to be a valuable asset without the need for Tribunal proceedings (though a tenant can still challenge the validity of the notice through arbitration), if certain conditions are met. 

One condition is that, if the County Farms Smallholding includes the tenant's living accommodation, there must be suitable alternative accommodation available to them at the end of the notice period. 

A certificate from the local housing authority confirming accommodation will be available is sufficient, but unlikely in light of dwindling social housing stocks.  In which case, the 1986 Act lists the type of tenancies that may satisfy the condition. 

The tenant's own property

But what if, despite living at the County Farms Smallholding, the tenant owns their own residential property elsewhere?  Does that count as suitable alternative accommodation even though it is not owned by the local authority?

There is little authority on the interpretation of Case A, but its wording is modelled very closely on the Rent Act 1977, so the cases decided on the similar wording of that statute can be very helpful in identifying the principles to be applied to Case A. 

The Court of Appeal has considered whether, under the Rent Act 1977, the tenant's own property might qualify as “suitable alternative accommodation”: 

• In Amrit Holdings Co Ltd v Shahbakhti [2005], the Court found no objection to the principle that the tenant's own property might qualify.  Instead, the relevant question was whether it would be reasonable for the tenant to take steps to recover possession of the property which might be regarded as suitable alternative accommodation.  

• In Chelmsford Cars v Moseley [2015], the tenants' case was that the 1977 Act required the alternative accommodation to be rented, rather than a long lease or freehold.  Lord Justice Kitchin dismissed this ground:

The wording of section 98 is, in my judgment, plainly wide enough to encompass property which is owned by the tenant and such property can be "available accommodation" in the sense that Act requires.  That was, it seems to me, quite clearly the view of this court in the Amrit case and in the earlier decision of this court in London City and Westcliff Properties v Stuart Bernard Goodman and Penelope Nixon given on 19 May 1978…

As the wording of Case A mirrors section 98 of the Rent Act 1977, it is likely to be subject to the same judicial interpretation. 

On that basis, property owned by the tenant could be suitable alternative accommodation under Case A, but the key question from the cases is whether it would be reasonable to expect the tenant to rearrange their affairs to make the accommodation available (for example, regaining possession from a tenant):

• In Amrit, the Court found that if the tenant was required to use their own property as suitable alternative accommodation, the tenant would lose his investment income, as well as face the expense and trouble of bringing possession proceedings against his own tenants.  The outcome would be a loss to the tenant of £3,000 per year (at 2005 prices), and the Court of Appeal considered that it was not reasonable for him to have to rearrange his affairs to make the accommodation available. 

• In Chelmsford Cars, the judge at first instance found that the tenant should use his own property as suitable alternative accommodation.  The same judge found the tenant “to be a person who had developed obstinacy and awkwardness to a high art and that he was a very difficult man who was capable of getting into disputes with the most mild and amenable persons” and that his present landlord had offered to pay for improvement works to the property.  The Court of Appeal supported the first instance judge's decision.  

County Farms are valuable assets.  When managed effectively, they provide local authorities with a steady income stream and bolster the rural community.  Case A and the requirement for suitable alternative accommodation were intended to provide opportunities for new entrants without leaving retiring tenants homeless after years of hard work.

30 years on from the 1986 Act, an increasing number of smallholding tenants are now reaching retirement age and many of those may now own residential property in their own right.  Based on these Court of Appeal authorities, the tenant's own residential property has at least the potential to fulfill the criteria of being suitable alternative accommodation.   In turn this may lead to an increased reliance on Case A by smallholdings authorities.

Based on these Court of Appeal authorities, the tenant's own residential property has at least the potential to fulfill the criteria of being suitable alternative accommodation. In turn this may lead to an increased reliance on Case A by smallholdings authorities.