A recent legal case in Herefordshire (Herefordshire DC v Bayliss) has clarified the position as regards the serving of a Notice to Quit on a tenant when planning permission has not yet been obtained.
The wording of the Agricultural Holdings Act is such that it can be confusing as to whether a Case B (a notice used when land is needed for a non-agricultural purpose which will require planning permission) or a General Notice to Quit under s27 (3)(f) of the same Act can be used.
The First Tier Tribunal held that for the Case B Notice to take effect, planning permission must have already been gained.
This then has the effect of elongating the process by at least 18 months or so depending on the anniversary date of the tenancy.
So if you are a Landlord with a 1986 Agricultural Holdings Act Tenant in place on land with planning potential, you will need to be mindful of this case and so start your negotiations with the tenant sooner rather than later, as it might be that he will surrender his tenancy earlier for a premium. This additional cost will, of course, affect the bottom line as a developer will ‘charge’ the premium in the final land sale price back to you at the conclusion of an option or promotion agreement.
If you are a tenant, you may be in stronger position to negotiate a higher surrender premium, depending on the timelines of the promoter or housebuilder.
Whichever side of the fence you are on, we are happy to help you with the process and have experience of dealing with all types of planning agreements.
Liza Randall MRICS FAAV