Tenancies and Vacant Possession: Getting Land Back for Development

Housebuilders buy land they can start building on. If someone has a legal right to stay on part of your field, the sale either waits, the price drops, or the deal falls through. That is why every option agreement asks what occupation there is, and why the answer can change the value of your land more than almost anything except planning itself.

Most of the difficulty comes from timing. Planning takes years. Ending a tenancy can take a year or two more. If those two clocks are not lined up at the start, the landowner can end up in breach of a contract to sell with vacant possession on a date they cannot meet.

This guide covers the main types of occupation found on farms and small holdings in England, and how each one can be brought to an end. It is general information, not advice on your tenancy. The wording of the agreement, and the history of the arrangement, decide the answer.

Tenancies of agricultural land granted before 1 September 1995 are normally governed by the Agricultural Holdings Act 1986, and are known as AHA tenancies. They give the tenant a high level of security. The landlord cannot simply decide not to renew.

Succession

AHA tenancies granted before 12 July 1984 can usually pass to a close relative of the tenant, on death or retirement, up to two times. The relative has to meet eligibility tests, including getting their only or principal livelihood from farming the holding in at least five of the last seven years, and be found suitable by the Agricultural Land Tribunal.

Those rules changed in England on 1 September 2024. The old commercial unit test was removed and replaced with an updated suitability test, and the rule that a tenant had to be 65 before a relative could apply to succeed on retirement was abolished. A tenancy with succession rights still in it can mean the same family farming the land for decades.

Notices to Quit

An AHA tenancy is ended by a notice to quit. The standard rule is that it must give at least 12 months' notice and expire at the end of a year of the tenancy, known as the term date. A notice served even a day late in the year may have to run for nearly two years.

Most notices to quit can be met by a counter-notice from the tenant, after which the landlord needs the consent of the Tribunal, which is hard to get. The exceptions are the "Cases" in Schedule 3 to the Act. For development, the one that matters is Case B.

Case B: Planning Permission for Another Use

Case B applies where the land is required for a use other than agriculture and planning permission for that use has been granted (or, in some cases, is not needed). The notice to quit must say it is given under Case B. The tenant cannot use a counter-notice to send it to the Tribunal, but can challenge the stated reasons by demanding arbitration, within a tight deadline of one month.

The order matters. In one reported decision, Herefordshire Council v Bayliss, a landlord that served notice before it had planning permission for housing could not rely on the alternative Tribunal route instead. Permission first, then the Case B notice.

Compensation

A tenant who leaves after a Case B notice is usually entitled to compensation for disturbance: at least one year's rent, and up to two years' rent if they can prove higher losses. In many cases there is also additional compensation of four years' rent to help the tenant reorganise their affairs. Together that can reach six years' rent. On top of that come compensation for the tenant's improvements and "tenant right", such as growing crops and cultivations.

Resumption Clauses and Part of the Holding

Some AHA tenancy agreements contain a resumption clause, letting the landlord take back land for a non-agricultural purpose on shorter notice. These are valuable and worth finding in the file. Without one, notices to quit only part of a holding are possible in limited situations, and the tenant may be able to treat a notice for part as a notice for the whole farm. Take advice before serving anything.

Most agricultural lettings since 1 September 1995 are farm business tenancies, or FBTs, under the Agricultural Tenancies Act 1995. They are much easier to end, but the notice rules are strict.

• Fixed term of more than two years. It does not end automatically. Either side must give written notice at least 12 months but less than 24 months before the term date. If nobody does, it carries on from year to year.
• Year to year tenancy. Ended by at least 12 months' written notice expiring at the end of a year of the tenancy.
• Fixed term of two years or less. It ends at the end of the term without notice, as long as the tenant does not stay on with your agreement.
• Break clauses. In an FBT of more than two years, a break notice must be in writing and give at least 12 months' notice. A clause that allows less is not effective for that purpose.

There is no compensation for disturbance under an FBT. The tenant can claim for improvements made with the landlord's consent, and the 1995 Act treats a planning permission obtained by the tenant as a possible improvement. That is one reason landlords should keep control of planning applications on let land.

If you know land has development potential, the simplest approach is to let it on FBTs of two years or less, or on a longer FBT with a clear break clause for development on 12 months' notice, covering the whole or part of the land. The Farm Tenancy Forum published guidance on longer FBTs in March 2026, which is a useful reference for both sides.

Plenty of paddocks and fields are used by a neighbour on a handshake, or on a grazing licence renewed each spring. A genuine grazing or mowing licence for part of a year, without exclusive possession, gives the grazier no security at all.

The risk comes when an arrangement drifts. A "licence" that gives the occupier exclusive possession for a rent may in law be a tenancy, whatever it is called. After 1995 that usually means an FBT, and an FBT that has run year to year needs 12 months' notice. Arrangements that started before September 1995 and were never tidied up can occasionally turn out to be AHA tenancies.

• Put every grazing arrangement in writing, for a stated period of less than a year.
• Keep control of the land: do not give the grazier the only key or the right to exclude you.
• Leave a gap between seasons rather than letting one licence roll into the next.
• Keep copies of every agreement and record of payment, because a buyer's solicitor will ask for them.

Diversified farms often let old buildings or yards for storage, workshops or offices. Those lettings are usually business tenancies. Unless the lease was properly contracted out of the Landlord and Tenant Act 1954 before it was granted, the tenant has a right to renew when it ends.

To get possession of a protected business tenancy, the landlord serves a notice under section 25 of the Act, giving between 6 and 12 months' notice, and must prove one of the statutory grounds. The redevelopment ground, known as ground (f), requires the landlord to show a firm and settled intention, and a reasonable prospect, of demolishing or reconstructing the premises. The tenant is then usually entitled to compensation of one times the rateable value, or twice that if the business has been there for 14 years or more.

The Law Commission has been reviewing this part of the 1954 Act and published its second consultation in June 2026. At the time of writing nothing has changed in law. A lease that has been contracted out ends when its term ends, or at a break date, with no right to renew.

Houses on or next to development land need particular care, because residential occupiers have strong protection and the rules changed recently.

• Private lettings from 1 May 2026. Under the Renters' Rights Act 2025, section 21 "no fault" notices have been abolished and assured shorthold tenancies have become periodic assured tenancies. A landlord who wants possession must rely on a ground. The ground for selling (Ground 1A) and the ground for demolition or substantial redevelopment (Ground 6) each need four months' notice, and Ground 1A cannot be used in the first 12 months of a tenancy.
• Farm workers. Older farm worker lettings under the Rent (Agriculture) Act 1976, and assured agricultural occupancies, give the occupier strong rights to stay. Possession is usually only practical by agreement or by offering suitable alternative accommodation.
• Family and informal occupiers. Even someone living rent free normally needs proper written notice, and in many cases a court order, before they have to leave.

Many options leave the farmhouse and cottages out of the sale altogether. If a house is needed for access or the layout, raise it at the very start.

An option agreement will usually say that you must give vacant possession on completion, sometimes phase by phase. It will also restrict what you can do in the meantime, so that the position does not get worse while planning is pursued. Our guide to option agreements explains the wider terms.

The common provisions are:

• A list of existing occupiers, with copies of their agreements, attached to the option.
• A ban on new tenancies without consent, with an exception for grazing licences and short FBTs on agreed terms.
• An obligation on you to serve notices when the buyer asks, usually once planning is granted, in a form the buyer's solicitor has approved.
• A completion date set far enough after exercise for notices to run, or an obligation to complete once possession is obtained.
• A clear statement of who pays compensation or surrender payments to tenants, and whether that cost comes off the price.

The last point is where landowners lose money without noticing. Under a percentage of value deal, tenant costs are often deducted before your share is calculated. Under a fixed price deal, the question is whether the price assumed vacant possession you now have to pay for. Our guide to promotion agreement fees and deductions covers deductions in more detail.

A planning application also involves your tenant directly. Agricultural tenants have to be given notice of the application, so it is usually better that they hear about it from you first.

Here is how the dates can fall for land let on an AHA tenancy with a term date of 29 September, once outline planning permission for housing is granted.

The example shows the gap between planning and possession: 18 months here, which a buyer will have to wait through or plan around. Setting that out in the option at the start avoids a dispute later. Our guide on how long planning takes covers the planning side of the timetable.

Agricultural tenancy law has been under review for some years, following the Rock Review of the tenanted farming sector. The main developments are:

• April 2024. A non-statutory code of practice for agricultural landlords and tenants was published.
• 1 September 2024. The succession changes described above came into force in England.
• September 2025. Alan Laidlaw was appointed as the first Commissioner for the Tenant Farming Sector in England.
• 2025 onwards. The Law Commission began reviewing both the 1986 and 1995 Acts. At the time of writing (September 2026), notice periods, Case B and the compensation rules are unchanged.
• 1 May 2026. The Renters' Rights Act 2025 changes for residential lettings took effect.

Because reform is being discussed, check the position again with your solicitor before serving any notice.

Before we agree terms, we ask for a list of everyone who uses or lives on the land and copies of whatever paperwork exists. We then build the time needed to recover possession into the programme, so the completion date is realistic. Where there is an AHA tenant, we would rather talk openly with them early than leave it to a notice after planning.

Where a tenancy makes the land impractical for us in the near term, we say so. Sometimes the honest answer is to wait until a tenancy ends or to agree a surrender first. You can read more about our process on how it works.

If your land is let or grazed and you want to know whether it could still work for development, ask for a free review. Tell us who is on the land and on what terms, and we will give you a straight answer.