Tenanted holdings
How the scheme interacts with AHA 1986 and ATA 1995 tenancies. Consent, income split, and what happens at end of tenancy.
The headline
Several Ure Dales holdings include tenanted parcels. The scheme has been designed to work with both legacy Agricultural Holdings Act 1986 () tenancies and modern Farm Business Tenancies (, governed by the Agricultural Tenancies Act 1995). The mechanics differ between the two, and the differences matter on consent, on income, and on what happens if the tenancy ends part-way through the 20-year term.
The single most important point: for any tenanted parcel that the scheme’s touches, the scheme will not proceed without the consent route appropriate to the tenancy. Whether that is landlord consent, tenant consent, or both, the scheme respects what the tenancy law and the specific tenancy agreement require.
Around half of round one projects involve tenant participation, per ’s response to the Rock Review on agricultural tenancies. Tenancy reform is a live policy area; the scheme has been designed against the current statutory framework while leaving room for the framework to evolve.
Consent matrix — who needs to agree
| Situation | AHA 1986 tenancy | (ATA 1995) |
|---|---|---|
| Owner-occupier — no tenant | Landowner alone consents to scheme entry and to the delivery plan. | |
| Landlord enters the holding into the scheme | Landlord consent + tenant consent for any change affecting the tenant’s use. AHA tenants have a statutory route to object to unreasonable landlord refusal of scheme entry under the Agriculture Act 2020 amendments to the AHA. | Landlord consent + tenant consent for changes affecting the tenant’s use. FBT tenants do not have an equivalent statutory route to object; the tenancy contract terms are what govern. |
| Tenant wants to enter tenanted land into the scheme | Possible if there is alignment between scheme length and tenancy length / terms. AHA tenants are considered to have sufficient management control to enter multi-annual schemes per the Government’s response to the Rock Review. | Requires landlord consent in most cases. Possible without consent only where the FBT terms specifically permit it. The Government has flagged this as an area for future reform via the Farm Tenancy Forum. |
| Permanent land-use change (peatland re-wetting, woodland creation) | Both landlord and tenant must agree. The Rock Review response explicitly states landlords can only enter tenanted land into scheme options that require permanent land-use change jointly with the tenant, and only with the tenant’s consent. | |
| Sporting or shooting rights held under separate lease | Sporting tenancy continues unaffected unless scheme delivery materially constrains it. Where it does, sporting tenant consent is required for those parcels. See Sporting rights. | |
Income split conventions
Where a tenanted holding enters the scheme, the question of how scheme income is split between landlord and tenant is settled by the tenancy contract. The scheme does not impose a split. Two common conventions in upland AHA practice are:
- 50/50 split. Where landlord and tenant share land-management decisions roughly equally, a 50/50 split of public-payment income is a typical outcome.
- 70/30 (tenant/landlord) split. Where the tenant carries day-to-day operational responsibility for the scheme actions and the landlord retains only consent rights, a 70/30 weighting toward the tenant reflects who is doing the work.
FBT splits vary widely. The contract usually specifies who receives any agri-environment income; where it is silent, the negotiating point is that scheme payments are tied to actions, and actions are taken by whichever party operates the land.
income, surplus distribution, and shared-services savings are scheme-membership income, not land-management income. They flow to whoever holds the scheme membership for the holding — ordinarily the landowner where the landowner has entered the scheme, the tenant where the tenant has entered. The facilitator can help work through edge cases on which party should hold membership where management responsibilities are distributed.
If the tenancy ends mid-scheme
A 20-year scheme is longer than most FBTs and longer than many AHA tenant lifetimes. The scheme has been designed so that tenancy events do not destabilise scheme membership for the holding.
If a tenant leaves and a new tenant takes the parcel
Scheme commitments on the parcel are registered as land obligations under the Land Registration Act 2002, attached to title rather than to the person. The new tenant takes the parcel subject to those commitments. The Land Management Plan for the holding stays in place; the new tenant participates in any annual review.
If the tenancy ends and the landlord takes the parcel back into hand
Scheme commitments continue. The landlord assumes operational responsibility for the agreed actions. Income flows that previously split between landlord and tenant rationalise to the landlord. Where the landlord then re-lets the parcel, the new tenancy is taken subject to the existing scheme commitments.
If an AHA succession occurs
Succession under the AHA 1986 (where eligible) carries the scheme commitments along with the tenancy. The successor tenant continues on the existing terms and inherits both the obligations and any income share.
If the tenant becomes insolvent or the tenancy is forfeit
Scheme commitments survive. The land obligation is registered against title and is not voided by personal insolvency or forfeiture. The landlord regains operational control and the scheme rebalances at the membership level (see Risk Register R15).
Practical guidance for tenanted holdings considering the scheme
- Identify the tenancy type first. AHA 1986 (granted before 1 September 1995, with successor protections) or FBT under the ATA 1995 (most modern lettings). Hybrid arrangements exist; the tenancy agreement document is the source of truth.
- Read the tenancy agreement’s clauses on environmental schemes. Some agreements explicitly contemplate scheme participation; some are silent; some restrict it. Restrictive clauses are negotiable but not automatic.
- Talk to the other party early. Whether you are landlord or tenant, raising the conversation before the 30 April workshop avoids late-stage surprises. The Consortium facilitator can sit in on those conversations on request.
- Get the income-split clause in writing. A short side-letter or amendment to the tenancy agreement, settling how scheme payments will flow, is worth more than an unrecorded understanding.
- Check the scheme’s six plans. The Land Management Plan, Stakeholder Engagement Plan, and Site Access Plan are where tenancy interactions show up most directly. These are agreed per holding, not imposed.
What this means for your holding
AHA tenancy holders — you have a statutory route to object to unreasonable landlord refusal of scheme entry, and you are considered to have sufficient management control for multi-annual schemes. FBT tenants — your route runs through your tenancy contract; raise the scheme conversation with your landlord early. Landlords— permanent land-use change requires tenant consent, not just consultation. The Consortium facilitator is available for tripartite conversations on any tenancy that needs them.
Where this connects on the site
- Family, succession and tenancy— the longer treatment, including inheritance, sale, and /.
- Sporting rights— sporting-tenancy interaction.
- Public access— tenant access provisions.
- Risk register R15— how the scheme handles individual member insolvency.
- Sample governance document— Articles 6 and 7 on delivery plans agreed per holding.
References
Question about how the scheme interacts with your tenancy? Email the Consortium facilitator directly at contact form or use the contact page. We usually reply within one working day.