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Lord Gallacher moved Amendment No. 16:


After Clause 2, insert the following new clause:

Agreement in writing

(".—(1) Where in respect of a farm business tenancy—
(a) there is not in existence an agreement in writing embodying all the terms of the tenancy, or
(b) such an agreement in writing is in existence but the terms of the tenancy do not make provision for one or more of the matters specified in Schedule (Matters for which provision is to be made in written farm business tenancy agreements) to this Act—
the landlord or tenant of the holding may, if he has requested the other to enter into an agreement in writing embodying all the terms of the tenancy and containing provisions for all of the specified matters but no agreement has been reached, refer the terms of the tenancy to arbitration under this Act.
(2) On any such reference the arbitrator in his decision—
(a) shall specify the existing terms of the tenancy, subject to variations agreed between the landlord and the tenant;
(b) in so far as those terms as so varied neither make provision for nor make provision inconsistent with the matters specified in Schedule (Matters for which provision is to be made in written farm business tenancy agreements) to this Act, shall make provision for all of those matters in terms agreed between the landlord and the tenant or in default of such agreement as appears to the arbitrator to be just and reasonable between them; and
(c) may include any further provisions relating to the tenancy which may be agreed between the landlord and the tenant.
(3) The decision of an arbitrator under this section shall have effect as if the terms and provisions specified and made in the award were contained in an agreement in writing between the landlord and the tenant and having effect (by way of variation of the agreement previously in force in respect of the tenancy) as from the making of the award or, if the award so provides, from such later date as may be specified in it.").

The noble Lord said: Amendment No. 16 is concerned—the Committee will be surprised to learn—with agreement in writing. With this amendment I shall also speak to Amendment No. 90, with which Amendment No. 16 is grouped. Amendment No. 90, for the information of the Committee, contains the schedule to which Amendment No. 16 refers. That schedule is printed on page 14 of the Marshalled List.

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Amendment No. 16 provides that:


"(".—(1) Where in respect of a farm business tenancy—
(a) there is not in existence an agreement in writing embodying all the terms of the tenancy, or
(b) such an agreement in writing is in existence but the terms of the tenancy do not make provision for one or more of the matters specified in Schedule ...
the landlord or tenant of the holding may, if he has requested the other to enter into an agreement in writing embodying all the terms of the tenancy and containing provisions for all of the specified matters but no agreement has been reached, refer the terms of the tenancy to arbitration under this Act.
(2) On any such reference the arbitrator in his decision—
(a) shall specify the existing terms of the tenancy, subject to variations agreed between the landlord and the tenant;
(b) in so far as those terms as so varied neither make provision for nor make provision inconsistent with the matters specified in Schedule ... to this Act, shall make provision for all of those matters in terms agreed between the landlord and the tenant or in default of such agreement as appears to the arbitrator to be just and reasonable between them; and
(c) may include any further provisions relating to the tenancy which may be agreed between the landlord and the tenant.
(3) The decision of an arbitrator under this section shall have effect as if the terms and provisions specified and made in the award were contained in an agreement in writing between the landlord and the tenant and having effect (by way of variation of the agreement previously in force in respect of the tenancy) as from the making of the award or, if the award so provides, from such later date as may be specified in it.")".

We believe that the combination of this new clause, plus the detail set out in the schedule—which is Amendment No. 90 —will rectify what we regard as a deficiency and indeed an omission in the Bill, and we recommend that it be given the serious consideration of the Committee and if possible the approval of the Minister. I beg to move.

Earl Howe: The advantages of a prescribed list of criteria to be included in farm business tenancies have been described most eloquently by the noble Lord. However, I am afraid that, despite his eloquence, he has not convinced me that the disadvantages of the proposed amendment are outweighed by the alleged benefits that he adduces. The 1986 Act attempted something similar.

Schedule 1 to the 1986 Act contains a relatively short and simple list of matters which are relevant to most agricultural tenancies. As noble Lords may know, Section 6 of that Act gives either party the right to demand arbitration in the case of an oral tenancy or a written tenancy which does not embody all the terms of the tenancy or does not provide for all the matters listed in the schedule. Clearly, the 1986 Act was drafted in anticipation that some tenancy agreements would not be entered into with professional assistance and that some matters might be overlooked. That might on the face of it seem to be a reasonable idea, but the trouble is that some matters listed are now out of date. For example, the liability to rates has been replaced by a liability for council tax and business rates.

Even a simple list like that has given rise to problems. The amendment proposed by the noble Lord has not even the virtue of being a simple list, and yet it fails completely to address the needs of a diversified farm

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business tenancy. Goodness knows how quickly it would date if one attempted to make the list comprehensive.

There is, however, an alternative and much more attractive approach. The RICS is preparing guidance for the industry for matters to be included in a tenancy agreement. That guidance will be available for everyone to see. It can be updated as necessary and will provide much needed flexibility. I also suggest that that guidance will have more likelihood of reaching the intended beneficiaries than a schedule to an Act of Parliament. In the light of that explanation I hope that the noble Lord will not wish to pursue the amendment.

With the leave of the Committee, perhaps I may return to an issue relating to oral tenancies which the noble Lord, Lord Northbourne, raised a moment ago when he asked me what would be the standing in law of an oral agreement which purported to be for more than three years. I am advised that that lease would be of no effect, so that the courts—as I correctly surmised—would have to resolve the precise legal position. But if the tenant were in occupation, the likely position is that he would be found to have a periodic tenancy, namely an annual or quarterly tenancy, or a tenancy covering some other period, depending on the rent being paid. The important point is that the fixed term would be ineffective. I hope that that information is of some assistance.

Lord Gallacher: I thank the noble Earl for his reply. It consoles me a little. To that extent, although I do not intend to press the amendment, that information may be of use to us in considering whether to take further action on the thrust of the amendment at a later stage of the Bill.

The noble Earl said that the amendment fails to face the needs of a farm business tenancy. He then went on to say that the RICS guidance for tenants would be preferable to a schedule to the Bill. Defective as the schedule may be—and that depends on the eyes of the beholder—if it were in the Bill, at least the information would be available.

We have yet to see the important guidance for tenants to be produced by the RICS. We have been told that the Bill has had a gestation period, to include industry representations, of some four years. It would help this side—call us the wreckers if you like—to give up our erring ways at some stage in the passage of the Bill if before Report stage we could see the guidance for tenants which the RICS is preparing. On the assumption that that is possible, we shall consider it sympathetically. It may deter us from hurling ourselves yet again at the barricades when we come to the Report stage of the Bill. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

6.15 p.m.

Clause 3 [Compliance with notice conditions in cases of surrender and regrant]:

Lord Carter moved Amendment No. 17:


Page 2, line 36, leave out ("or") and insert ("and").

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The noble Lord said: We are not clear why the Government have provided in Clause 3(1) (b) that either the condition in subsection (2) or that in subsection (3) will apply. We do not understand why the party should not be required to satisfy both conditions rather than either one or the other. The purpose of the amendment is to ask the Government the reason for that provision. I beg to move.

Earl Howe: I believe that I can assist the noble Lord. Under Clause 3(1) (b) it is provided that either the condition in subsection (2) or the condition in subsection (3) must be met. Subsection (2) covers the case in which some minor variation is made to the area of land comprised in a new tenancy but no change is made to the term date. Subsection (3) covers the case where the term date is earlier for the new tenancy than it was for the old one. To replace "or" with "and" as is proposed in the amendment would require both conditions to be met. I suggest that that is unnecessary. It would deprive the parties of the ability to agree on minor changes to the boundary of the holding, for example, unless they also agreed an earlier termination date for the tenancy. I am sure that that is not what is intended, but perhaps the noble Lord meant the amendment to be read with Amendment No. 20, which we shall come to in a moment. However, I hope that what I have said is of assistance for the time being.


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