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8.15 p.m.

Earl Howe: The common law provisions regarding tenant's fixtures are complex and of little assistance to tenants of agricultural holdings. That is why Section 10 of the 1986 Act provided specific rules to deal with their needs. However, even those rules have not proved entirely satisfactory where one tenancy ends and another one is granted between the same parties.

Clause 8(1) of the Bill, therefore, gives a right to a tenant in possession to remove any fixture affixed by him, as well as any building erected by him, on the holding irrespective of whether the affixing or erecting were done during a previous tenancy agreement between the parties. Although the idea of providing a time limit after the end of a tenancy during which a tenant may remove his fixtures has some superficial attraction, it would in fact considerably narrow down the rights given by Clause 8, which are not time limited, where the tenant remains in possession as tenant. Clause 8(1) reflects the position at common law that a tenant continues to have the right to remove non-agricultural trade fixtures and ornamental fixtures so long as he is in possession of the holding as tenant. At common law

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he retains that right either by remaining in occupation as a tenant, whether or not the landlord has specifically agreed—that is known as "hold over"—or as a tenant with a new lease. Accordingly, the clause reflects our understanding of that position.

The Committee should bear in mind the fact that the notice provisions of the Bill ensure that both parties know at least a year in advance that a tenancy is due to end. I believe that that period of time gives every opportunity to settle arrangements over fixtures and buildings which a departing tenant wishes to remove. Therefore, a further two months from the end of the tenancy is, I suggest, simply not necessary in those circumstances. With that explanation, I hope that the noble Lord will be content to withdraw the amendment.

The Earl of Kinnoull: Before the noble Lord responds, can my noble friend say whether the landlord has the right to acquire a fixture which is under valuation, as I believe is the case under the 1986 Act?

Earl Howe: The Bill as drafted will ensure that, where a tenant has carried out an improvement at his own expense on the holding and has obtained the landlord's consent in doing so, the tenant will be entitled to compensation at the end of the tenancy at a value to be determined which will reflect the value of such improvement. However, that is slightly different from the question posed by my noble friend.

Where, for example, an improvement has been carried out and no consent was granted then in normal circumstances the tenant would be allowed to take that asset away with him at the end of the tenancy. I suggest that in most cases there will be an agreement between the landlord and the tenant as to what should happen to the asset; in other words, whether it should stay on the holding or whether the tenant takes it away. If it stays on the holding, the tenant will seek to ensure that he obtains consent from the landlord so that he is entitled to compensation at the end of the day. There are various permutations involved. I believe that the Bill ensures that there is fair redress for the tenant and, indeed, fairness also for the landlord.

Lord Carter: I believe that the noble Earl asked whether the landlord had the right to acquire. We are talking about tenants' fixtures and not tenants' improvements. I do not believe that the landlord has the right to acquire in the sense that the two parties would have to come to an agreement if the landlord wished the fixture—not the improvement—to be left behind. I do not think that the landlord has the right to ask for it. I believe that the tenant and the landlord would have to agree with each other. If the tenant does not agree, I suspect that he can take the fixture away.

Earl Howe: As I said, Clause 8(1) of the Bill gives a right to a tenant in possession to remove any fixture affixed by him, as well as any building erected by him, on the holding irrespective of whether the affixing or erecting were done during the tenancy just passed or during a previous tenancy. I believe that I have covered my noble friend's point, although I was seeking to

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elaborate slightly on the matter by referring to improvements. I am sorry if I confused the issue by so doing.

Lord Gallacher: I am grateful to the noble Earl for the information that he has given the Committee on such an important matter. I am also grateful for the questions that have been asked arising from my moving of the amendment. I accept what the Minister said about the complexity of common law and also his criticism that the 1986 Act is not particularly satisfactory as regards the matter, so that any reliance upon it is unlikely to give the consolation that I was seeking.

I also noted what the noble Earl said about Clause 8(1) of the Bill which refers to the,


    "Tenant's right to remove fixtures and buildings".

By some miracle that I cannot explain, even before the noble Earl drew my attention to them, I underlined the vital words in Clause 8(1),


    "after the termination of the tenancy when he remains in possession as tenant (whether or not under a new tenancy)",

and so on. I believe that that is germane to what the noble Earl said. However, all I can do at this stage is to ask leave to withdraw the amendment. I shall take it away and try to understand it in the context of what I now know. If I fail to do so, which is highly probable, I shall seek again the advice of my unpaid legal adviser. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Carter moved Amendment No. 33:


Page 4, line 34, leave out ("(whether or not under a new tenancy)").

The noble Lord said: The amendment deals with a phrase which appears in brackets in Clause 8(1)(b); namely,


    "(whether or not under a new tenancy)".

We are advised that those words are unnecessary. To use a word that the Minister often uses when responding to my amendments, we believe that they are otiose. It would be helpful if the Minister could explain why they have been included. As I said, we have been told that they are not needed. I beg to move.

Earl Howe: This amendment would delete words which are intended to do no more than clarify the scope of a tenant's right to remove fixtures and buildings after the end of a farm business tenancy. In this respect, Clause 8(1) reflects the existing position at common law as regards the removal of non-agricultural trade fixtures and ornamental fixtures after the end of a tenancy.

The circumstances in which a tenant remains in possession as tenant may vary. He may remain in possession after the end of the tenancy for a short period on sufferance (that is, without the landlord's assent or dissent) without paying rent. This has been called an "excrescence on the term". He may remain with the landlord's agreement if there has been an unavoidable delay in moving to another holding. A new tenancy may be granted under other legislation—for example, if the holding was no longer primarily or wholly agricultural in character at the time the farm business tenancy ended, so that a new tenancy could not pass the essential tests prescribed by Clause 1 of the Bill. And, of course,

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parties may have agreed to a further farm business tenancy immediately after the previous tenancy ended. The omission of the words in brackets in Clause 8, page 4, line 34 would not alter the effect of the clause in any way, but would arguably make the provision less clear. That is why the words are there. With that explanation, I hope that the noble Lord will feel able to withdraw the amendment.

Lord Carter: I think the reply of the Minister means that the words are fairly otiose instead of actually otiose. I shall treasure the phrase "excresence on the term" and look forward to using it on a number of parts in the Bill which have been drafted by the Government. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Carter moved Amendment No. 34:


Page 4, line 39, leave out paragraph (b).

The noble Lord said: This amendment seeks to clarify the situation where there has been a fixture fixed or a building erected instead of some fixture or building belonging to the landlord which the tenant does not have the right to take away but where that fixture or building—I believe this is a fairly rare case—would have a greater value to the tenant than the original. The only example I can think of quickly—it is not a very good one—is in Wiltshire, where a milking parlour is now being used as a "tele cottage", believe it or not. That is not a very good example because one can hardly take a "tele cottage" away. However, I believe the point that has been made to us is that there will be cases under this subsection where a tenant is not allowed to remove the fixture or building because it replaces a fixture which belonged to the landlord. Nevertheless the fixture or building that the tenant leaves behind will be of greater value to the landlord than the building or fixture it replaced, if the Minister can follow me.

This is not a major point but it has been suggested that paragraph (b) should be omitted. This is a probing measure to determine what the argument is. I do not think there is a right to compensation for fixtures or buildings, only for tenants' improvements. I am talking about a tenant's fixture. I know that the Government would like to see the back of the 1986 Act. Under that Act one can make a deal with the incoming tenant for the value of the fixture. This matter is a little unclear and I suspect it is fairly rare that a fixture or building will have a greater value to the landlord than the original, but the tenant may not receive the compensation he should receive for the greater value of his replacement fixture or building. I beg to move.


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