Cultivating a cooperative landlord-tenant relationship

Landlords and tenants need to have confidence in a balanced system if they are to take up the opportunities offered by Environmental Land Management and private schemes, and the needs of tenants must be balanced with landowners’ property interests.

A new code of practice was launched this year, guiding the standards of behaviour expected from landlords, tenants and those providing professional advice on agricultural tenancy matters. It was produced and led from within the industry by a working group that included the CLA, representing every facet of the tenanted sector, with support from Defra.

Mark Cunliffe-Lister owns the 20,000-acre Swinton Estate on the outskirts of Masham, North Yorkshire. It is one of England’s largest privately owned estates, comprising Swinton Park, a heritage castle hotel, a cookery school, Swinton Bivouac tree lodge and glamping retreat, a country club, a spa and a restaurant.

Forestry, farmland and reservoirs make up around two-thirds of the land, with the other third being open moorland. The estate has 30 tenants who, individually, manage and farm an average of 300 acres.

Formal tenant meetings and visits are arranged at two-year intervals, at which Mark and his tenants can discuss important issues with their tenancies and farming operations. For more intermittent issues, tenants have an open door to the estate office to seek advice.

Mark believes that communication, collaboration and understanding are the foundation of a constructive, mutually beneficial tenancy.

When three farmers gave up their tenancies through retirement, the estate was left with 850 acres. “There was a great debate about taking land back in hand for providing ecosystem services,” says Mark. “However, we wanted to maintain productive farming alongside ancillary services, such as forestry, and environmental projects.

“We did a baseline assessment of the land to identify the most appropriate areas for tree planting, other ecosystem services and farming. The estate also took part in a Landscape Recovery test and trial, taking stock of an entire catchment area and working with tenants to see how best to use the land.”

Around 100 acres were earmarked for tree planting and ecosystem services, 100 were added to a neighbouring core estate tenant, and in October 2023, Ed Staveley’s farm business partnership signed a tenancy agreement with the estate that covered the other 650, making it one of the estate’s largest tenants.

Ed currently has a flock of 400 ewes (with the aim of increasing this to 800), plus shorthorns and a mix of rare breed and commercial outdoor pigs. He works in co-operation with Andrew Loftus, another farmer, making their farming operation more resilient.

In setting up the tenancy, the estate used its lawyers to incorporate the CLA and Tenant Farmers Association guidance on joint working between landlord and tenant, giving the agreement a high degree of flexibility in land use decisions.

The agreement sets out the core tenancy and the basic expectations and obligations of both landlord and tenant. A “live” appendix, designating tracts of land for potential future use to deliver ecosystems services and recording each party’s projects, gives the agreement transparency and more fluidity.

The appendix provides flexibility, allowing both parties to jointly decide and agree which future ecosystems services they want to provide and which schemes they want to apply for. Any changing agreement will also determine which party will be responsible for fulfilling such services, including payment arrangements.

Mark says: “We’ve run joint schemes in the past, for instance on the moor we entered in a Higher Level Stewardship scheme with the moorland graziers. We work out who does what, and the money is divvied up between the landlord and tenant according to their respective roles and responsibilities.

“There is not a set way of dealing with this – but it all starts with an open discussion to reach an agreement.”

Reflecting on his application, Ed says: “The publicly published agreement included a map to state which parts of the land are in Landscape Recovery. The land in proximity of the farm sheds is the most productive, so areas further away are generally less productive and could be entered into environmental schemes ‘as and when’.

“Tenants as well as landlords can suggest future schemes on land mapped out in the agreement’s appendix. As I have worked as both a farmer and an agent, I have a balanced understanding of what can be achieved if landlord-tenant objectives are aligned.”

Ed’s agreement is for 17 years, with a three-year mutual break option if either party decides it’s not working, which may be applied after the second year. Ed is obligated to primarily farm, although the good husbandry requirements have been updated to reflect recognised best practice. He is not allowed to sub-contract his farming or diversify land use beyond ancillary natural capital projects. Any landlord-tenant disagreements can be referred to arbitration.

In the future, Mark believes farm tenancy agreements will be more flexible, with a key aspect being accompanying land management agreements that are appendices to the documents.

On the role of the CLA and a tenant commissioner, Mark says: “Similarly, working with a neutral commissioner can proactively champion the sharing of best practice to avoid future issues.”

The CLA continues to represent private landownership’s interest within the Farm Tenancy Forum and contributes at various levels through working groups on Environmental Land Management design. Members are encouraged to share with the CLA their positive and negative experiences when entering new farm business tenancies – please contact your local team.