Expert in her field of law: Local solicitor explains what grazing licences really mean for Yorkshire farmers

One of the most common assumptions made by landowners is that, if a document is called a grazing licence, that is what it is.

Unfortunately, the position is not always so straightforward.

Grazing arrangements between neighbouring farmers and landowners are commonplace across Yorkshire’s rural communities. They may begin innocently enough: a neighbouring farmer needs more grazing land, so terms are agreed and a document is signed. However, the legal effect of the arrangement may differ from what either party intended.

A grazing licence and a Farm Business Tenancy (FBT) are fundamentally different. A licence gives someone a right to use land, whereas an FBT creates a landlord-and-tenant relationship and gives the tenant certain rights that may not have been anticipated when the arrangement was drawn up.

The crucial issue is often exclusive possession.

If an occupier is given sole use of a defined parcel of land and is largely left to get on with it, there is a risk that the arrangement may amount to a tenancy, regardless of the what the document is called. Courts will generally look at how the arrangement works in practice rather than relying on its title..

Warning signs can include:

· occupation of a clearly defined area of land;

· repeated renewals over several years;

· little involvement by the landowner in how the land is used;

· responsibility for maintenance falling largely on the occupier; and

· terms that resemble those commonly found in a tenancy.

No single factor is decisive, but together they may indicate that the arrangement is closer to a tenancy than a licence.

The issue often comes to light only when the landowner wishes to do something else with the land, such as a sale, development opportunity, refinancing or renewable energy project. Plans like these can suddenly prompt a review of grazing arrangements that have not changed for many years.

By that stage, unwelcome surprises can be expensive.

This is not to say grazing licences should be avoided. Properly drafted and properly operated licences are a useful way of allowing grazing without creating a tenancy. However, the parties' conduct must be consistent with the document they signed.

As with many areas of rural property law, difficulties can arise because an informal arrangement has evolved over time into something different from what was originally envisaged.

For Yorkshire farmers and landowners, particularly where arrangements between neighbours may have continued from year to year, it is worth reviewing them periodically to check that what happens on the ground still matches what is written on paper. Doing so can identify potential issues before they become obstacles.

The key is to ensure the documentation reflects not only the parties' original intentions, but also the reality of how the land is occupied and used in practice.

For advice on this or any other real estate matters, call me on 01482 337223, email [email protected], or visit www.wilkinchapmanrollits.co.uk

Zaneta Andraszczyk is a real estate solicitor at Wilkin Chapman Rollits