Business Clinic: How do we formalise farm staff housing rights?

Whether it’s a legal, tax, finance or management question, Farmers Weekly’s expert panel can help.

Here, Aiden Wiffen of Thrings’ property litigation team, advises on formalising employee accommodation agreements in light of changes to the law.

See also: Business Clinic: Farm’s buyer wants a pre-exchange inspection

Q: We have three full-time employees who have occupied cottages on the farm on informal unwritten agreements for about two, seven and 15 years respectively.

We are happy with their work but want to formalise their accommodation arrangements, especially as we hear the law is changing around residential tenancies.

Does this affect us and, if so, what should we do?

A: This is a very common situation for farms and estates, where accommodation has been provided informally as part of long-standing working relationships.

However, with legislation changing through the incoming Renters’ Rights Act 2025, it’s a prime opportunity to regularise matters.

Why formalising now matters

At present, while having your three employees living in farm cottages for varying periods without written agreements may have worked well in practice, legally it creates uncertainty.

Over time, occupants can acquire significant rights, particularly where no clear link exists between their employment and their occupation of the property.

The Renters’ Rights Act, coming into force from 1 May 2026, makes this more important, representing a major shift in residential tenancy law, abolishing assured shorthold tenancies (ASTs).

Replacing them are open-ended assured periodic tenancies that have no fixed end date and can only be terminated using specific statutory grounds.

The agricultural context

The good news is that the legislation recognises the unique position of farming businesses.

Rural employers often need to house workers close to the holding, and the law continues to provide mechanisms to support this.

However, those protections aren’t automatic and depend heavily on how the occupation is documented and classified. There are three main categories to consider:

• Service occupancies (where occupation is required for the job and ends automatically with employment)
• Assured agricultural occupancies (AAOs) – which carry strong security of tenure – obtained by those working more than 35 hours a week and living in landlord-provided housing
• Assured tenancies with an agricultural “opt-out”

Determining which category each of your employees falls into will be the first crucial step.

It is worth noting that commercial tenancies – Farm Business Tenancies (FBTs) and tenancies under the Agricultural Tenancy Act 1986 or Agricultural Holdings Act 1995 – are unaffected.

Risks of informal arrangements

With unwritten agreements, there’s a real risk that your employees may already have rights more akin to ASTs, particularly for those who’ve been in occupation for many years.

For example, the employee housed for 15 years may already benefit from significant statutory protection, especially if the accommodation hasn’t been clearly tied to their employment.

The new regime strengthens those protections further, and recovering possession could be difficult without relying on a valid statutory ground.

The importance of the ‘opt-out’

One of the most important tools available to agricultural landlords under the new act is the ability to “opt out” of full assured tenancy protection in certain circumstances.

Where a valid opt-out notice has been served, landlords retain access to specific agricultural possession grounds. These include situations where:

• The property is needed for a replacement agricultural worker (employed or self-employed) the employee’s job comes to an end or
• A superior agricultural lease (under the Agricultural Tenancy Act 1995/Agricultural Holdings Act 1986) affecting the property expires
• Possession by a superior landlord who becomes direct landlord after superior tenancy ends.

Other grounds may also apply, for instance where the property is sold or the landlord’s family wishes to occupy.

Without a valid opt-out, you may find yourself unable to recover possession even where there is a genuine operational need for the property.

Landlords can avoid creating an AAO by serving a Section 24 notice (replacing Form 9) before the tenancy begins. Existing valid Form 9 notices remain effective.

What you should do now

You should not simply issue new tenancy agreements without careful thought. Instead, a structured review is needed.

• Identify who is living in each property, their role on the farm, and how essential the accommodation is to their job.
• Consider whether each employee genuinely needs to live in the property to perform their duties. This will help determine whether a service occupancy is appropriate.
• Take advice on what legal status each occupier may already have acquired, particularly for the longer-term residents.
• Put proper documentation in place – This may include new employment contracts clearly linking occupation to the role, written occupancy or tenancy agreements, and opt-out notices where appropriate.
• Think about succession, retirement housing and how you will manage properties if employees leave or roles change.

The Renters’ Rights Act does not remove your ability to use farm cottages as part of your workforce strategy, but it does mean that “informal” is no longer a safe option.

Getting tenancy status right at the outset will be central to protecting both workforce housing and long-term business resilience.

It’s important to handle this sensitively. Attempting to change arrangements unilaterally, or without proper legal footing, could trigger disputes or inadvertently strengthen an occupier’s position.

Taking advice now, before the new regime fully beds in, will give you far greater flexibility than trying to resolve issues later.

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