Important Considerations When Entering Into a Grazing Licence

What Is a Grazing Licence – And What Is It Not?

A grazing licence is a personal right that allows the licensee to graze animals on a piece of land for a limited period of time. It does not give the licensee exclusive possession of the property and should not allow the licensee to do anything other than graze livestock.

If the grazing licence grants any control over the land or includes rights to store machinery, erect structures or use the land continuously without breaks, there is a risk that it could be interpreted as a common law tenancy, which can provide legal protections for the licensee and restrictions on the landowner.

How Long Should a Grazing Licence Last?

Grazing licences are typically in place for short, seasonal periods – often under 12 months. When grazing occurs year after year without a formal re-licensing, or where there is no gap between licence periods, a tenancy can sometimes arise by default.

Licensors should therefore:

• Use written agreements for each grazing period.
• Avoid “rolling over” licences without reviewing the terms.
• Ensure there are clear breaks between licence periods.

Equally, Licensees should:

• Be aware that having animals on the land outside of the agreed licence period may lead to legal disputes.
• Not assume that previous, informal agreements carry forward.

Exclusive Possession: The Risk of Creating a Tenancy

One of the most crucial distinctions between a licence and a lease is exclusive possession, which is the right to occupy and control a property to the exclusion of all others, including the landowner.

If a licence grants exclusive possession of land, then the licence may be treated as a common law tenancy, even if the agreement states that it is a “Licence”.

Indicators of exclusive possession include:

• The licensee is the only person with access to the land.
• No active management or access by the landowner during the licence period.
• The use of the land for activities beyond grazing, such as storing equipment and erecting shelters.
• Long or open-ended agreements with no seasonal break.

If a court finds that a tenancy has been created, the licensee may acquire statutory protections, making it much more difficult and costly for the landowner to regain possession of the property.

To avoid this:

• Licences should be carefully drafted to prevent the licensee from having exclusive possession.
• Landowners should reserve the right to access the land and, ideally, exercise that right during the licence period.
• Avoid any language in the licence that may imply that the licensee has full control of the land.

Maintaining Control and Access Over Grazing Land

A grazing licence should not give the licensee free rein of the land. The licensor must retain control throughout the licence period. This includes reserving the rights to:

• Access the property for maintenance or inspections.
• Undertake land management tasks or conservation activities.
• Prevent any use of the land beyond grazing.

However, actually maintaining the property and having physical and practical control is just as important as reserving the rights in the agreement.

Payment Terms and Tax Considerations of Grazing Licences

Payment is usually made as a “licence fee” rather than rent, which may have implications for tax and subsidy purposes. For example:

• Grazing licences may affect eligibility for the Environmental Land Management or Basic Payment (Wales) scheme.
• Income received may be treated differently for income tax or inheritance tax planning.

Both parties should seek advice from their agent and financial advisor where subsidies or estate planning are involved.

How to End a Grazing Licence Legally and Effectively

Clear termination provisions are essential. A well-drafted licence should include: 

• A fixed end date.
• Specified notice requirements (if early termination is permitted).
• Confirm the obligation for the licensee to remove the animals and restore the land at the end of the licence period. 

The landowner should take steps to assert control over the property after the licence period ends, such as locking the gates or carrying out maintenance, to demonstrate that the licence has come to an end.

Environmental and Animal Welfare Responsibilities for Landowners and Licensees

In the context of grazing licence, both the licensor and licensee have legal obligations relating to:

• Animal welfare: The licensee is responsible for ensuring the welfare of the animals on the land. However, the licensor is responsible for maintaining the property in a state which is suitable for grazing animals.
• Land condition: The licensor may have stewardship obligations or environmental protections in place that must be respected. The licensor may wish to include provisions in the licence for the licensee to comply with any such obligations.
• Biosecurity: Agreed protocols should be set out in the licence to avoid contamination or the spread of disease.

How We Can Help

Grazing licences, when used correctly, provide flexibility for both landowners and graziers. However, they should not be treated as casual or informal arrangements. Poorly drafted or misunderstood licences can result in unintended tenancies, legal disputes or the loss of control over property.

Whether you are granting access or pasture or looking for short-term grazing land, it is essential to have a clear, well-structured agreement, and to take advice tailored to your land, business and future plans.  

In Blanchards Bailey, our specialist Agricultural Property lawyers provide tailored advice to support landowners and occupiers in managing grazing licence arrangements. Whether you need assistance drafting or reviewing a grazing licence or wish to assess whether your current arrangement is still fit for purpose, we are here to help.

For expert guidance, please contact Sarah Dunlop on 01258 488205, or email sarah.dunlop@blanchardsbailey.co.uk

You can also visit our Agricultural Property webpage for more information.