Subject to the provisions of this section, where the tenant of an agricultural holding intimates to the landlord in writing his desire to carry out on the holding or any part thereof an improvement specified in the Fourth Schedule to this Act, and the landlord refuses, or within a reasonable time fails, to agree in writing that the holding, or that part thereof, shall be treated as a market garden, the Secretary of State may, on the application of the tenant . . . F3and after being satisfied that the holding or that part thereof is suitable for the purposes of market gardening, direct that the last foregoing section shall, either in respect of all the improvements specified in the said Fourth Schedule or in respect of some only of those improvements, apply to the holding or to that part thereof, and the said section shall apply accordingly as respects any improvement carried out after the date on which the direction is given.

Where a direction is given under the foregoing subsection, then, if the tenancy is terminated by notice to quit given by the tenant or by reason of the tenant becoming notour bankrupt or executing a trust deed for behoof of his creditors, the tenant shall not be entitled to compensation in respect of improvements specified in the direction unless the tenant not later than one month after the date on which the notice to quit is given or the date of the bankruptcy or the execution of the trust deed, as the case may be, or such later date as may be agreed, produces to the landlord an offer in writing by a substantial and otherwise suitable person (being an offer which is to hold good for a period of three months from the date on which it is produced) to accept a tenancy of the holding from the termination of the existing tenancy thereof, and on the terms and conditions of that tenancy so far as applicable, and, subject as hereinafter provided, to pay to the outgoing tenant all compensation payable under this Act or under the lease, and the landlord fails to accept the offer within three months after the production thereof.

If the landlord accepts any such offer as aforesaid, the incoming tenant shall pay to the landlord on demand all sums payable to him by the outgoing tenant on the termination of the tenancy in respect of rent or breach of contract or otherwise in respect of the holding, and any amount so paid may, subject to any agreement between the outgoing tenant and incoming tenant, be deducted by the incoming tenant from any compensation payable by him to the outgoing tenant.

A direction under subsection (1) of this section may be given subject to such conditions, if any, for the protection of the landlord as the Secretary of State may think fit to attach to the direction, and, without prejudice to the generality of this subsection, where the direction relates to part only of the holding, the direction may, on the application of the landlord, be given subject to the condition that the tenant shall consent to the division of the holding into two parts (one such part being the part to which the direction relates) to be held at rents agreed by the landlord and tenant or in default of agreement determined by arbitration, but otherwise on the same terms and conditions (so far as applicable) as those on which the holding is held.

A new tenancy created by the acceptance of a tenant in accordance with the provisions of this section on the terms and conditions of the existing tenancy shall be deemed for the purposes of section seven of this Act not to be a new tenancy.