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Up for review

16 December 13

The Scottish Government's current projects to deliver proposals for reforming the agricultural tenancy sector

by Alasdair Fox

Since coming to power, the Scottish Government has been concerned that the Agricultural Holdings (Scotland) Act 2003 has failed to deliver its main objective – increasing the amount of land available for letting.

Tenant Farming Forum

Its first response was the creation of the Tenant Farming Forum (TFF), which brought together various stakeholders in the landlord/tenant sector to make recommendations for legislative reform to stimulate the market (particularly for young entrants).

Some reforms, notably (but not only) reducing the minimum period of a limited duration tenancy (LDT) from 15 to 10 years, a new framework for providing and maintaining fixed equipment for LDT, and a more comprehensible procedure for tenants to opt out of post-lease agreements to 1991 Act leases, have already been enacted. The Rent Review Sub-group has recommended that the rent review formula for traditional tenancies should not be changed, coupled with proposals (now largely implemented) for better understanding of the system.

Further proposals by TFF in relation to repair/renewal/improvement of and investment in fixed equipment, waygoing compensation, diversification, assignation, succession and dispute resolution (workstreams referred to it by the minister himself) are expected to be made in the near future.

Legislation Review Gropu

When it returned to power in 2011, the Government committed itself to undertake a review of the legislation within a timescale such as to enable it to take decisions on future policy for the tenant farming sector during the current parliament and beyond. This has resulted in the establishment, on 8 November 2013, of the Agricultural Holdings Legislation Review Group (AHLRG), to be chaired by the minister himself and manned by six persons (including two lawyers) experienced and skilled in the sector, supported by a secretariat and research programme. The AHLRG will hold regular discussions with TFF, the Land Court and the Scottish Human Rights Commission.

Aims

The overarching aim of the AHLRG is to determine what, if any, changes are required to achieve the Government’s vision of a dynamic tenant farming sector which gets the best from the land and its people and provides opportunities for new entrants, as part of a sustainable future for Scottish farming, by considering the following:

provision of opportunities for more flexible farming arrangements, to enable farming businesses to develop and move through the tenant farming sector;

enabling tenant farmers and their landlords to develop their business relationships to optimise benefits and agree fair and reasonable rents;

modernising the legislation, to be flexible enough to meet the changing needs of the agricultural industry and economy;

identifying appropriate interventions and actions (including broader policy, legal and fiscal) to overcome barriers, weaknesses or inadequacies in current arrangements.

Objectives

The AHLRG has also been set a number of objectives:

to examine the impact of agricultural holdings legislation on the tenant farming sector;

to examine the impact of past and present industry-led initiatives and interventions on tenant farming;

to determine the extent to which the legal framework is conducive to (a) farmland being let; and (b) new entrants being encouraged into farming;

to identify how, by when, and the extent to which changes to current tenant farming policy and legislation are required, including consideration of the outcome of the TFF workstreams;

to examine and determine the extent to which fiscal measures, including those not currently within devolved competence, could be developed to encourage succession and the letting of land to new entrants;

to examine absolute right to buy (ARTB) for traditional tenancies (not limited duration tenancies), and its impact on farming, including landownership and the wider economy of Scotland;

to make recommendations to create a better environment and increase the opportunity for tenants and new entrants to gain access to agricultural land.

The AHLRG is due to deliver an interim report (including on ARTB) in June 2014, and its final report and recommendations, including any policy, legislative or fiscal changes, and information on methods to upgrade Government data collection on tenant farming issues, by December 2014. Ministerial decision will follow in January 2015.

Salvesen v Riddell: the proposed fix

Scottish ministers are consulting on proposals to remedy the human rights defect affecting certain landlords terminating limited partnership tenancies, identified in Salvesen v Riddell [2013] UKSC 22 (Journal, June 2013, 28). Three groups are identified, for each of whom a different avenue into s 73 of the 2003 Act is proposed as a means of recovering vacant possession. The consultation is at www.scotland.gov.uk/Publications/2013/11/4471/0; the deadline for responses is 7 February 2014. Click here for a fuller briefing.

Are you a specialist?

Allan Collie of Ledingham Chalmers, Aberdeen has prepared a note on the scope of work considered relevant to becoming an accredited specialist in agricultural law: see Journal online (shortcut link: bit.ly/1cYbybI).

ALASDAIR FOX Consultant, Anderson Strathern LL

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