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Land Reform (Scotland) Act 2016 – Update

Whilst both local and national politicians jostle for position behind the scenes, work of bringing forward secondary regulation in order to implement the provisions of the Land Reform (Scotland) 2016 continue, but perhaps not at the speed which many hoped for.

To date, the main issues affecting the agricultural sector have been the establishment of the land commission and appointment of a tenant farming commissioner together with the implementation of an expanded range of eligible assignees and successors to traditional 1991 Act tenancies. Questionnaires have been sent out in respect of the rating of deer forests and shooting rights but no rateable values announced as yet.

The next stage is the introduction of the amnesty on agricultural tenant’s improvements which will operate from 13th June 2017 for a period of three years only and will apply to 1991 Act tenancies, LDTs and SLDTs. Qualifying improvements will be those completed by 13th June 2017 and included within, principally, parts one and two of Schedule 5 of the 1991 Act – although older improvements may also qualify.

The improvements amnesty aims to provide tenants with the opportunity to obtain compensation for long term improvements which they have carried out but where the correct notice procedure was not followed and consequently they have not been eligible for compensation at termination.

Whilst all types of agricultural tenancies are subject to the amnesty, not all improvements are and therefore the first step for any tenant wishing to pursue qualification is to check against the relevant schedules. Thereafter, landlord and tenant can enter into an Amnesty Agreement or more formally, the tenant can serve an Amnesty Notice on the landlord giving full details of the improvement and stating why it is fair and reasonable for compensation to be payable for it at waygo. The landlord then has the opportunity to object within two months failing which the right to compensation will be secured. If the landlord does object this may open the door to negotiation or, in case of dispute, there is provision for recourse to the Land Court.

Experience suggests that this is an opportunity for landlord and tenant to formalise agreement which might have been made verbally, and to clear up any dubiety where records are incomplete. Without agreement, long term improvements may qualify as fixtures with the tenant having a right to remove, subject to notice and the landlords right to take over at valuation. In some cases that might result in a higher value than statutory compensation on the basis of value to the incoming tenant and that should be considered before pursuing a binding agreement for an item to be scheduled as an improvement under the amnesty.

Other changes to the legislation remain in the pipeline with the introduction of Modern Limited Duration Tenancies, relinquishment and assignation of traditional tenancies and changes to rent review provisions to follow later in the year and into 2018.

 

Ben Burbridge is a rural practice surveyor with Edwin Thompson LLP based in the Galashiels office.  He provides professional advice to clients throughout southern Scotland on a range of rural issues.

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