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| Crown Copyright Acknowledged | | Part 1:Agricultural tenancies | | |
Chapter 1
Types of tenancy
Tenancies under the 1991 Act
1. Application of the 1991 Act to agricultural holdings
(1) This subsection applies where—
(a) a lease is entered into on or after the coming into force of this subsection; and
(b) the tenancy under the lease is a tenancy of an agricultural holding in relation to which the Agricultural Holdings (Scotland) Act1991(c.55) (in this Act referred to as “the 1991 Act”) would have applied had the lease been entered into immediately before the coming into force of this subsection.
(2) Where subsection (1) applies, the 1991 Act does not apply in relation to the tenancy (except in so far as this Act applies any provision of that Act to short limited duration tenancies or limited duration tenancies) unless the lease—
(a) is entered into in writing prior to the commencement of; and
(b) expressly states that the 1991 Act is to apply in relation to,
the tenancy.
(3) Section 2 (leases for less than year to year) of the 1991 Act is repealed.
(4) Where, in respect of a tenancy of an agricultural holding—
(a) the lease is entered into before the coming into force of this subsection and the 1991 Act applies in relation to the tenancy; or
(b) the lease is entered into on or after the coming into force of this subsection and (by virtue of the conditions mentioned in paragraphs (a) and (b) of subsection (2) being fulfilled) the 1991 Act applies in relation to the tenancy,
the tenancy under the lease is in this Act referred to as a “1991 Act tenancy”. |
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2 . Conversion from 1991 Act tenancy to limited duration tenancy
(1) The landlord and tenant under a 1991 Act tenancy may terminate the tenancy by agreement provided that—
(a) the agreement is—
(i) in writing and specifies the date on which the termination is to have effect;and
(ii) made not less that 30 days before that date; and
(b) subsection (2) is complied with.
(2) This subsection is complied with if the landlord and tenant enter into a lease constituting a limited duration tenancy for a term of not less than 25 years which—
(a) comprises or includes the same land as that comprised in the tenancy being terminated under subsection (1); and
(b) has effect from the date on which the termination under that subsection has effect.
(3) The landlord or tenant is entitled, at any time before the date on which the termination under subsection (1) has effect, to revoke (without penalty)—
(a) the agreement made under that subsection; and
(b) the lease mentioned in subsection (2),
by giving notice in writing to the other of the revocation.
(4) On termination of a 1991 Act tenancy under subsection (1), the tenant is entitled to—
(a) such compensation for improvements as the tenant would have been entitled to under Part IV (compensation for improvements) of the 1991 Act (or, as the case may be, under the lease); and
(b) such compensation as the tenant would have been entitled to under section 45A (compensation arising as a result of diversification and cropping of trees) of that Act,
were the tenant quitting the holding at the termination of the tenancy.
(5) Where a 1991 Act tenancy is terminated under subsection (1), section 21 (notice to quit and notice of intention to quit) of the 1991 Act does not apply in respect of the tenancy. |
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Leases for grazing or mowing
3. Leases for grazing or mowing
(1) This section applies to a tenancy under a lease under which agricultural land is let for the purpose of its being used only for grazing or mowing during some specified period of the year (whether or not the lease expressly so provides).
(2) The tenancy is not to be constituted for a period of more than 364 days; and where the term of the tenancy has expired, the land may not be let for the same purpose to the same tenant before one clear day from the date of expiry of the tenancy has elapsed. |
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New types of tenancy
4. Short limited duration tenancies
(1) Where—
(a) agricultural land is let under a lease for a term of not more than five years;
(b) the land comprised in the lease is not let to the tenant during the tenant’s continuance in any office, appointment or employment held under the landlord; and
(c) the lease does not constitute—
(i) a 1991 Act tenancy; or
(ii) a tenancy to which section 3 applies,
the tenancy under the lease is, by virtue of this subsection, a short limited duration tenancy.
(2) Without prejudice to subsection (1), where the tenant remains in occupation of the land after the expiry of the term of a tenancy to which section 3 applies with the consent of the landlord, the tenancy continues to have effect as if it were for a term of—
(a) 5 years; or
(b) such period of less than 5 years as the landlord and tenant may agree
to,
and the tenancy is, by virtue of this subsection, a short limited duration
tenancy.
(3) Where the tenant remains in occupation of the land after the expiry of the term of a short limited duration tenancy of less than 5 years (including such a term fixed by virtue of subsection (2)) with the consent of the landlord, the tenancy continues to have effect as if it were for a term of—
(a) 5 years; or
(b) such period of less than 5 years as the landlordand tenant may agree
to.
(4) This subsection applies to a short limited duration tenancy where—
(a) the term of the tenancy has expired and the tenant has not remained in occupation of the land; or
(b) during the term of the tenancy, the landlord and tenant have terminated the tenancy by agreement.
(5) Where the landlord and tenant enter into a lease constituting a further short limited duration tenancy which—
(a) comprises the same land as that comprised in the tenancy to which subsection (4) applies; and
(b) has effect less than one year from the expiry of the term of, or termination of, that tenancy,
the expired period of the term of that tenancy counts as an expired period of the term of the further tenancy; but this is subject to subsection (3) of section 5. |
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5. Limited duration tenancies
(1) Where—
(a) agricultural land is let under a lease for a term of not less than fifteen years;
(b) the land comprised in the lease is not let to the tenant during the tenant’s continuance in any office, appointment or employment held under the landlord; and
(c) the lease does not constitute a 1991 Act tenancy,
the tenancy under the lease is, by virtue of this subsection, a limited duration tenancy.
(2) Where the tenant remains in occupation of the land after the expiry of the term of a short limited duration tenancy of 5 years (including such a term fixed by virtue of section 4(2) or (3)) with the consent of the landlord, the tenancy has effect as if it were for a term of 15 years commencing on the expiry of the term of the short limited duration tenancy; and the tenancy is, by virtue of this subsection, a limited duration tenancy.
(3) Where subsection (5) of section 4 results in a short limited duration tenancy purporting to be for a term of more than 5 years, the tenancy has effect as if it were for a term of 15 years; and the tenancy is, by virtue of this subsection, a limited duration tenancy.
(4) Without prejudice to subsections (2) and (3), where a lease constituting a tenancy of agricultural land, as described in paragraphs (b) and (c) of subsection (1), purports to be for a term of more than 5 years and less than 15 years, the tenancy has effect as if it were for a term of 15 years; and the tenancy is, by virtue of this subsection, a limited duration tenancy. |
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Chapter 2
General provision as to new types of tenancy
Short limited duration tenancies and limited duration tenancies:
general provision
6. Assignation, subletting and termination of short limited duration tenancies
(1) The tenant may not assign a lease constituting a short limited duration tenancy nor sublet the land comprised in the lease.
(2) A short limited duration tenancy may be terminated by the landlord and tenant by agreement. |
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7. Assignation and subletting of limited duration tenancies
(1) A lease constituting a limited duration tenancy may be assigned by the tenant if, following notice under subsection (2), the landlord consents to a proposed assignation.
(2) The tenant must give the landlord a notice in writing of any intention of the tenant to assign the lease; and the notice must include the particulars of the proposed assignee, the terms upon which the assignation is to be made and the date on which it is to take effect.
(3) The landlord may withhold consent to the proposed assignation if there are reasonable grounds for doing so; and, in particular, the landlord may withhold consent if not satisfied that the proposed assignee—
(a) would have the ability to pay—
(i) the rent due under the lease; or
(ii) for adequate maintenance of the land; or
(b) has the skills or experience that would be required properly to manage and maintain the land in accordance with the rules of good husbandry.
(4) Any such withholding of consent (and the grounds for withholding it) is to be intimated in writing to the tenant within 30 days of the giving of the notice under subsection (2); and, if no such intimation is made, the landlord is (except where the landlord exercises the right under subsection (5) to acquire the tenant’s interest in the lease) deemed to have consented to the proposed assignation.
(5) Where the landlord has been given notice under subsection (2), the landlord is entitled to acquire the tenant’s interest in the lease provided that—
(a) the landlord gives the tenant notice—
(i) in writing; and
(ii) within 30 days of the giving of the notice under subsection (2),
of the landlord’s intention to acquire that interest; and
(b) the terms upon which the landlord acquires that interest are no less favourable to the tenant than any reasonable terms upon which the proposed assignation was to have been made.
(6) For the purposes of subsection (3)(b), what is good husbandry is to be construed by reference to the Sixth Schedule to the Agriculture (Scotland) Act 1948 (c. 45).
(7) A tenant may sublet the land comprised in a lease constituting a limited duration tenancy only on such basis as the lease expressly permits. |
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8. Continuation and termination of limited duration tenancies
(1) A limited duration tenancy may be terminated by agreement between the landlord and tenant if the agreement is in writing and—
(a) is entered into after the commencement of the tenancy; and
(b) makes provision as to compensation payable by the landlord or the tenant to theother.
(2) At and after the expiry of the term of a limited duration tenancy, the tenancy continues to have effect in accordance with subsection (6) unless it is terminated in accordance with this section.
(3) At the expiry of the term of a limited duration tenancy, the landlord may terminate the tenancy by giving a notice under this subsection to the tenant.
(4) A notice under subsection (3) must—
(a) be in writing and state that the tenant shall quit the land on the expiry of the term of the tenancy; and
(b) be given not less than one year nor more than two years before the expiry of theterm of the tenancy, provided that not less than 90 days have elapsed from the date on which the intimation mentioned in subsection (5) is given.
(5) A notice under subsection (3) is of no effect unless the landlord has given written intimation of the landlord’s intention to terminate the tenancy to the tenant not less than two years nor more than three years before the expiry of the term of the tenancy.
(6) If the tenancy is not terminated in accordance with this section, it continues in effect on a cycle of continuations; that is to say, a continuation of three years (a “first short continuation”) followed by a further continuation of three years (a “second short continuation”) followed by a further continuation of fifteen years (a “long continuation”) (the cycle being repeated without limit to the number of times).
(7) During a first short continuation, the landlord may terminate the tenancy by giving a notice under this subsection to the tenant; and subsections (4) and (5) apply to a notice under this subsection as they do to a notice under subsection (3).
(8) During a second short continuation, the landlord may terminate the tenancy by giving a notice under this subsection to the tenant.
(9) A notice undersubsection (8)—
(a) must be in writing and state that the tenant shall quit the land on the relevant day; and
(b) may be given at any time during thecontinuation.
(10) For the purposes of subsection (9)(a)—
(a) where the notice has been given during the first year of the continuation, the relevant day is the day on which the continuation expires; and
(b) in any other case, the relevant day is the day on which the period of two years from the giving of the notice expires (and the continuation is deemed to expire on the relevant day).
(11) During a long continuation, the landlord may terminate the tenancy by giving a notice under this subsection to the tenant; and subsections (4) and (5) apply to a notice under this subsection as they do to a notice under subsection (3).
(12) For the purposes of subsections (7) and (11), the references in subsections (4) and (5) to the expiry of the term of the tenancy are to be read as references to the expiry of the continuation.
(13) At or after the expiry of the term of a limited duration tenancy, the tenant may terminate the tenancy by giving a notice under this subsection to the landlord.
(14) A notice under subsection (13) must—
(a) be in writing and state that the tenant intends to quit the land on the expiry of the term of the tenancy or, as the case may be, a continuation of the tenancy; and
(b) be given not less than one year nor more than two years before the expiry of the term of the tenancy or, as the case may be, continuation.
(15) During the term of a limited duration tenancy, the term of the tenancy may be extended by the landlord and tenant by agreement in writing. |
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9. Review of rent under limited duration tenancies
(1) Where a lease constituting a limited duration tenancy makes no provision for review of rent, the rent due as payable under the lease is to be reviewed and determined in accordance with this section.
(2) A rent review is to take place on such date as the landlord or tenant may specify in a notice in writing to the other provided that—
(a) the notice is given not less than one year nor more than two years before the date so specified; and
(b) the date so specified is not less than three years—
(i) in the case of the first rent review, from the commencement of the tenancy; or
(ii) in the case of any subsequent rent review, from the date of the review under this subsection which precedes it.
(3) On review, subject to subsections (4) to (7), the rent payable is the rent which the tenancy would reasonably be expected to fetch in the open market where there is a willing landlord and a willing tenant—
(a) disregarding—
(i) any effect on rent due to the fact that the tenant is in occupation of the land; and
(ii) any distortion in rent due to a scarcity of lets; and
(b) having regard to—
(i) the terms of the tenancy (other than those relating to rent);
(ii) information about rents for other agricultural tenancies (including when fixed) and any factors affecting those rents (or any of them) except any distortion due to a scarcity of lets; and
(iii) the current economic conditions in the relevant sector of agriculture.
(4) Account is to be taken of any increase in the rental value of the land resulting from the use of the land for a purpose that is not an agricultural purpose.
(5) No account is to be taken of any increase in the rental value of the land resulting from improvements—
(a) so far as—
(i) they have been carried out wholly or partly at the expense of the tenant (whether or not that expense has been or will be reimbursed by any grant) without equivalent allowance or benefit having been made or given by the landlord in consideration of their execution; and
(ii) they have not been carried out under an obligation imposed on the tenant by the terms of the lease; and
(b) which have been carried out by the landlord, in so far as the landlord has received or will receive any grant in respect of them,
nor may the rent be determined to be a higher amount than would have been payable if those improvements had not been so carried out.
(6) For the purposes of subsection (5)—
(a) subject to paragraph (b), “improvements” is to be construed by reference to Schedule 5 to the 1991 Act; and
(b) the continuous adoption by the tenant of a standard of farming or a system of farming more beneficial to the land than the standard or system required by the terms of the lease or, in so far as no system of farming is so required, than the system of farming normally practised on comparable agricultural land in the district, is to be treated as an improvement xecuted at the tenant’s expense.
(7) No account is to be taken of—
(a) any reduction in the rental value of the land as a result of any dilapidation or deterioration of, or damage to, fixed equipment or land caused or permitted by the tenant; or
(b) any such reduction resulting from—
(i) the use of any of the land, or changes to the land, for a purpose that is not an agricultural purpose; or
(ii) the carrying out of conservation activities on the land.
(8) The rent determined in accordance with this section is to take effect from the date of the rent review. |
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10. Increase in rent: landlord’s improvements
(1) Where the landlord has carried out an improvement on the land comprised in a lease constituting a limited duration tenancy (whether or not one specified in Schedule 5 to the 1991 Act)—
(a) at the request of, or in agreement with, the tenant;
(b) in pursuance of an undertaking given by the landlord by virtue of section 49(2) (as read with section 39(3) of the 1991 Act); or
(c) in compliance with a direction given by the Scottish Ministers under powers conferred on them by or under any enactment,
subject to subsections (2) and (3), the rent payable is to be increased as from the completion of the improvement by an amount equal to the increase in the rental value of the land resulting from the carrying out of the improvement.
(2) The landlord must give the tenant notice in writing of any such increase in the rent payable within 6 months of the completion of the improvement.
(3) Where any grant has been made to the landlord in respect of an improvement mentioned in subsection (1), the increase in rent under that subsection must be reduced proportionately. |
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11. Variation of rent by Land Court
Where it appears to the Land Court, in determining any matter in relation to a limited duration tenancy by virtue of section 13 or 16, that it is equitable that the rent payable under the lease should be varied, it may vary the rent accordingly. |
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12. Right of tenant to withhold rent
(1) Subsection (2) applies to an order—
(a) made under subsection (1)(b) of section 84; and
(b) which is in relation to a failure of the landlord in a short limited duration tenancy ora limited duration tenancy to fulfil any obligation the landlord has towards the tenant in respect of fixed equipment.
(2) Where the landlord has failed—
(a) in a material regard; and
(b) as at the date specified under subsection(2) of that section,
to comply with an order to which this subsection applies, the tenant may apply to the Land Court for an order under subsection (3).
(3) An order under this subsection may(either or both)—
(a) authorise the tenant to carry out such work as the landlord would have to have carried out for the landlord to comply with the order to which subsection (2) applies; and
(b) authorise the tenant to withhold payment of the rent payable to the landlord under the tenancy on the condition that the tenant consigns to the Land Court the amount otherwise so payable.
(2) The Land Court may, on the application of the tenant, from time to time release to the tenant any of the amount so consigned towards or in satisfaction of any reasonable costs incurred or to be incurred by the tenant for the purposes of or in connection with the carrying out of such work as is mentioned in paragraph (a) of subsection (3).
(3) The Land Court, on the application of the landlord and having regard to—
(a) whether any work mentioned in paragraph (a) of subsection (3) remains to be carried out; and
(b) any costs mentioned insubsection (4),
may terminate the order made under subsection (3) if it considers that it would be not be appropriate for the order to remain in force.
(4) Where the Land Court terminates the order made under subsection (3), it is to order such division between the landlord and tenant of the amount (or, where any of the amount has been released to the tenant, any remaining amount) consigned under subsection (3)(b) as it considers to be equitable.
(5) Any work carried out and authorised under subsection (3)(a) is to be treated as having been carried out at the landlord’s expense in so far as the costs of the work have been or are to be satisfied by the release to the tenant of any amount consigned under subsection (3)(b).
(6) Any right of the landlord to irritate the lease or remove the tenant on the grounds of non-payment of rent is unenforceable if the non-payment of rent is in consequence of an authorisation under subsection (3)(b) to withhold rent.
(7) Any term of the lease or of any agreement between the landlord and tenant that purports to deprive the tenant of any right conferred by virtue of this section is, in so far as it so purports, of no effect. |
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13. Written leases and the revision of certain leases
(1) Where, in respect of a short limited duration tenancy or a limited duration tenancy—
(a) there is not in force a lease in writing; or
(b) there is in force a leasein writing but—
(i) the lease does not contain provision for the matters mentioned in subsection (2)(a) or contains provision inconsistent with those matters; or
(ii) the lease contains provision inconsistent with section 16 (as read with section 5(2) to (4) of the 1991 Act),
the landlord or tenant may give notice in writing to the other requesting that a lease in writing be entered into containing the matters mentioned in subsection (2).
(2) Those matters are, as the case may be—
(a) provision for all the matters specified in Schedule 1 to the 1991 Act (that Schedule applying for the purposes of this section as it does for the purposes of that Act) or provision consistent with those matters; or
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