Scottish land reform – what farmers need to know

Land ownership and tenure in Scotland faces the biggest shake-up for nearly 70 years when SMPs put the Scottish Land Reform Bill through its last stage in Holyrood.

The bill, which has attracted both support and criticism has cross-party support and looks likely to go through with only a few final tweaks on 16 March.

It will reset the way land ownership and use is approached, with an emphasis on greater collaboration between landowners, farmers and local communities in decision making and a wide range of changes to tenancy legislation.

Land reforms will not stop there, with the introduction of Scottish Land Commission to oversee ongoing changes. A lot of unknowns remain with the bill, however, which look likely to be fleshed out after it is passed.  

Here are the main changes that will affect farmers:

Community right to buy

One of the most controversial proposals. Communities will be able to buy land to further “sustainable development”, such as energy projects, park creation or affordable housing, if they can prove it is necessary for the community.

Landowners will have the right to contest applications.

Groups will be allowed to involve a third party, which some worry could allow developers or other corporate interests to drive right to buy.

The proposal may get some last-minute tweaks next week – NFU Scotland is pushing for a gap of three years between applications on the same piece of land and for the impact on the agricultural productive capacity of the holding to be taken into account.

Guidelines on how landowners should engage with communities will further detail how right-to-buy will work – but these won’t be drafted until after the bill has been passed.

Codes for tenant-landlord relationships

A new Tenant Farming Commissioner (TFC) will bring in codes of practice for landlord-tenant relationships and agents dealing with them.

It will handle alleged code breaches and its reports will be admissible before an arbitrator or court. The TFC will sit on the Land and Property Commission.

More flexible tenancy successions and assignations

Tenants will be able to pass their lifetime tenancies on to a wider range of relatives.

If a farmer on a 1991 Act tenancy does not have a successor they will be able to assign their tenancy (with their landlord’s agreement) to a new entrant or farmer progressing through the industry. However, the landlord will have first refusal to buy the tenancy back.

Tenant right to buy

If a landlord’s persistent failure to meet their obligations affects the tenant’s ability to maintain productive capacity, the tenant could gain the right to buy their holding.

Rent reviews change of focus

Rents will have to be based on the agricultural productive capacity of the holding rather than comparable evidence.

Repairs amnesty

During an amnesty, 1991 Act tenants will be able to ask for improvements they have made to be recognised by their landlord so they are properly compensated for them when they leave their tenancy.

Industry views

“NFU Scotland recognises community ownership of assets can have benefits.

“However, it remains concerned the bill does not provide adequate protection for farmers [in community right to buy].

“Ministers must have due regard to the detrimental impact on the business losing the land, particularly units where loss of any piece of land could be devastating.”

“NFUS has held extensive discussions with members regarding the agricultural holdings provisions and have pressed strongly for a Tenant Farming Commissioner, a productive capacity test for secure tenants, robust codes of practice, and a waygo [the negotiations at the end of a tenancy surrounding the value of improvements carried out or crops or livestock left at the point of departure] amnesty.

Gemma Thomson, policy manager, NFUS

“This bill represents the most significant changes to tenancy legislation since security of tenure was introduced in 1948.

“These reforms should result in fairer and more sustainable rents, provide greater confidence for tenants to invest, and create opportunities for new entrants and farmers to progress through the sector.

Christopher Nicholson, tenant farmer and chairman of the Scottish Tenant Farmers Association

“Many of our clients are concerned about the amendment that will enable 1991 Act tenants to sell or assign their tenancy to an individual who is either a ‘new entrant’ or ‘progressing in farming’.

“We are sceptical this amendment will breathe new life into the tenancy sector and suspect it will lead to a reduction in the amount of land being brought on to the letting market.

“The bill is very ‘light touch’ in saying how many of its provisions will actually be put into practice, and allows for the relevant Scottish minister to make decisions on this by means of secondary legislation, [which could] not be subject to consultation, or scrutiny via the Scottish parliamentary committee.”

Ralph Peters, partner and head of estate management in Scotland, Bidwells