Agricultural tenants may gain from further protections in the wake of the Holyrood elections,” writes Hamish Lean.
Together with the Scottish Parliamentary elections , Fergus Ewing continues to be pulling out changes which the SNP are contemplating to agricultural tenancy laws should they stay in power following May.
Among those steps which may be taken up would be to refine the principles about agricultural lease reviews.
Right now, in regard to a protected traditional agricultural tenancy, the lease review evaluation is a qualified receptive marketplace evaluation. This takes into consideration lettings of holdings to establish current market value but leaves out of consideration the renter’s own developments and leaves out of consideration some observable in open market rents brought on by a lack of supply.
But, it has been demonstrated to be somewhat hard in practice to specify a formula in which the effective capacity of any holding could be correctly assessed for lease purposes.
Bob McIntosh, the Tenant Farming Commissioner, affirms a new lease review evaluation established, amongst other elements, not just on the productive capability of this device but also taking into consideration the market value of allow farms together with every variable playing an equivalent part, like the evaluation that applies in England and Wales.
We might well see motions to introduce this type of test in Scotland.
Another place which might observe legal intervention is with regard to the elimination from a let plantation of agricultural property for development purposes.
Right now, so much as a protected property is concerned, in the event the landlord gets planning permission for a non-agricultural use within all of the lease farm that the landlord may serve a notice to stop where the renter has no defence.
The renter is eligible to claim payment for improvements and waygoing obligations, such as disturbance and reorganisation payments, generally equal to five times the yearly value of the lease, but minus reimbursement payment in respect of any uplift in the value of their property from agricultural use to growth usage.
Even where planning permission within all of the farm does not exist, there’s normally a clause inside the Lease of a protected agricultural property which permits the landlord to restart regions of earth for non-agricultural functions. Provided that the elimination of the earth won’t materially prejudice the viability of their farm these clauses are totally enforceable.
A tenant is eligible to claim reimbursement as previously but once more, there’s no right to reimbursement for any reduction in value in agricultural use to growth usage.
It can be true in the long run that agricultural tenants will qualify to share in growth uplift if property is removed in their tenancies for growth purposes.
We’ve observed routine changes in law since and it’s not likely that we’ll see any let up in the speed of laws later on.
In my opinion, protected agricultural tenancies will grow increasingly more secure to the benefit of this renter whilst tenants in predetermined length tenancies — short limited duration tenancies and contemporary limited duration tenancies — may realize that there’s more and more liberty of contract along with a much milder legislative touch.