Rebecca McGladrigan and Lindsey Wainwright outline the recently passed changes to land holding in Scotland
The much-anticipated Land Reform (Scotland) Bill was passed by the Scottish parliament on 17 March 2016. Initially tabled in July last year, the bill was heralded as a new dawn for land holding in Scotland and, while not all initial proposals have survived committee and subsequent parliamentary scrutiny, the bill, as passed, does include the following key changes to land ownership in Scotland.
Agricultural tenancies
The largest part of the bill introduces significant changes for tenant farming. It creates a new type of agricultural tenancy known as a modern limited-duration tenancy (“MLDT”), for a minimum of 10 years (subject to a possible tenant break at year five where the tenant is a new entrant), and also provides for the conversion of some existing tenancies into MLDTs. It also creates a form of repairing tenancy; these are to be for 35 years or more and require the tenant to improve the land to bring it to a state capable of being farmed.
The bill also removes the requirement for tenants to register to have a right to buy under leases created pursuant to the Agricultural Holdings (Scotland) Act 1991 (the “1991 Act”); amends 1991 Act leases in respect of rent review provisions and to accommodate the new types of tenancy; widens the class of people to whom 1991 Act leases and limited-duration tenancies can be assigned and who can succeed to a farming interest (while reducing the already limited grounds for objection to this); and provides the ability for 1991 Act tenant to relinquish their tenancy in exchange for compensation payments and for assignation in the event that the offer is not accepted.
Since the bill was passed, Scottish Land & Estates (“SLE”) – which describes itself as the “voice of land-based businesses in rural Scotland” – has announced that it has requested that senior law officers review the bill for what it has identified as potential issues with compliance with European human rights legislation. This is particularly in relation to the extension of assignation and succession rights to secure farming tenancies. SLE has indicated that if compliance cannot be confirmed, the matter should be referred to the Supreme Court for determination.
Provision in the bill is also made for compensation for tenant improvements, as well as some procedural changes including amendments to the procedure for diversification applications and reference of disputes to the Land Court and extension of the two months’ notice period for irritancy on non-payment of rent by a further two months.
Finally, the bill places an obligation on the Scottish ministers to review the legislation governing small holdings and report to the Scottish parliament by 31 March 2017.
Land rights and responsibilities
The Scottish Ministers are to prepare and publish a land rights and responsibilities statement after consultation and review every five years.
Establishment of the Scottish Land Commission (“SLC”)
The SLC commissioners have a wide remit in relation to any matter pertaining to land in Scotland, including law and policy review and recommendations. As well as four main commissioners there is to be a sole tenant farmer commissioner, who will have additional responsibilities including: working with other commissioners where their functions relate to agriculture and agricultural holdings; preparing codes of practice for agricultural holdings and dealing with alleged breaches thereof; reporting on the operation of agents of landlords and tenants of agricultural holdings; preparing recommendations for improvements to agricultural holdings; and referring to the Land Court any question of law relating to agricultural holdings.
Information on the control of land
The Scottish ministers must make regulations requiring information to be provided about persons who have a controlling interest in owners and tenants of land and that information is to be held in a public register kept by the keeper of the Registers of Scotland.
Community engagement
The Scottish ministers must issue guidance about engaging communities on decisions relating to land which may affect them.
The right to buy land for sustainable development
The bill also introduces a new register of applications by communities to buy land for the purposes of sustainable development.
Shooting and deer forests
These will no longer benefit from an exclusion from the valuation roll. Scottish National Heritage will have powers to require certain land owners and occupiers to prepare a deer management plan, and there will be increased fines for non-compliance with the Deer (Scotland) Act 1996.
Core paths
There are changes to the Land Reform (Scotland) Act 2003 introduced via the bill in respect of paths and routes designated as “core paths”. The circumstances under which an access authority may consider it appropriate to review or where the Scottish ministers require a review or revision of any core path have been amended.
One step forward
The bill has been seen as some as a missed opportunity, and what is clear is that it is not the sea-change some hoped it would be. From the introduction of the bill, headline-grabbing proposals were put forward, such as the imposition of restrictions on the extent of private land held by one landowner, or by non-EU corporates – but these potentially political proposals have not made it into the final bill.
Others, however, view it as a step in the right direction, which may open the door to more robust land reform legislation in the not too distant future.
Rebecca McGladrigan is a senior associate and Lindsey Wainwright is an associate at CMS Cameron McKenna LLP
