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Agricultural Holdings (Scotland) Act 2003

Type Act of the Scottish Parliament

Publication 2003-04-22

Last updated 2021-02-28

State In force

Jurisdiction Scotland

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

Part 1 — Agricultural tenancies

Chapter 1 — Types of tenancy

Tenancies under the 1991 Act

Effect of termination of tenancy where tenant deceased

1

(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) Act 1991 (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(3) Section 2 (leases for less than year to year) of the 1991 Act is repealed.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”.

Conversion from 1991 Act tenancy to limited duration tenancy

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Leases for grazing or mowing

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(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.

New types of tenancy

Short limited duration tenancies

4

(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

(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 landlord and 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.

Limited duration tenancies

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Chapter 2 — General provision as to new types of tenancy

New types of tenancy: general provision

Assignation, subletting and termination of short limited duration tenancies

6

(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.

Assignation and subletting of limited duration tenancies

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(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) Subject to subsection (3A), 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.

(3A) Where the tenant proposes to assign the lease to a person who is a near relative of the tenant, the only grounds on which the landlord can withhold consent to the proposed assignation are the following—

(a) that the person is not of good character,

(b) that the person does not have sufficient resources to enable the person to farm the land with reasonable efficiency,

(c) subject to subsection (3B), that the person has neither sufficient training in agriculture nor sufficient experience in the farming of land to enable the person to farm the land with reasonable efficiency.

(3B) The ground of objection in subsection (3A)(c) does not apply where the person—

(a) is engaged in or will begin, before the expiry of the period of 6 months beginning with the date of the notice under subsection (2), a course of relevant training in agriculture which the person is expected to complete satisfactorily within 4 years from that date, and

(b) has made arrangements to secure that the land is farmed with reasonable efficiency until the person completes that course.

(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.

(5A) For the purposes of subsection (3A), “near relative”, in relation to a tenant of an agricultural holding, means—

(a) a parent of the tenant,

(b) a spouse or civil partner of the tenant,

(d) a spouse or civil partner of such a child,

(e) a grandchild of the tenant,

(f) a brother or sister of the tenant,

(g) a spouse or civil partner of such a brother or sister,

(h) a child of a brother or sister of the tenant,

(i) a grandchild of a brother or sister of the tenant,

(j) a brother or sister of the tenant's spouse or civil partner,

(k) a spouse or civil partner of such a brother or sister,

(l) a child of such a brother or sister,

(m) a grandchild of such a brother or sister.

(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.

Continuation and termination of limited duration tenancies

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(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 the other.

(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 the term 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 10 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 under subsection (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 the continuation.

(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.

Review of rent under limited duration tenancies

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(A1) Where, by virtue of any provision, a review of rent due as payable under a lease constituting a limited duration tenancy , a modern limited duration tenancy or a repairing tenancy —

(a) may be initiated only by the landlord; or

(b) may only determine that the rent is to be increased,

the provision concerned is void and the rent due as payable under the lease is instead to be reviewed and determined in accordance with this section.

(1) Where a lease constituting a limited duration tenancy or a modern 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.

(1A) The rent due as payable under a lease constituting a repairing tenancy 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 executed 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.

(2) The landlord may initiate a review of the rent that is to be payable under the lease by serving a notice in writing on the tenant.

(3) The tenant may initiate such a review by serving a notice in writing on the landlord.

(4) A notice served under subsection (2) or (3) is a “rent review notice”.

Increase in rent: landlord’s improvements

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(1) Where the landlord has carried out an improvement on the land comprised in a lease constituting a limited duration tenancy , a modern limited duration tenancy or a repairing 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); ...

(c) in compliance with a direction given by the Scottish Ministers under powers conferred on them by or under any enactment, or

(d) after giving a landlord improvement notice in accordance with section 10A and—

(i) the tenant has not given notice of objection in accordance with section 10B, or

(ii) the tenant has given such notice of objection but the Land Court has approved the improvement under section 10C,

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.

Variation of rent by Land Court

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Where it appears to the Land Court, in determining any matter in relation to a limited duration tenancy , a modern limited duration tenancy or a repairing tenancy by virtue of section 13 , 16, 16A or 16B , that it is equitable that the rent payable under the lease should be varied, it may vary the rent accordingly.

Right of tenant to withhold rent

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(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 , a limited duration tenancy, a modern limited duration tenancy or a repairing 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.

(4) 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).

(5) 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 in subsection (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.

(6) 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.

(7) 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).

(8) 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.

(9) 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.

Written leases and the revision of certain leases

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(1) Where, in respect of a short limited duration tenancy, a limited duration tenancy, a modern limited duration tenancy or a repairing tenancy —

(a) there is not in force a lease in writing; or

(b) there is in force a lease in 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), section 16A or, as the case may be, section 16B,

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

(b) provision consistent with section 16, 16A or, as the case may be, 16B.

(3) If, within the period of 6 months after notice has been given under subsection (1), no such lease has been concluded, the terms of the lease may be determined by the Land Court.

(4) In such a determination, the Land Court—

(a) is to specify the terms of the existing tenancy and, in so far as those terms do not make provision for the matters mentioned in subsection (2)(a) or make provision inconsistent with those matters or with section 16 (as read with section 5(2) to (4) of the 1991 Act), section 16A or, as the case may be, section 16B, make such provision for those matters as appears to it to be reasonable; and

(b) may specify any further term of the tenancy which is—

(i) agreed between the landlord and the tenant; and

(ii) not inconsistent with any provision applying to the tenancy by virtue of this Act.

(5) Any determination of the Land Court by virtue of this section or section 16, 16A or, as the case may be, 16B has effect as if—

(a) the terms and provisions specified or made therein were contained in an agreement in writing between the landlord and the tenant; and

(b) such agreement had effect as from the date of the determination or from such later date as the determination may appoint.

(6) If it appears to the Land Court that on the date of the determination the landlord or tenant would be in breach of any term of the tenancy so specified or made, the Court is to appoint such later date as would allow the landlord or, as the case may be, tenant to remedy the breach.

Freedom of cropping and disposal of produce

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Section 7 (freedom of cropping and disposal of produce) of the 1991 Act applies to short limited duration tenancies , limited duration tenancies, modern limited duration tenancies and repairing tenancies as it does to 1991 Act tenancies, but as if—

(a) the references to the holding were references to the land;

(b) in subsection (4)—

(i) the reference to section 61(1) of that Act were a reference to section 78(1) of this Act; and

(ii) the reference to arbitration included any other method mentioned in that section of this Act (the reference to the arbiter being construed accordingly);

(i) paragraph (a); and

(ii) in paragraph (b), the words “in any other case,”,

were omitted; and

(d) in subsection (6), in paragraph (b), the reference to a direction under section 9 of the 1949 Act were omitted.

Permanent pasture

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Section 9 (arbitration as to permanent pasture) of the 1991 Act applies in relation to short limited duration tenancies , limited duration tenancies, modern limited duration tenancies and repairing tenancies as it does in relation to 1991 Act tenancies, but as if the references to the holding were references to the land.

Fixed equipment etc.

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(1) There is incorporated in every lease constituting a short limited duration tenancy or a limited duration tenancy an undertaking by the landlord that the landlord will—

(a) within 6 months of the commencement of the tenancy or, where that is not reasonably practicable by virtue of any obligation on the landlord under any other enactment, as soon as reasonably practicable thereafter—

(i) provide such fixed equipment as will enable the tenant to maintain efficient production as respects the use of the land as specified in the lease; and

(ii) put the fixed equipment so provided into the condition specified in the schedule of fixed equipment that is required by virtue of subsection (2); and

(b) during the tenancy, effect such renewal or replacement of the fixed equipment so provided as may be rendered necessary by natural decay or by fair wear and tear.

(2) Where a lease constituting a short limited duration tenancy or a limited duration tenancy is entered into and fixed equipment is comprised in the lease, the parties must agree in writing a schedule of fixed equipment specifying—

(a) the fixed equipment which the landlord will provide in terms of subsection (1)(a); and

(b) the condition of the fixed equipment,

and on being so agreed (or, failing such agreement, on being determined in accordance with section 77 or 78 of this Act) the schedule of fixed equipment is deemed to form part of the lease.

(3) If at any time after the commencement of the tenancy the fixed equipment or its condition is varied, the landlord and tenant may agree to amend the schedule of fixed equipment accordingly or to substitute for it a new schedule.

(4) There is also incorporated in every such lease a provision that the liability of the tenant in relation to the maintenance of fixed equipment extends only to a liability to maintain the fixed equipment specified in the schedule of fixed equipment in as good a state of repair (natural decay and fair wear and tear excepted) as it was in—

(a) immediately after it was put into the condition specified in the schedule of fixed equipment; or

(b) in the case of equipment improved, provided, renewed or replaced, during the tenancy, immediately after it was so improved, provided, renewed or replaced.

(5) The cost of making and agreeing the schedule of fixed equipment under this section must, unless otherwise agreed, be borne by the landlord and tenant in equal shares.

(6) Any agreement between the landlord and tenant which purports to provide for the tenant to bear any expense of any work which the landlord is required to execute in order to fulfil the landlord’s obligations under the lease is of no effect.

(7) Any term of a lease constituting a short limited duration tenancy or a limited duration tenancy that requires the tenant to pay the whole or any part of the premium due under a fire insurance policy over any fixed equipment on the land is of no effect.

Resumption of land by landlord

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(1) The landlord may resume the land or any part of the land comprised in a lease constituting a short limited duration tenancy or , a limited duration tenancy or a modern limited duration tenancy if (and only if)—

(a) the resumption is for a non-agricultural purpose in respect of which permission requires to be obtained, and has been obtained, under the enactments relating to town and country planning by—

(i) in the case of a short limited duration tenancy, any person (including the tenant);

(ii) in the case of a limited duration tenancy or a modern limited duration tenancy , any person apart from the tenant;

(b) the lease does not expressly prohibit resumption for that purpose; and

(2) The landlord must give the tenant notice of any intention of the landlord so to resume any land; and the notice must—

(a) be in writing;

(b) be given not less than 1 year before the date on which the resumption is to take place; and

(3) Where notice is given under subsection (2) for resumption of part of the land, the tenant may, within 28 days after—

(a) the giving of the notice; or

(b) the determination of any matter arising from the notice,

whichever is the later, terminate the tenancy by giving notice in writing to the landlord; and the termination takes effect on the date specified under subsection (2)(c).

(4) Where the landlord resumes part of the land under this section, the tenant is entitled to a reduction in rent—

(a) of an amount proportionate to that part; and

(b) of an amount in respect of any depreciation of the value to the tenant of the remainder of the land caused by the resumption of the part or any use made of the part,

but where paragraph (a) applies, in determining the amount of the reduction, account is to be taken of any benefit or relief allowed to the tenant under the lease in respect of the part resumed.

(5) Where—

(a) part of the land has been resumed under this section for a purpose mentioned in paragraph (f) (which specifies certain forms of mineral exploitation) of subsection (2) of section 29 of the 1991 Act (that paragraph applying for the purposes of this subsection as it does for the purposes of that section); and

(b) the land which formed that part has subsequently been made suitable for, and is available for, agricultural use,

that land is, if the conditions in subsection (6) are fulfilled, to be restored to the tenancy.

(6) The conditions are that—

(a) the tenancy continues in effect with the same landlord and tenant under the lease; and

(b) any compensation paid to the tenant in consequence of the resumption was calculated on the basis that the land would be restored under subsection (5).

Irritancy of lease and good husbandry

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(1) Without prejudice to any rule of law, it is for the landlord and tenant to provide in the lease constituting a short limited duration tenancy or a limited duration tenancy what grounds there are for irritancy of the lease.

(2) Any term of such a lease or of an agreement in connection with the lease that provides for the lease to be irritated solely on the grounds that the tenant is not or has not been resident on the land is of no effect.

(2A) Where such a lease may be irritated on the grounds that the rent is due and unpaid, notice as mentioned in subsection (7) may not be given unless—

(a) the landlord has given the tenant a demand in writing requiring the tenant to pay the rent due before the expiry of the period of 2 months beginning with the date of the demand, and

(b) the demand has not been complied with.

(3) Where such a lease may be irritated on the grounds that the tenant is not using the land in accordance with the rules of good husbandry, what is good husbandry is to be construed, subject to subsections (4) and (5), by reference to the Sixth Schedule to the Agriculture (Scotland) Act 1948 (c. 45).

(4) Conservation activities are to be treated as being in accordance with the rules of good husbandry if they are carried out in accordance with—

(a) an agreement entered into under any enactment by the tenant; or

(b) the conditions of—

(i) any grant for the purpose of such activities paid out of the Scottish Consolidated Fund; or

(ii) such other grant of a public nature as the Scottish Ministers may by order specify.

(5) In the case of limited duration tenancies, such use of any of the land, or such change to the land, for a non-agricultural purpose as has been permitted under section 40 or 41 is to be treated as being in accordance with the rules of good husbandry.

(6) The landlord may not enforce any right to remove the tenant on grounds of irritancy unless notice as mentioned in subsection (7) is given.

(7) The landlord must give the tenant notice in writing of any intention of the landlord so to remove the tenant not less than 2 months before the date on which the tenant is to be removed.

Resumption and irritancy: supplementary

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Any provision of this Act as to the termination of a short limited duration tenancy , a limited duration tenancy, a modern limited duration tenancy or a repairing tenancy does not affect any right of the landlord to—

(a) resume land under section 17 or 17A ; or

(b) remove a tenant—

(i) whose estate has been sequestrated; or

(ii) who for any reason has incurred irritancy of the lease or other liability to be removed.

Succession to short limited duration tenancies and limited duration tenancies

Section 16 of the Succession (Scotland) Act 1964

20

In section 16 (provisions relating to leases) of the Succession (Scotland) Act 1964 (c. 41) (in sections 21 to 23 referred to as “the 1964 Act”), after subsection (4) there is inserted—

(4A) Where an interest, being an interest under a lease constituting a short limited duration tenancy or a limited duration tenancy— (a) is not the subject of a valid bequest by the deceased; or (b) is the subject of such a bequest, but the bequest is not accepted by the legatee; or (c) is the subject of such a bequest, but the bequest is declared null and void by virtue of section 21 of the 2003 Act, and there is among the conditions of the lease (whether expressly or by implication) a condition prohibiting assignation of the interest, the executor shall be entitled, notwithstanding that condition, to transfer the interest to a person to whom subsection (4B) below applies; and the executor shall be entitled so to transfer the interest without the consent of the landlord. (4B) This subsection applies to— (a) any one of the persons entitled to succeed to the deceased’s intestate estate, or to claim legal rights or the prior rights of a surviving spouse out of the estate, in or towards satisfaction of that person’s entitlement or claim; or (b) any other person. (4C) In the case of any interest under a lease constituting a short limited duration tenancy or a limited duration tenancy— (a) if at any time the executor is satisfied that the interest cannot be disposed of according to law and so informs the landlord, the executor may terminate the tenancy (in so far as it relates to the interest); and (b) if the interest is not so disposed of within the period referred to in subsection (4D) below, the lease shall (in so far as it relates to the interest) terminate at the expiry of the period, notwithstanding any provision in the lease, or any enactment or rule of law, to the contrary effect. (4D) The period is one year or such longer period as may be fixed by agreement or, failing agreement, by the Land Court on the application of the executor— (a) in the case of an interest which is the subject of an application to that court by virtue of section 21 of the 2003 Act, from the date of the determination or withdrawal of the application; and (b) in any other case, from the date of death of the deceased. (4E) The— (a) interest may be transferred under subsections (4A) and (4B) above; or (b) tenancy may be terminated under subsection (4C)(a) above, only if the transfer, or as the case may be, termination is in the best interests of the deceased’s estate.

Bequest of lease

21

(1) Subject to subsections (2) and (3), the tenant of a short limited duration tenancy , a limited duration tenancy, a modern limited duration tenancy or a repairing tenancy may, by will or other testamentary writing, bequeath the lease constituting the tenancy to any one of the persons mentioned in subsection (1A) .

(1A) The persons referred to in subsection (1) are—

(a) any person who would be, or would in any circumstances have been, entitled to succeed to the tenant's estate on intestacy by virtue of the Succession (Scotland) Act 1964,

(b) a spouse or civil partner of a child of the tenant,

(d) a spouse or civil partner of a brother or sister of the tenant,

(e) a brother or sister of the tenant's spouse or civil partner,

(f) a spouse or civil partner of such a brother or sister,

(g) a child (including a step-child) of such a brother or sister,

(h) a grandchild (including a step-grandchild) of such a brother or sister,

(i) a step-child of the tenant,

(j) a spouse or civil partner of such a step-child,

(k) a descendant of such a step-child,

(l) a step-brother or step-sister of the tenant,

(m) a spouse or civil partner of such a step-brother or step-sister,

(n) a descendant of such a step-brother or step-sister.

(2) Sections 11(2) and (3), 12A, 12B and 12C(1) and (2) of the 1991 Act apply in relation to subsection (1) as they do in relation to section 11(1), subject to the following modifications—

(a) in section 11(2), the words “of a holding” and “of the holding” are omitted,

(b) in section 12A, in subsections (3)(b) and (c) and (4)(b), for “holding” substitute “ land comprised in the lease ”,

(3) If the person to whom the lease is so bequeathed does not accept the bequest, or if the bequest is declared null and void by virtue of subsection (2), the right to the lease is, subject to section 16(4A) to (4E) of the 1964 Act, to be treated as intestate estate of the deceased in accordance with Part I of that Act.

Right of landlord to object to acquirer of tenancy

22

(1) A person to whom a lease constituting a short limited duration tenancy , a limited duration tenancy, a modern limited duration tenancy or a repairing tenancy is transferred under section 16 (provisions relating to leases) of the 1964 Act must give notice of the transfer to the landlord within 21 days of the transfer or (where that is not possible) as soon as practicable thereafter; and the lease is, subject to subsections (2) and (3), binding on the landlord and that person as landlord and tenant respectively as from the date of the transfer if such notice is given.

(2) Sections 12A, 12B and 12C(1), (2) and (5) of the 1991 Act apply in relation to subsection (1) as they do in relation to section 12(1), subject to the following modifications—

(a) in section 12A—

(i) in subsection (2), the reference to notice given under section 12(1) is to be read as a reference to notice given under subsection (1),

(ii) in subsections (3)(b) and (c) and (4)(b), for “holding” substitute “ land comprised in the lease ”,

(b) in section 12B(2), the reference to notice given under section 12(1) is to be read as a reference to notice given under subsection (1),

(3) Where a lease constituting a short limited duration tenancy , a limited duration tenancy, a modern limited duration tenancy or a repairing tenancy is transferred to a person under subsections (4A) and (4B)(b) of section 16 of the 1964 Act, the landlord is entitled to acquire the person’s interest in the lease provided that—

(a) the landlord gives the person notice—

(i) in writing; and

(ii) within 30 days of the giving of the notice under subsection (1),

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 person than any reasonable terms upon which the lease was transferred to the person.

Effect of termination of tenancy where tenant deceased

23

Termination of a short limited duration tenancy , a limited duration tenancy, a modern limited duration tenancy or a repairing tenancy by virtue of—

(a) section 16 of the 1964 Act; or

(b) section 22,

is to be treated, for the purposes of any compensation payable under this Act, as termination at the expiry of the term of the tenancy.

Part 2 — Tenant’s right to buy land

Registration of interest and the right to buy

The Keeper and the Register

24

(1) For the purposes of this Part, “the Keeper” is the person who keeps the Register of Community Interests in Land (in this Part referred to as “the Register”) under section 36 (Register of Community Interests in Land) of the Land Reform (Scotland) Act 2003 (asp 2).

(2) The Keeper is to keep the Register so that there is contained in it a part for registering tenants' interests in acquiring land in accordance with section 25.

(3) There is to be included in that part of the Register—

(a) a record of any notice or notification sent to the Keeper under any provision of this Part; and

(b) where a registration of a tenant’s interest in acquiring land is removed under section 25(15), an entry specifying the date on which that is effected.

Registration of tenant’s interest

25

(1) A tenant of a 1991 Act tenancy may apply to have registered an interest in acquiring the land comprised in the lease by sending a notice (in this section referred to as a “notice of interest”) to the Keeper.

(2) For the purposes of this Part, “tenant”—

(a) where there are two or more tenants under the lease, means those tenants; and

(b) does not include a sub-tenant.

(3) The notice of interest must be in such form as the Scottish Ministers may prescribe by regulations and must specify—

(a) the particulars of the tenant and the owner of the land;

(b) where there are two or more tenants under the lease, the fact that each of them consents to the making of the application to register their interest in acquiring the land;

(d) any interest or rights comprised in the land (including any sporting or mineral rights); and

(e) such other information as the Scottish Ministers may so prescribe.

(4) The tenant must send a copy of the notice of interest to the owner of the land and notify the Keeper that the copy has been so sent.

(5) On receipt of the notice of interest, the Keeper must—

(a) register—

(i) the tenant’s interest in acquiring the land;

(ii) the details specified in the notice of interest; and

(iii) the date of registration; and

(b) send an extract of the registration to the tenant and the owner of the land.

(6) Where the registration relates to land over which there is a standard security, the owner, on receipt of the extract, must—

(a) intimate that fact to the tenant; and

(b) send a copy of the extract to the creditor in the standard security.

(7) The Keeper may charge such reasonable fee for—

(a) registering tenants' interests in acquiring land; and

(b) providing extracts, and copy extracts, of registration,

as the Scottish Ministers may by order specify.

(8) If the owner of the land disputes any matter contained in the extract of registration, the owner may, by notice in writing to the Keeper, challenge the registration of the tenant’s interest in acquiring the land on the grounds that any matter contained in the extract is inaccurate.

(9) On receipt of notice under subsection (8), the Keeper is to make such enquiry in connection with the tenant’s interest in acquiring the land as the Keeper considers appropriate; and following such an enquiry, if the Keeper considers that the notice of interest is inaccurate, the Keeper—

(a) must, if the inaccuracy is material, rescind the registration of the tenant’s interest; and

(b) may, if the inaccuracy is not material, amend that registration.

(10) Where, under subsection (9)—

(a) the registration of the tenant’s interest in acquiring the land is rescinded, the Keeper must intimate that fact to the tenant and the owner of the land; and

(b) that registration is amended, the Keeper must send an extract of the registration to the tenant and the owner of the land.

(11) The tenant or the owner of the land may appeal to the Land Court against any decision made, following notice under subsection (8), by the Keeper in respect of the registration of the tenant’s interest in acquiring the land; and in an appeal under this subsection the Court may make such order as it considers appropriate.

(12) A registration of a tenant’s interest in acquiring land—

(a) continues to have effect only in relation to such land as remains comprised in the tenancy; and

(b) ceases to have effect—

(i) if the registration is rescinded;

(ii) if the tenancy is terminated; or

(iii) where neither of those things has occurred, at the expiry of the period of five years from the date of registration.

(13) Where—

(a) the tenancy is terminated during that period; or,

(b) there is a reduction in the land comprised in the tenancy,

the landlord must give notice in writing of that fact to the Keeper.

(14) Where a tenant’s interest in acquiring land is, or has been, registered, the tenant may at any time apply to have the interest registered again (with or without modification to the matters specified in the notice of interest).

(15) The Keeper must remove from the Register any registration of a tenant’s interest in acquiring land which no longer has effect.

Notice of proposal to transfer land

26

(1) Where the owner of land in respect of which a tenant’s interest in acquiring land is registered under section 25 or a creditor in a standard security with a right to sell the land proposes to transfer the land or any part of it to another person, the owner or, as the case may be, the creditor must, subject to section 27—

(a) give notice in writing of that fact to the tenant; and

(b) send a copy of the notice to the Keeper.

(2) Notice under subsection (1) must be given in accordance with such provisions (including provisions as to the form of the notice) as the Scottish Ministers may prescribe by regulations.

Transfers not requiring notice

27

(1) Notice is not required under section 26 where the transfer is or, as the case may be, would be—

(a) otherwise than for value;

(b) in implement or pursuance of an order of a court (other than an order under section 24 of the Conveyancing and Feudal Reform (Scotland) Act 1970 (c. 35) or a decree in an action for the division and sale of land);

(c) between spouses in pursuance of an arrangement between them entered into at any time after they have ceased living together;

(d) of croft land to the crofter tenanting it;

(e) between companies in the same group;

(f) to a statutory undertaker for the purpose of carrying on the undertaking;

(g) a transfer—

(i) implementing the compulsory acquisition of land under any enactment;

(ii) by agreement, of land which could have been acquired compulsorily under any enactment;

(iii) implementing any right conferred by Part 2 (which provides for the community right to buy) of the Land Reform (Scotland) Act 2003 (asp 2) to buy land;

(iv) implementing any right conferred by Part 3 (which provides for the crofting community right to buy) of that Act to buy eligible land within the meaning of that Part of that Act;

(v) implementing missives for the sale and purchase of land concluded, or an option to acquire land which existed on a date on which no notice of interest in acquiring the land was registered under section 25;

(vi) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(vii) which requires, or which but for the provisions of section 14 of that Act would require, the consent of the Scottish Ministers under subsection (5) or (7) of section 12 of that Act;

(viii) by a registered social landlord (within the meaning of the Housing (Scotland) Act 2010 (asp 17) ) in pursuance of the power conferred by section 107 of that Act;

(ix) vesting the land in a person for the purposes of any enactment relating to sequestration, bankruptcy, winding up or incapacity or to the purposes for which judicial factors may be appointed; or

(h) a transfer of land in consequence of—

(i) the assumption or resignation or death of one or more of the partners in a partnership; or

(ii) the assumption or resignation or death of one or more of the trustees of a trust.

(2) In the case of a transfer mentioned in any of paragraphs (a), (e) and (h) of subsection (1), if the transfer—

(a) is or forms part of a scheme or arrangement or is one of a series of transfers; and

(b) the main purpose or effect, or one of the main purposes or effects, of the scheme, arrangement or, as the case may be, series is the avoidance of the requirements or consequences of this Part,

the transfer is, for the purposes of section 28, deemed to be a transfer in respect of which notice is required under section 26.

(3) For the purposes of subsection (1)(e), companies are in the same group if they are, or are included in a number of, companies which, by virtue of section 170 of the Taxation of Chargeable Gains Act 1992 (c. 12), together form a group for the purposes of sections 171 to 181 of that Act.

(4) In subsection (1)(f), “statutory undertaker” is to be construed in accordance with section 214 of the Town and Country Planning (Scotland) Act 1997 (c. 8).

(5) The Scottish Ministers may by order modify (any or all) subsections (1) to (4).

Right to buy

28

(1) Where a tenant’s interest in acquiring land is for the time being registered under section 25 and—

(a) the owner of the land or a creditor in a standard security with a right to sell the land, gives notice to the tenant under section 26 of a proposal to transfer the land or any part of it; or

(b) the owner or the creditor takes any action with a view to the transfer of the land or any part of it and—

(i) the transfer is a transfer in respect of which notice to the tenant is required under section 26; and

(ii) such notice has not been given,

the tenant has the right to buy the land to which the transfer relates (including any interest or rights comprised in the land) from the owner or, as the case may be, the creditor.

(2) Where—

(a) a tenant has a right to buy land under subsection (1); and

(b) despite the existence of that right, the owner, or as the case may be, the creditor transfers the land to a person other than the tenant,

the tenant has the right to buy the land (including any interests or rights comprised in the land) from the person to whom the land is transferred or is subsequently transferred.

(3) For the purposes of subsection (1)(b), action is taken with a view to a transfer of land when—

(a) the land is, by or with the authority of the owner of the land or a creditor in a standard security with a right to sell the land, advertised or otherwise exposed for sale;

(b) the owner or the creditor, or a person acting on behalf of the owner or the creditor, enters into negotiations with another person with a view to the transfer of the land; or

(c) the owner or the creditor, or a person acting on behalf of the owner or the creditor, proceeds further with any proposed transfer of the land which was initiated prior to the date on which the notice of interest was registered.

(4) References in subsection (3) to the owner of land include references to the person in whom it has vested for the purposes of any such enactment as is mentioned in section 27(1)(g)(ix).

(5) The Scottish Ministers may by order modify (either or both) subsections (3) and (4).

Exercise of right to buy

29

(1) Where a tenant has a right to buy land under section 28(1), the tenant may proceed in accordance with section 32 to buy the land from the owner or, as the case may be, the creditor provided that notice is given under subsection (2).

(2) Notice is given under this subsection if the tenant, within 28 days of receipt of the notice under section 26, gives notice to the owner or, as the case may be, the creditor that the tenant intends to buy the land.

(3) Where a tenant has a right to buy under section 28(2), the tenant may proceed in accordance with section 32 to buy the land from the person to whom the land has been transferred or subsequently transferred provided that notice is given under subsection (4).

(4) Notice is given under this subsection if—

(a) the tenant gives notice to that person that the tenant intends to buy the land; and

(b) the notice is given within three years from the transfer to that person,

and the tenancy is in force on the date on which the notice is given.

(5) If, at any time, the tenant does not intend to proceed, in accordance with section 32, to buy the land, the tenant is to give notice of that fact to the person from whom the land would otherwise have been bought.

(6) Where the tenant—

(a) does not give notice in accordance with subsection (2) or, as the case may be, (4); or

(b) gives notice under subsection (5),

the right to buy is extinguished.

(7) A tenant giving any notice under this section must send a copy of the notice to the Keeper.

Meaning of “creditor in a standard security with a right to sell land”

30

Any reference in this Part to a creditor in a standard security with a right to sell land is a reference to a creditor who has such a right under—

(a) section 20(2) or 23(2) of the Conveyancing and Feudal Reform (Scotland) Act 1970 (c. 35); or

(b) a warrant granted under section 24(1) of that Act.

Effect of extinguishing of right to buy

31

Where a right to buy land is extinguished under section 29(6) or 32(8), the tenant may acquire a subsequent right to buy the same land or any part of it under section 28(1), but only if—

(a) the period of 12 months from the extinguishing of the right to buy has expired; or

(b) before that period has expired—

(i) the land is transferred to another person; and

(ii) that person requires to give notice under section 26 in relation to a subsequent transfer.

Procedure for buying and valuation

Procedure for buying

32

(1) It is for the tenant to make the offer to buy in exercise of the tenant’s right to buy under section 28.

(2) The offer is to be at a price—

(a) agreed between the tenant and the person from whom the land is to be bought (“the seller”); or

(b) where there is no such agreement—

(i) payable by the tenant in accordance with section 34(8); or

(ii) if the price is determined in an appeal under section 37, as is so determined,

and must specify the date of entry and of payment of the price in accordance with subsection (3).

(3) The date of entry and of payment of the price are to be—

(a) a date not later than 6 months from the date when the tenant gave notice under section 29(2) or (4) of the tenant’s intention to buy;

(b) where the price payable by the tenant is the subject of an appeal under section 37 which has not, within the period of 4 months after the date when the tenant gave such notice, been—

(i) determined; or

(ii) abandoned following agreement between the tenant and the seller,

a date not later than 2 months after the appeal is so determined or, as the case may be, abandoned; or

(4) The offer may include such other reasonable conditions as are necessary or expedient to secure the efficient progress and completion of the transfer.

(5) If the tenant has not, within the period fixed by or agreed under subsection (3), done any of the things mentioned in subsection (6), the seller may apply to the Land Court for an order under subsection (7).

(6) The things are—

(a) concluding missives with the seller for the sale of the land to the tenant; or

(b) if the tenant has not so concluded missives, taking all steps which the tenant could reasonably have taken in the time available towards so concluding missives.

(7) An order under this subsection may—

(a) direct the tenant—

(i) to conclude missives with the seller within such period; and

(ii) to take such remedial action for the purpose of so concluding missives; and

(b) direct the tenant and seller to incorporate into the missives any term or condition in respect of the sale of the land,

as the order may specify.

(8) If—

(a) the tenant fails to comply with an order under subsection (7); or

(b) where the seller has not applied for an order under that subsection, the tenant has not (having regard to the period fixed by or agreed under subsection (3)) within a reasonable period from the acquiring by the tenant of the right to buy otherwise concluded missives with the seller for the sale of the land to the tenant,

the right to buy is extinguished.

Appointment of valuer

33

(1) Where the price is not agreed between the seller and the tenant, the land is, except where subsection (2) applies, to be valued by a valuer appointed by agreement between the seller and the tenant or by a person nominated by them.

(2) This subsection applies where the land in respect of which the tenant is exercising a right to buy forms part of an estate comprising other land in respect of which any other tenant has given notice under section 29(2) or (4) of the tenant’s intention to buy.

(3) Where subsection (2) applies, the land mentioned in that subsection is to be valued by a valuer appointed by agreement between—

(a) the seller; and

(b) at least half of the tenants mentioned in that subsection,

or by a person nominated by them.

(4) Where there is no agreement as to the appointment of a valuer under subsection (1) or (3), the valuer is to be appointed by the Land Court or by a person nominated by the Court.

(5) In this Part, “valuer” includes two valuers with an oversman.

Valuation of the land

34

(1) The valuer appointed under section 33 is to assess the value of the land in respect of which the right to buy is being exercised as at the date of notice under section 26 of the seller’s proposal to transfer the land.

(2) The valuer is to assess the value of the land—

(a) having regard to the value that would be likely to be agreed between a reasonable seller and buyer of such land—

(i) assuming that the seller and buyer are, as respects the transaction, willing; and

(ii) where the buyer is a sitting tenant;

(b) taking account, in so far as a seller and a buyer of the land (assuming that they are, as respects the transaction, willing) would do so, of any factor attributable to the known existence of a person who (not being the tenant who is exercising a right to buy the land) would be willing to buy the land at a price higher than other persons because of a characteristic of the land which relates peculiarly to that person’s interest in buying it;

(c) taking account of when the seller would in the normal course of events have been likely to recover vacant possession of the land from the tenant;

(d) taking account of the terms and conditions of any lease of sporting interests affecting the land;

(e) taking account of any moveable property belonging to the owner of the land which is, by agreement between the tenant and the owner, to be—

(i) sold with; and

(ii) valued along with,

the land;

(f) taking no account of—

(i) the absence of the period of time during which the land would, on the open market, be likely to be advertised and exposed for sale; or

(ii) any factor attributable to any use of the land which is or would be unlawful;

(g) taking no account of any increase in the value of the land resulting from improvements carried out at the expense of the tenant;

(h) taking no account of any increase in the value of the land resulting from the use of any of the land, or changes to the land, for a purpose that is not an agricultural purpose or the carrying out of conservation activities on the land;

(i) taking no account of—

(i) any reduction in the 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

(ii) any such reduction resulting from the use of any of the land, or changes to the land, for a purpose that is not an agricultural purpose or the carrying out of conservation activities on the land; and

(j) taking no account of any fixed equipment owned by the tenant.

(3) For the purposes of subsection (2)(g)—

(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 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 executed at the tenant’s expense.

(4) Where land in respect of which the right to buy is being exercised forms part of an estate, the valuer is, in addition to assessing the value of the land under subsection (2), to assess the value representing the difference between—

(a) the value of the estate were the estate being sold by the seller to a person other than the tenant; and

(b) the value of the remainder of the estate (that is to say, the estate less the land in respect of which the right to buy is being exercised) were the remainder being sold by the seller to such a person.

(5) For the purpose of valuation under subsection (4), where two or more parts of an estate are being bought in exercise of a right to buy under this Part, the valuer may apportion to each such part of the estate (or re-apportion if for any reason the sale of any such part does not proceed) such amount representing the reduction in the value of the estate as the valuer considers equitable.

(6) The Scottish Ministers may issue guidance (either generally or in respect of a particular class of case) for the purposes of valuation under this section.

(7) An estate is to be treated, for the purposes of subsections (4) and (5), as comprising—

(a) any land forming part of the estate and which is being bought in exercise of a right to buy under this Part; and

(b) any other land forming part of the estate offered for sale by the seller at the same time as the land mentioned in paragraph (a).

(8) For the purposes of section 32(2)(b)(i), the price payable by a tenant is—

(a) the value assessed under subsection (2); or

(b) where the land forms part of an estate, the greater of the values assessed under—

(i) that subsection; and

(ii) subsection (4).

Special provision where buyer is general partner in limited partnership

35

Where the person exercising a right to buy under section 28 is doing so by virtue of section 72(2)—

(a) the valuer, in assessing the value of the land under subsection (2) of section 34, is to have regard to—

(i) the fact that the buyer is a general partner of a limited partnership; and

(ii) any provision of the partnership agreement entitling a limited partner to dissolve the partnership; and

(b) paragraph (a)(ii) of that subsection is of no effect.

Valuation etc.: further provision

36

(1) The valuer is—

(a) to invite—

(i) the seller and the tenant; and

(ii) where the land forms part of an estate, any other person the valuer considers to have an interest in the estate,

to make written representations about the matters mentioned in subsection (2); and

(b) to have regard to any such representations.

(2) The matters are—

(a) the valuation of the land; and

(b) where the land forms part of an estate, any valuation of the estate (and any apportionment of a reduction in the value of the estate),

under section 34.

(3) The valuer may—

(a) enter onto land; and

(b) make any reasonable request of the seller and tenant,

for the purposes of any assessment under section 34.

(4) The valuer must, within 6 weeks of being appointed, send to the seller and the tenant a notice in writing specifying the price payable by the tenant under section 34(8) and setting out how the price was calculated.

(5) The expenses of the valuer accrued in carrying out the valuer’s functions under section 34 and this section are to be—

(a) met by the tenant; or

(b) where subsection (2) of section 33 applies, shared equally between the tenants mentioned in that subsection.

(6) Where—

(a) the Land Court has made an order under section 32(7);

(b) the tenant to whom the order applies has complied with the order; and

the seller is liable to the tenant for any expenses met by the tenant by virtue of subsection (5).

(7) The Scottish Ministers may by regulations make further provision for or in connection with the matters provided for in this section and sections 33 and 34.

Appeal to Lands Tribunal against valuation

37

(1) The seller or the tenant may appeal to the Lands Tribunal against the valuation carried out under section 34.

(2) An appeal under this section must state the grounds on which it is being made and must be lodged within 21 days of the date of the notice under section 36(4).

(3) In an appeal under this section, the Lands Tribunal may—

(a) reassess any value of the land (and any factor affecting the value) or of an estate (and how any reduction in the value of an estate is to be apportioned); and

(b) for the purposes of section 32(2)(b)(ii), determine the price.

(4) The valuer whose valuation is appealed against may be a witness in the appeal proceedings.

(5) In the appeal proceedings, in addition to the seller and the tenant, the following persons are entitled to be heard—

(a) where the seller is—

(i) a creditor in a standard security, the owner of the land; and

(ii) the owner of the land, any creditor in a standard security over the land or any part of it; and

(b) where the land forms part of an estate—

(i) any creditor in a standard security over; and

(ii) any tenant of,

any other land forming part of the estate.

(6) The Lands Tribunal is to give reasons for its decision on an appeal under this section and is to issue a written statement of these reasons.

(7) The decision of the Lands Tribunal in an appeal under this section is final.

(8) In this section and section 38, “the Lands Tribunal” means the Lands Tribunal for Scotland.

Referral of certain matters by Lands Tribunal to Land Court

38

Where, in an appeal before the Lands Tribunal under section 37, an issue of law arises which may competently be determined by the Land Court by virtue of the 1991 Act or this Act, the Tribunal is to refer the issue to the Land Court for determination unless the Tribunal considers that it is not appropriate to do so.

Part 3 — Use of agricultural land: diversification

Use of land for non-agricultural purposes

39

(1) A—

(a) 1991 Act tenancy; ...

(b) tenancy under a lease constituting a limited duration tenancy,

(d) tenancy under a lease constituting a repairing tenancy,

does not cease to be such a tenancy by reason only that the land is used for a non-agricultural purpose.

(2) Any term of the lease which prohibits the use of the land for a non-agricultural purpose is of no effect.

(3) Where—

(a) subletting the land is prohibited (by the lease or otherwise); and

(b) that prohibition impedes the use of the land for a non-agricultural purpose,

the tenant may, despite the prohibition, sublet the land provided that the purpose for which it is sublet is ancillary to the tenant’s use of the land for the non-agricultural purpose.

(4) Subsections (1) to (3) do not apply if the use of the land for a non-agricultural purpose is otherwise than has been permitted under section 40 or 41.

(5) In this section and sections 40 and 41, any reference to the land is a reference to the whole of the land comprised in the lease constituting the tenancy or any part of it.

Notice of and objection to diversification

40

(1) A tenant under a tenancy mentioned in section 39(1) who intends to use the land for a non-agricultural purpose must send a notice (in this section and in sections 40A and 41 referred to as a “notice of diversification”) to the landlord.

(2) The notice of diversification must be given in writing not less than 70 days before the date on which the tenant proposes to commence using the land for that purpose and must specify—

(a) what the non-agricultural purpose is;

(b) the land that would be used for that purpose;

(d) the date on which the tenant proposes to commence using the land for that purpose,

and must address such matters as may constitute any ground of objection mentioned in subsection (9)(a)(i) to (iii).

(3) Where—

(a) the tenant proposes to effect changes to the land for the non-agricultural purpose; or

(b) the tenant’s intended use of the land for that purpose is in furtherance of a business,

the notice must also specify how the changes are, or, as the case may be, the business is (so far as relating to the land), to be financed and managed.

(4) Where a notice of diversification is given in accordance with subsections (2) and (3), and the landlord does not object to the notice, the land may be used—

(a) for the purpose specified under paragraph (a), and as specified under paragraphs (b) and (c), of subsection (2); and

(b) from the appointed date,

subject to any conditions imposed under subsection (10).

(5) For the purposes of subsection (4)(b), the appointed date is—

(a) the date specified under subsection (2)(d);

(b) where the landlord has made a request for information under subsection (6), the date falling 70 days from the making of the request, if later than the date so specified,

(5A) Where the landlord objects to the notice of diversification, the land may be used for the purpose specified under paragraph (a), and as specified under paragraphs (b) and (c), of subsection (2)—

(a) only if—

(i) the landlord withdraws the objection,

(ii) the landlord does not apply under section 40A for a determination in relation to the objection, or

(iii) such an application having been made, the Land Court determines under section 41 that the objection is unreasonable,

(b) from the relevant date, and

(i) by the landlord under subsection (14), or

(ii) by the Land Court under section 41(2) or (3).

(5B) For the purposes of subsection (5A)(b), the relevant date is—

(a) where no application is made under section 40A—

(i) the date specified under subsection (2)(d),

(ii) if the objection is withdrawn, the date of the withdrawal,

(iii) the date the period mentioned in section 40A(3) expires,

whichever is the later,

(b) where an application is made under section 40A, the date fixed by the Land Court under section 41(1)(b)(ii).

(6) The landlord may, on one occasion within 30 days of the giving of the notice of diversification, request the tenant to provide the landlord with relevant information.

(7) For the purposes of subsection (6), information is relevant if it—

(a) relates to—

(i) the intended use of the land for the non-agricultural purpose (including any proposed changes to the land); and

(ii) where the intended use of the land is in furtherance of a business, the finance or management of the business; and

(b) is necessary for the landlord’s consideration of whether or not there are grounds under subsection (9)(a)(i) to (iii) or (b) for objection to the notice of diversification.

(8) The tenant is to provide any information reasonably requested under subsection (6) within 30 days of the date on which it was requested.

(9) The landlord may object to the notice of diversification if (and only if)—

(a) the landlord reasonably considers that the intended use of the land for the non-agricultural purpose (including any proposed changes to the land) would—

(i) lessen significantly the amenity of the land or the surrounding area;

(ii) substantially prejudice the use of the land for agricultural purposes in the future;

(iii) be detrimental to the sound management of the estate of which the land consists or forms part; or

(iv) cause the landlord to suffer undue hardship;

(b) where the notice specifies a matter mentioned in subsection (3), the landlord reasonably considers that it fails to demonstrate that the proposed changes are, or, as the case may be, the business (so far as relating to the land) is, viable; or

(10) Where the landlord does not object to the notice of diversification, the landlord may impose on the tenant any reasonable conditions in relation to the use of the land for the non-agricultural purpose (including in relation to any proposed changes to the land).

(11) The landlord is, within the period mentioned in subsection (12), to notify the tenant in writing—

(a) of any objection to the notice of diversification (and the grounds for the objection) or, as the case may be, of the fact that the landlord does not object to the notice; and

(b) where the landlord does not object to the notice, of any conditions imposed under subsection (10) (and the reasons for imposing them).

(12) The period is—

(a) where the landlord has made a request for information under subsection (6), 60 days from the making of the request,

(b) where the landlord has made no such request, 60 days from the giving of the notice of diversification.

(13) If no notification is given in accordance with subsections (11) and (12), the landlord is, except where the non-agricultural purpose is the planting and cropping of trees, deemed not to have objected to the notice of diversification nor to have imposed any conditions in relation to use of, or changes to, the land.

(14) Where the landlord withdraws the objection under subsection (9) before the expiry of the period mentioned in section 40A(3), the landlord—

(a) must notify the tenant in writing of the withdrawal, and

(b) may impose any conditions as mentioned in subsection (10) and, where such conditions are imposed, must, at the same time as notifying the tenant of the withdrawal of the objection, notify the tenant in writing of the conditions (and the reasons for imposing them).

Imposition of conditions by Land Court

41

(1) Where , on an application made by the landlord under section 40A(2), the Land Court determines that an objection by the landlord to a notice of diversification is unreasonable—

(a) the objection is of no effect; and

(b) the land may be used—

(i) as mentioned in paragraph (a) of subsection (4) of section 40; and

(ii) from such date as the Court may fix,

subject to any conditions imposed under subsection (2).

(2) Where, by virtue of subsection (1), the land may be used as mentioned in section 40(4)(a) or (5A) , the Land Court may impose on the tenant such reasonable conditions in relation to the use of the land as so mentioned as it considers appropriate.

(3) Where , on the application of the tenant, the Land Court determines that a condition imposed by the landlord under section 40(10) or, as the case may be, (14) is unreasonable, the Court may—

(a) remove the condition; and

(b) in its place, impose on the tenant such reasonable conditions as it considers appropriate.

Tenant’s right to timber

42

(1) The tenant under—

(a) a 1991 Act tenancy; ...

(b) a limited duration tenancy,

(d) a repairing tenancy,

has, for so long as the tenancy continues to have effect, the right to cut timber from any trees planted on the land by the tenant on or after the coming into force of this section; and any such timber belongs to the tenant.

(2) Subsection (1) does not apply in so far as the lease or any agreement in writing between the landlord and tenant makes provision to the contrary, provided that the lease or agreement also includes provision for a reduction in rent or payment of compensation to the tenant in respect of any loss incurred by the tenant as a result of that contrary provision.

Part 4 — Compensation under agricultural tenancies

Chapter 1 — Compensation for improvements

1991 Act tenancies

Agreements as to compensation for improvements

43

(1) After section 33 (improvements) of the 1991 Act there is inserted—

(33A) Where the tenant has carried out an improvement— (a) specified in Part II or III of Schedule 5 to this Act; and (b) by executing work which the landlord was required, at the time the lease was entered into and by virtue of section 5(2)(a) of this Act, to execute in order to fulfil his obligations under the lease, any term of the lease or of an agreement between the landlord and tenant made before the coming into force of this section which purports to provide that the amount of compensation payable to the tenant for the improvement is less than the amount of compensation to which the tenant is entitled under this Part of this Act for the improvement (or that no compensation is payable) shall not apply in relation to such part or proportion of the improvement as the landlord would have been so required to carry out in order to fulfil those obligations.

(2) The following provisions of that Act (which relate to agreements as to compensation for improvements) are repealed—

(a) in section 34, paragraph (b) of subsection (4);

(b) in section 37, subsection (2); and

(3) In section 38 (notice required of certain improvements) of that Act, after subsection (2) there is inserted—

(2A) Subsection (1) above shall not apply in the case of an improvement mentioned in subsection (1)(c) above if the improvement was carried out by executing work which the landlord was required, at the time the lease was entered into and by virtue of section 5(2)(a) of this Act, to execute in order to fulfil his obligations under the lease.

Amount of compensation where grant made to tenant

44

In section 36 (amount of compensation) of the 1991 Act, in subsection (3), for the words from “improvement” in the first place where it appears to the end there is substituted

improvement— (a) there shall be taken into account any benefit which the landlord has agreed in writing to give the tenant in consideration of the tenant carrying out the improvement; and (b) where a grant has been or will be made to the tenant in respect of the improvement, subject to the conditions of the grant— (i) if either the landlord or tenant has not made or will not make a contribution towards the cost of the improvement, or neither of them has made or will make such a contribution, the grant shall not be taken into account; (ii) in any other case, there shall be taken into account such proportion of the grant as equals the proportion of the contribution by the tenant towards the cost of the improvement as a proportion of the total of his contribution added to that of the landlord.

New types of tenancy

Right to compensation for improvements

45

(1) Subject to sections 48 and 49, a tenant of a short limited duration tenancy , a limited duration tenancy or a modern limited duration tenancy is entitled, on quitting the land on termination of the tenancy, to compensation from the landlord in respect of any improvement to which this subsection applies carried out by the tenant.

(2) Subsection (1) applies to the improvements specified in Schedule 5 to the 1991 Act (that Schedule applying for the purposes of that subsection as it does for the purposes of that Act).

(3) Where an improvement is the improvement specified in paragraph 32 (laying down of temporary pasture) of that Schedule, the tenant is entitled to compensation under subsection (1) even if—

(a) that improvement; or

(b) the leaving of temporary pasture at the termination of the tenancy,

was in contravention of a term of the lease or any agreement made by the tenant as to the method of cropping the arable lands.

(4) Where a tenant has remained in occupation of the land during two or more tenancies, the tenant is not deprived of any right to compensation under subsection (1) by reason only that the improvements were not carried out during the tenancy on the termination of which the tenant quits the land.

(5) Nothing in any order made under section 73 of the 1991 Act which varies the provisions of schedule 5 to that Act affects the right of a tenant of a short limited duration tenancy, a limited duration tenancy or a modern limited duration tenancy to claim, in respect of an improvement made or begun before the date on which such order comes into force, any compensation to which, but for the making of the order, the tenant would have been entitled.

Payment of compensation by incoming tenant

46

Subsections (2) to (5) of section 35 (payment of compensation by incoming tenant) of the 1991 Act (as read with Schedule 5 to that Act) apply to compensation which is payable or has been paid to an outgoing tenant of a short limited duration tenancy , a limited duration tenancy or a modern limited duration tenancy by the landlord under section 45(1) of this Act as they do to compensation to which that section of that Act applies, but as if—

(a) in subsection (4), paragraph (a) were omitted;

(b) in subsections (4) and (5), the references to an agricultural holding and the holding were references to the land; and

Amount of compensation

47

(1) The amount of compensation payable to a tenant under section 45(1) is such sum as fairly represents the value of the improvement to an incoming tenant.

(2) In ascertaining the amount of compensation so payable—

(a) account is to be taken of any benefit which the landlord has agreed in writing to give the tenant in consideration of the tenant carrying out the improvement; and

(b) where a grant has been or will be made to the tenant in respect of the improvement, subject to the conditions of the grant—

(i) if either the landlord or tenant has not made or will not make a contribution towards the cost of the improvement, or neither of them has made or will make such a contribution, the grant is not to be taken into account;

(ii) in any other case, there is to be taken into account such proportion of the grant as equals the proportion of any contribution made by the tenant towards the cost of the improvement as a proportion of the total of the tenant’s contribution added to that of the landlord.

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