Land Reform (Scotland) Act 2025

— (a) landlords and tenants of agricultural holdings, (b) landlords and tenants of small landholdings, (c) agents of a person mentioned in paragraph (a) or (b).

,

• (b) in subsection (2)—

• (i) in paragraph (a), after “negotiating” insert “rent”,

• (ii) in paragraph (f), after “waygo” insert “or removal”,

• (iii) after paragraph (g) insert—

(ga) creating small landholdings, (gb) converting small landholdings to crofts,

,

• (iv) in paragraph (j) (inserted by section 31), after “purposes” insert “or for non-cultivation activities”,

• (c) in subsection (9)—

• (i) for “section 61 of the 1991 Act or section 78 of the 2003 Act” substitute “the following provisions”,

• (ii) after “proceedings” insert

— (a) section 61 of the 1991 Act, (b) section 78 of the 2003 Act, (c) paragraph 74 of schedule 2 of the Land Reform (Scotland) Act 2025.

.

• (7) In section 28 (Tenant Farming Commissioner: promotion of codes of practice)—

• (a) in paragraph (b), for “landlords and tenants of agricultural holdings and their agents,” substitute

— (i) landlords and tenants of agricultural holdings, (ii) landlords and tenants of small landholdings, (iii) agents of a person mentioned in sub-paragraph (i) or (ii),

,

• (b) in paragraph (c), for “landlords and tenants of agricultural holdings and their agents,” substitute

— (i) landlords and tenants of agricultural holdings, (ii) landlords and tenants of small landholdings, (iii) agents of a person mentioned in sub-paragraph (i) or (ii),

,

• (c) in paragraph (e), after “agricultural holdings” insert “and small landholdings”.

• (8) In section 33 (report on inquiry), in subsection (4)—

• (a) for “section 61 of the 1991 Act or section 78 of the 2003 Act” substitute “the following provisions”,

• (b) after “proceedings” insert

— (a) section 61 of the 1991 Act, (b) section 78 of the 2003 Act, (c) paragraph 74 of schedule 2 of the Land Reform (Scotland) Act 2025.

.

• (9) The heading of section 36 becomes “Report on operation of agents in relation to agricultural holdings”.

• (10) The heading of section 37 becomes “Recommendations for modern list of improvements to agricultural holdings”.

Chapter 3 — Agricultural holdings

Tenant’s right to buy

15

• (1) The Agricultural Holdings (Scotland) Act 2003 is modified by subsections (2) to (10).

• (2) In section 25 (registration of tenant’s interest), in subsection (6)—

• (a) in the opening words, the words “on receipt of the extract,” are repealed,

• (b) in paragraph (a), after “tenant” insert “on receipt of the extract”,

• (c) in paragraph (b), after “security” insert “within the period of 28 days beginning with the day on which the owner receives the extract”.

• (3) In section 27 (transfers not requiring notice)—

• (a) in subsection (1)(c), after “spouses” insert “or civil partners”,

• (b) after subsection (5) insert—

(6) Before laying a draft of a Scottish statutory instrument containing an order under subsection (5) before the Scottish Parliament, the Scottish Ministers must consult such persons as they consider appropriate.

.

• (4) In section 28 (right to buy), after subsection (5) insert—

(6) Before laying a draft of a Scottish statutory instrument containing an order under subsection (5) before the Scottish Parliament, the Scottish Ministers must consult such persons as they consider appropriate.

.

• (5) In section 29 (exercise of right to buy)—

• (a) in subsection (1), for “28(1)” substitute “28(1)(a)”,

• (b) after subsection (2) insert—

(2A) Where a tenant has a right to buy land under section 28(1)(b), 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 the tenant gives notice to the owner or, as the case may be, the creditor that the tenant intends to buy the land.

,

• (c) for subsection (6) substitute—

(6) The right to buy mentioned in— (a) subsection (1) is extinguished if the tenant does not give notice in accordance with subsection (2), (b) subsection (3) is extinguished if the tenant does not give notice in accordance with subsection (4), (c) subsection (1), (2A) or (3) is extinguished if the tenant gives notice under subsection (5).

,

• (d) after subsection (7) insert—

(8) The Scottish Ministers may by regulations make provision for a period within which any notice given by a tenant under subsection (2A) is to be given. (9) Regulations under subsection (8) may modify this section.

.

• (6) After section 31 insert—

(31A) (1) The Scottish Ministers may by regulations make provision for or in connection with the registration by tenants of 1991 Act tenancies of their interests in acquiring the land comprised in their leases. (2) In particular (but without limit to that generality) regulations under subsection (1) may— (a) make provision about— (i) the manner in which tenants notify their landlord of their interest in acquiring the land comprised in their leases, (ii) the procedure by which that interest is (or may be) registered, (iii) how applications for registration and entries in the Register may be challenged, (iv) the effect of registration, (v) the Keeper’s functions in respect of registration, (vi) the updating or correction of entries in the Register, (vii) the consequences of an application for registration, or an entry in the Register, being inaccurate in a material regard, (viii) the expiry or cancellation of an entry in the Register, (b) modify sections 24 to 28, and (c) if the Scottish Ministers consider it necessary or expedient, make consequential provision which modifies the other provisions in this Part. (3) Before laying a draft of a Scottish statutory instrument containing regulations under subsection (1) before the Scottish Parliament, the Scottish Ministers must consult— (a) the Keeper, (b) such persons as the Scottish Ministers consider representative of the interests of tenants of 1991 Act tenancies and their landlords, and (c) such other persons as the Scottish Ministers consider are likely to have an interest in the registration of interests to acquire land.

.

• (7) In section 32 (procedure for buying), in subsection (3)—

• (a) in the opening words, for “are” substitute “is”,

• (b) in paragraph (a), after “29(2)” insert “, (2A)”.

• (8) In section 33 (appointment of valuer), in subsection (2), after “29(2)” insert “, (2A)”.

• (9) In section 34 (valuation of the land), in subsection (1)—

• (a) the words from “the date” to the end become paragraph (a),

• (b) after that paragraph insert

, or (b) where no such notice was given, the date on which the tenant gave notice under section 29 of the tenant’s intention to buy the land.

.

• (10) In section 91 (orders and regulations)—

• (a) in subsection (3)(a), after “18(4)(b)(ii),” insert “25(7),”,

• (b) in subsection (3)(b), after “18A(4)(b)(ii),” insert “25(3),”,

• (c) in subsection (4)(b), after “9C(6),” insert “29(8), 31A,”.

• (11) The Land Reform (Scotland) Act 2016 is modified by subsections (12) and (13).

• (12) In section 27(2) (Tenant Farming Commissioner: codes of practice), after paragraph (e) insert—

(ea) the tenant’s right to buy,

.

• (13) Section 99 (tenant’s right to buy: removal of requirement to register) is repealed.

Assignation in relation to 1991 Act tenancies

16

• (1) The Agricultural Holdings (Scotland) Act 1991 is modified as follows.

• (2) In section 10A (assignation of tenancy)—

• (a) in subsection (1A), for paragraphs (b) to (n) substitute—

(aa) a spouse or civil partner of— (i) a tenant’s descendant, (ii) a tenant’s sibling, (ab) in relation to a tenant’s spouse or civil partner— (i) that person’s sibling, (ii) a spouse or civil partner of such a sibling, (iii) a descendant of such a sibling.

,

• (b) after subsection (1A) insert—

(1B) For the purpose of subsection (1A)— (a) a reference to a spouse or civil partner of a person (“person A”) includes, where person A has died, a reference to a person who was the spouse or civil partner of person A immediately prior to person A’s death, (b) two people are siblings if they have at least one parent in common, (c) a step-child or, as the case may be, step-sibling of a person is to be treated as being the same as a child or, as the case may be, sibling of a person (and subsection (1A)(a) is to be read as if the rules of intestacy applied accordingly).

,

• (c) in subsection (2), after “assignee” insert “(including the proposed assignee’s relationship to the tenant)”,

• (d) in subsection (3B)(a), for “of the notice” substitute “on which the notice is given”,

• (e) in subsection (4), for “30 days of the giving of the notice” substitute “the period of 28 days beginning with the date on which the notice is given”,

• (f) in subsection (5), for “under this section shall, in so far as it so purports, be null and void” substitute “in accordance with this section or in accordance with an order of the Land Court made under section 60 is, in so far as it so purports, null and void”,

• (g) in subsection (6), for paragraphs (a) to (m) substitute—

(aa) a tenant’s parent, (ab) in relation to a tenant’s child— (i) that child, (ii) that child’s spouse or civil partner, (iii) a descendant of that child, (ac) in relation to a tenant’s sibling— (i) that sibling, (ii) that sibling’s spouse or civil partner, (iii) a descendant of that sibling, (ad) in relation to a tenant’s spouse or civil partner— (i) that spouse or civil partner, (ii) that spouse or civil partner’s sibling, (iii) a descendant of that sibling.

,

• (h) after subsection (6) insert—

(7) For the purpose of subsection (6)— (a) a reference to a spouse or civil partner of a person (“person A”) includes, where person A has died, a reference to a person who was the spouse or civil partner of person A immediately prior to person A’s death, (b) a step-child of a person is to be treated as being the same as a child of a person.

.

Assignation in relation to 2003 Act tenancies

17

• (1) The Agricultural Holdings (Scotland) Act 2003 is modified as follows.

• (2) In section 7 (assignation and subletting of limited duration tenancies)—

• (a) in subsection (2), after “assignee” insert “(including the proposed assignee’s relationship to the tenant)”,

• (b) in subsection (3B)(a), for “of the notice” substitute “on which the notice is given”,

• (c) in subsection (4), for “30 days of the giving of the notice” substitute “the period of 28 days beginning with the date on which the notice is given”,

• (d) in subsection (5)(a)(ii), for “30 days of the giving of the notice” substitute “the period of 28 days beginning with the date on which the notice is given”,

• (e) in subsection (5A), for paragraphs (a) to (m) substitute—

(aa) a tenant’s parent, (ab) in relation to a tenant’s child— (i) that child, (ii) that child's spouse or civil partner, (iii) a descendant of that child, (ac) in relation to a tenant’s sibling— (i) that sibling, (ii) that sibling’s spouse or civil partner, (iii) a descendant of that sibling, (ad) in relation to a tenant’s spouse or civil partner— (i) that spouse or civil partner, (ii) that spouse or civil partner’s sibling, (iii) a descendant of that sibling.

,

• (f) after that subsection insert—

(5B) For the purpose of subsection (5A)— (a) a reference to a spouse or civil partner of a person (“person A”) includes, where person A has died, a reference to a person who was the spouse or civil partner of person A immediately prior to person A’s death, (b) a step-child of a person is to be treated as being the same as a child of a person.

.

18

• (1) The Agricultural Holdings (Scotland) Act 2003 is modified as follows.

• (2) In section 7B (assignation of modern limited duration tenancies)—

• (a) in subsection (2), after “assignee” insert “(including the proposed assignee’s relationship to the tenant)”,

• (b) in subsection (5)(a), for “of the notice” substitute “on which the notice is given”,

• (c) in subsection (6), for “30 days of the giving of the notice” substitute “the period of 28 days beginning with the date on which the notice is given”,

• (d) in subsection (8), for paragraphs (a) to (m) substitute—

(aa) a tenant’s parent, (ab) in relation to a tenant’s child— (i) that child, (ii) that child's spouse or civil partner, (iii) a descendant of that child, (ac) in relation to a tenant’s sibling— (i) that sibling, (ii) that sibling’s spouse or civil partner, (iii) a descendant of that sibling, (ad) in relation to a tenant’s spouse or civil partner— (i) that spouse or civil partner, (ii) that spouse or civil partner’s sibling, (iii) a descendant of that sibling.

,

• (e) after that subsection insert—

(9) For the purpose of subsection (8)— (a) a reference to a spouse or civil partner of a person (“person A”) includes, where person A has died, a reference to a person who was the spouse or civil partner of person A immediately prior to person A’s death, (b) a step-child of a person is to be treated as being the same as a child of a person.

.

19

• (1) The Agricultural Holdings (Scotland) Act 2003 is modified as follows.

• (2) In section 7D (assignation of repairing tenancies) (as inserted by the section 106(2) of the Land Reform (Scotland) Act 2016)—

• (a) in subsection (4)(a), for “of the notice” substitute “on which the notice is given”,

• (b) in subsection (5), for “30 days of the giving of the notice” substitute “the period of 28 days beginning with the date in which the notice is given”.

Resumption

20

• (1) The Agricultural Holdings (Scotland) Act 1991 is modified as follows.

• (2) After Part 3 insert—

(32ZA) (1) This section applies where a landlord is entitled to resume possession of a part of an agricultural holding. (2) To resume possession of a part of an agricultural holding the landlord must give the tenant written notice of the landlord’s intention to resume possession. (3) The notice must— (a) be in such form and contain such information as may be prescribed, (b) nominate a person who appears to the landlord to meet the requirements to be a valuer mentioned in paragraph 3(4) of schedule 2A, (c) be given not less than 1 year before the date on which the resumption is to take place, and (d) specify that date. (4) Where notice is given under subsection (2) for resumption of possession of part of the holding, the tenant may, within the period of 6 weeks beginning with (the later of) the date on which— (a) the notice was given, or (b) any matter arising from the notice is determined, terminate the tenancy by giving notice in writing to the landlord. (5) Where the tenant terminates the tenancy by giving notice under subsection (4), the termination takes effect on the date specified under subsection (3)(d). (6) In addition to— (a) the reduction in rent to which the tenant is entitled under section 31(1), and (b) any claim the tenant may have for compensation under Part 4 or 5 or an additional payment under Part 6 (or under the lease), the tenant is to be paid an amount determined in accordance with schedule 2A as compensation for the tenant’s interest in the value of the land being resumed. (7) Where— (a) possession of land has been resumed under this section for a purpose mentioned in section 29(2)(f) (which specifies certain forms of mineral exploitation) (that provision applying for the purposes of this section as it does for the purposes of that section), and (b) the land has subsequently been made suitable for, and is available for, agricultural use, that land is, if the conditions in subsection (8) are fulfilled, to be restored to the tenancy. (8) 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 of possession was calculated on the basis that the land would be restored under subsection (7). (32ZB) (1) Except where the tenant has given notice terminating the tenancy at the date of resumption of possession under section 32ZA(4), a landlord may withdraw a notice of resumption given in accordance with that section at any time before the date specified in section 32ZA(3)(d). (2) Where the Tenant Farming Commissioner has appointed a valuer under paragraph 3(2) of schedule 2A, the landlord must, at the same time as withdrawing the notice of resumption, send a copy of the withdrawal to the Commissioner. (3) Where a landlord withdraws a notice of resumption, the tenant is entitled to recover from the landlord any loss or expense reasonably incurred in reliance on the landlord’s notice of resumption.

.

• (3) In section 21 (notice to quit and notice of intention to quit) in subsection (1), after “20” insert “, 32ZA(4)”.

• (4) After schedule 2 insert—

Schedule 2A (1) In this schedule, “valuer” means a person appointed under paragraph 2(2), 3(2) or, as the case may be, 4(5)(b). (2) (1) This paragraph applies where a notice of resumption has been given under section 32ZA(2). (2) The landlord must appoint as valuer— (a) the person nominated in the notice given under section 32ZA(2), provided sub-paragraph (3) does not apply, or (b) the person agreed on as the valuer by the parties during negotiations under sub-paragraph (5). (3) This sub-paragraph applies where— (a) the tenant has given— (i) notice to terminate the tenancy under section 32ZA(4), or (ii) a notice of objection under sub-paragraph (4), or (b) the period mentioned in section 32ZA(4) or, as the case may be, sub-paragraph (4) has not ended, no notice as mentioned in paragraph (a)(i) or (ii) having been given. (4) Where the tenant objects to a person nominated to be the valuer in a notice given under section 32ZA(2), the tenant must, within the period of 6 weeks beginning with the date on which the notice is given, give notice of the objection to the landlord. (5) Where a notice of objection by the tenant is given under sub-paragraph (4), the parties may enter into negotiations with a view to agreeing on a person to be appointed as the valuer, being a person who appears to both parties to meet the requirements mentioned in paragraph 3(4). (6) The landlord may request that the Tenant Farming Commissioner appoint a valuer under paragraph 3 where— (a) the parties do not enter into negotiations of a kind mentioned in sub-paragraph (5), or (b) no agreement is reached on the appointment of a person as valuer during such negotiations. (7) A request made under sub-paragraph (6)— (a) must be copied to the tenant, (b) must include— (i) copies of the notice given under section 32ZA(2) and the notice of objection given under sub-paragraph (4), and (ii) details of any negotiations undertaken under sub-paragraph (4), including any relevant information about persons rejected as valuer by either party. (8) A notice given under section 32ZA(2) is deemed to be of no effect if, within the period of 10 weeks beginning with the date on which the notice is given— (a) the landlord does not appoint a person as valuer in accordance with sub-paragraph (2), or (b) the landlord does not make a request under sub-paragraph (6). (9) Where the tenant gives notice under section 32ZA(4) to terminate the tenancy the landlord must, where a request has been made under sub-paragraph (6), give notice to the Commissioner and to any valuer appointed by virtue of that request. (3) (1) This paragraph applies where the Tenant Farming Commissioner receives a request under paragraph 2(6). (2) The Commissioner must, before the expiry of the period mentioned in sub-paragraph (3), appoint as valuer a person, who meets the requirements mentioned in sub-paragraph (4), to— (a) carry out the assessment mentioned in paragraph 6(1), and (b) calculate the amount to be payable by the landlord to the tenant as compensation for the value of the land being resumed. (3) The period is— (a) the period of 28 days beginning with the date on which the notice is served, or (b) such other period as may be prescribed. (4) The requirements referred to in sub-paragraph (2) are that the person appears to the Commissioner— (a) to be independent of the landlord and the tenant, and (b) to possess qualifications, knowledge and experience suitable for assessing the— (i) value of agricultural land, both with vacant possession and where subject to agricultural holdings, and (ii) compensation that may be payable to tenants and landlords of such holdings. (5) The Commissioner must give notice in writing to the tenant and the landlord of the name and address of the person appointed under sub-paragraph (2). (4) (1) This paragraph applies where the tenant or the landlord objects to the person appointed under paragraph 3(2) by the Tenant Farming Commissioner on one or more of the grounds mentioned in sub-paragraph (2). (2) The grounds are that the person— (a) is not independent of the landlord or, as the case may be, the tenant, or (b) does not possess the qualifications, knowledge and experience mentioned in paragraph 3(4)(b). (3) The tenant or, as the case may be, the landlord may apply to the Land Court to appoint a person as the valuer in place of the person appointed by the Commissioner. (4) An application under sub-paragraph (3)— (a) must— (i) be made before the expiry of the period of 14 days beginning with the date of the notice under paragraph 3(5), and (ii) state the ground of objection to the person appointed by the Commissioner, and (b) may propose a person to be appointed as the valuer in place of that person. (5) The Land Court may, on an application under sub-paragraph (3)— (a) reject the objection, or (b) appoint a person as the valuer (whether a person proposed in the application or not). (6) The decision of the Land Court on an application under sub-paragraph (3) is final. (5) (1) The landlord is responsible for meeting the expenses incurred by the valuer in carrying out functions under this schedule. (2) Where expenses have been met by the Tenant Farming Commissioner in connection with the appointing of a valuer, the Commissioner is entitled to recover them from the landlord. (6) (1) The valuer is to assess the value of the land being resumed— (a) if sold with vacant possession, and (b) if sold with the tenant still in occupation. (2) In assessing the value of the land under sub-paragraph (1), the valuer— (a) is to have regard to the value that would be likely to be agreed between a reasonable seller and buyer of such land assuming the seller and buyer are, as respects the transaction, willing, (b) is to take account— (i) of when the landlord would in the normal course of events have been likely to recover vacant possession of the land from the tenant, (ii) of the terms and conditions of any lease, other than the lease of the holding, affecting the land, (c) is to take no account of— (i) the existence of any person to whom the tenant could assign the lease of the holding under section 10A or to whom the lease could be bequeathed under section 11, (ii) 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, (iii) any factor attributable to any use of the land which is or would be unlawful, (iv) any increase in the value of the land resulting from any improvements in relation to which the tenant would be entitled to compensation, (v) any increase, or reduction, 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 one permitted by the lease of the holding, (vi) any reduction in the value of the land resulting from any dilapidation or deterioration of, or damage to, fixed equipment or land caused or permitted by the tenant in relation to which the landlord would be entitled to compensation. (3) For the purposes of sub-paragraph (2)(c)(iv)— (a) subject to paragraph (b), “improvements” is to be construed by reference to schedule 5, and (b) the continuous adoption by the tenant of a standard 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) The valuer is to calculate, in accordance with paragraph 8, the amount to be payable by the landlord to the tenant as compensation for the value of the land being resumed. (5) The Scottish Ministers may by regulations amend sub-paragraphs (2) and (3) so as to— (a) add, (b) remove, (c) vary the description of, a matter which the valuer must have regard to, take account of or take no account of in assessing the value of the land under sub-paragraph (1). (6) Regulations under sub-paragraph (5) are subject to the affirmative procedure. (7) (1) The valuer is— (a) to invite the landlord and the tenant to make written representations about the assessment under paragraph 6(1), and (b) to have regard to any such representations. (2) The valuer may— (a) enter onto land at reasonable times and having given reasonable notice, and (b) make any reasonable request of the landlord and tenant (with which they must comply), for the purposes of any assessment under paragraph 6(1). (3) In the event that the landlord or, as the case may be, tenant does not provide entry to the valuer, respond to a request of the valuer or otherwise seeks to obstruct or delay the valuation, the valuer may— (a) apply to the Land Court for an order requiring the relevant party to comply, and (b) recover the cost of doing so from the party. (4) The valuer is not to be held to be in breach of a requirement of this schedule where such breach arises as a result of the actions of the tenant or the landlord. (8) The amount to be payable by the landlord to the tenant in respect of the value of the land being resumed is to be half of the difference between the value of the land being resumed— (a) if sold with vacant possession, and (b) if sold with the tenant still in occupation, (both as assessed under paragraph 6(1) or, as the case may be, 10(3)(a)). (9) (1) The valuer must, before the expiry of the period mentioned in sub-paragraph (2), serve a notice in writing, specifying the matters mentioned in sub-paragraph (3), on— (a) the tenant, and (b) the landlord. (2) The period is the period of 8 weeks beginning with— (a) the date on which the valuer is appointed by the landlord under paragraph 2(2), (b) the date on which the period, within which an application under paragraph 4(3) may be made, expires, or (c) where such an application is made, the date of the Land Court’s decision on it. (3) The matters are— (a) the value, assessed under paragraph 6(1), of the land being resumed— (i) if sold with vacant possession, and (ii) if sold with the tenant still in occupation, (b) the amount, calculated in accordance with paragraph 8, to be payable by the landlord to the tenant in respect of compensation for the value of the land being resumed. (4) The notice must also— (a) be dated, (b) state the date of valuation of each of the values and the amount mentioned in sub-paragraph (3), and (c) set out how the valuer arrived at each of those values and that amount. (5) The notice may also contain or be accompanied by any other information that the valuer considers appropriate. (6) A notice served under sub-paragraph (1) is a “notice of assessment”. (10) (1) The tenant or the landlord may appeal to the Lands Tribunal against a notice of assessment. (2) An appeal under this paragraph must— (a) state the grounds on which it is being made, and (b) be lodged before the expiry of the period of 21 days beginning with the date the notice of assessment was served. (3) The Lands Tribunal may— (a) reassess any value mentioned in paragraph 6(1) (and any factor affecting the value), (b) determine the amount to be payable by the landlord to the tenant in respect of the value of the land being resumed. (4) The valuer whose assessment is appealed against may be a witness in the appeal proceedings. (5) In the appeal proceedings, in addition to the landlord and the tenant, the following persons are entitled to be heard— (a) where the landlord is a creditor in a standard security, the owner of the land, (b) where the landlord is the owner of the land, any creditor in a standard security over the land or any part of it. (6) The Lands Tribunal is to give written reasons for its decision on an appeal under this paragraph. (7) The decision of the Lands Tribunal in an appeal under this paragraph is final. (11) Where, in an appeal before the Lands Tribunal under paragraph 10, an issue of law arises which may competently be determined by the Land Court by virtue of this Act or the 2003 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.

.

21

• (1) The Agricultural Holdings (Scotland) Act 2003 is modified as follows.

• (2) In section 17 (resumption of land by landlord)—

• (a) in subsection (2), after paragraph (a) insert—

(aa) nominate a person who appears to the landlord to meet the requirements to be a valuer mentioned in paragraph 3(4) of schedule 2,

,

• (b) in subsection (3), for “28 days” substitute “6 weeks”,

• (c) after subsection (4) insert—

(4A) In addition to— (a) the reduction in rent, and (b) any claim for compensation the tenant may have under this Act (or under the lease) in respect of the resumed land, the tenant is to be paid an amount determined in accordance with schedule 2 as compensation for the tenant’s interest in the value of the land being resumed.

.

• (3) After section 17 insert—

(17A) (1) Except where the tenant has given notice terminating the tenancy at the date of resumption of possession under section 17(3), a landlord may withdraw a notice of resumption given in accordance with that section at any time before the date specified in section 17(2)(c). (2) But where the notice of resumption relates to the all of the land comprised in the lease, the notice may not be withdrawn without the tenant’s consent. (3) Where the Tenant Farming Commissioner has appointed a valuer under paragraph 3 of schedule 2, the landlord must, at the same time as withdrawing the notice of resumption, send a copy of the withdrawal to the Commissioner. (4) Where a landlord withdraws a notice of resumption, the tenant is entitled to recover from the landlord any loss or expense reasonably incurred in reliance on the landlord’s notice of resumption.

.

• (4) In section 91 (orders and regulations)—

• (a) in subsection (3)(b), after “38P(2)” insert “or paragraph 3(3)(b) of schedule 2”,

• (b) in subsection (4)(b), after “74A” insert “or paragraph 6(5) of schedule 2”.

• (5) In section 93 (interpretation), after the definition of “tenant” insert—

• “Tenant Farming Commissioner” means the person appointed as Tenant Farming Commissioner under section 10(1) of the Land Reform (Scotland) Act 2016,

,

• (6) After the schedule insert—

Schedule 2 (1) In this schedule, “valuer” means a person appointed under paragraph 2(2), 3(2) or, as the case may be, 4(5)(b). (2) (1) This paragraph applies where a notice of resumption has been given under section 17(2). (2) The landlord must appoint as valuer— (a) the person nominated in the notice given under section 17(2), provided sub-paragraph (3) does not apply, or (b) the person agreed on as the valuer by the parties during negotiations under sub-paragraph (5). (3) This sub-paragraph applies where— (a) the tenant has given— (i) notice to terminate the tenancy under section 17(4), or (ii) a notice of objection under sub-paragraph (4), or (b) the period mentioned in section 17(4) or, as the case may be, sub-paragraph (4) has not ended, no notice as mentioned in paragraph (a)(i) or (ii) having been given. (4) Where the tenant objects to a person nominated to be the valuer in a notice given under section 17(2), the tenant must, within the period of 6 weeks beginning with the date on which the notice is given, give notice of the objection to the landlord. (5) Where a notice of objection by the tenant is given under sub-paragraph (4), the parties may enter into negotiations with a view to agreeing on a person to be appointed as the valuer, being a person who appears to both parties to meet the requirements mentioned in paragraph 3(4). (6) The landlord may request that the Tenant Farming Commissioner appoint a valuer under paragraph 3 where— (a) the parties do not enter into negotiations of a kind mentioned in sub-paragraph (5), or (b) no agreement is reached on the appointment of a person as valuer during such negotiations. (7) A request made under sub-paragraph (6)— (a) must be copied to the tenant, (b) must include— (i) copies of the notice given under section 17(2) and the notice of objection given under sub-paragraph (4), and (ii) details of any negotiations undertaken under sub-paragraph (5), including any relevant information about persons rejected as valuer by either party. (8) A notice given under section 17(2) is deemed to be of no effect if, within the period of 10 weeks beginning with the date on which the notice is given— (a) the landlord does not appoint a person as valuer in accordance with sub-paragraph (2), or (b) the landlord does not make a request under sub-paragraph (6). (9) Where the tenant gives notice under section 17(3) to terminate the tenancy the landlord must, where a request has been made under sub-paragraph (6), give notice to the Commissioner and to any valuer appointed by virtue of that request. (3) (1) This paragraph applies where the Tenant Farming Commissioner receives a request under paragraph 2(6). (2) The Commissioner must, before the expiry of the period mentioned in sub-paragraph (3), appoint as valuer a person, who meets the requirements mentioned in sub-paragraph (4), to— (a) carry out the assessment mentioned in paragraph 6(1), and (b) calculate the amount to be payable by the landlord to the tenant as compensation for the value of the land being resumed. (3) The period is— (a) the period of 28 days beginning with the date on which the notice is served, or (b) such other period specified by the Scottish Ministers by regulations. (4) The requirements referred to in sub-paragraph (2) are that the person appears to the Commissioner— (a) to be independent of the landlord and the tenant, and (b) to possess qualifications, knowledge and experience suitable for assessing the— (i) value of agricultural land, both with vacant possession and where subject to agricultural holdings, and (ii) compensation that may be payable to tenants and landlords of such holdings. (5) The Commissioner must give notice in writing to the tenant and the landlord of the name and address of the person appointed under sub-paragraph (2). (4) (1) This paragraph applies where the tenant or the landlord objects to the person appointed under paragraph 3(2) by the Commissioner on one or more of the grounds mentioned in sub-paragraph (2). (2) The grounds are that the person— (a) is not independent of the landlord or, as the case may be, the tenant, or (b) does not possess the qualifications, knowledge and experience mentioned in paragraph 3(4)(b). (3) The tenant or, as the case may be, the landlord may apply to the Land Court to appoint a person as the valuer in place of the person appointed by the Commissioner. (4) An application under sub-paragraph (3)— (a) must— (i) be made before the expiry of the period of 14 days beginning with the date of the notice under paragraph 3(5), and (ii) state the ground of objection to the person appointed by the Commissioner, and (b) may propose a person to be appointed as the valuer in place of that person. (5) The Land Court may, on an application under sub-paragraph (3)— (a) reject the objection, or (b) appoint a person as the valuer (whether a person proposed in the application or not). (6) The decision of the Land Court on an application under sub-paragraph (3) is final. (5) (1) The landlord is responsible for meeting the expenses incurred by the valuer in carrying out functions under this schedule. (2) Where expenses have been met by the Tenant Farming Commissioner in connection with the appointing of a valuer, the Commissioner is entitled to recover them from the landlord. (6) (1) The valuer is to assess the value of the land being resumed— (a) if sold with vacant possession, and (b) if sold with the tenant still in occupation. (2) In assessing the value of the land under sub-paragraph (1), the valuer— (a) is to have regard to the value that would be likely to be agreed between a reasonable seller and buyer of such land assuming the seller and buyer are, as respects the transaction, willing, (b) is to take account— (i) of when the landlord would in the normal course of events have been likely to recover vacant possession of the land from the tenant, (ii) of the terms and conditions of any lease, other than the lease of the land comprised in the tenancy, affecting the land, (c) is to take no account of— (i) the existence of any person to whom the tenant could assign the lease under section 7, 7B or, as the case may be, 7D or to whom the lease could be bequeathed under section 21, (ii) 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, (iii) any factor attributable to any use of the land which is or would be unlawful, (iv) any increase in the value of the land resulting from any improvements in relation to which the tenant would be entitled to compensation under section 45, (v) any increase, or reduction, 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 one permitted by the lease, (vi) any reduction in the value of the land resulting from any dilapidation or deterioration of, or damage to, fixed equipment or land caused or permitted by the tenant in relation to which the landlord would be entitled to compensation. (3) For the purposes of sub-paragraph (2)(c)(iv)— (a) subject to paragraph (b), “improvements” is to be construed by reference to schedule 5 of the 1991 Act, and (b) the continuous adoption by the tenant of a standard 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) The valuer is to calculate, in accordance with paragraph 8, the amount to be payable by the landlord to the tenant as compensation for the value of the land being resumed. (5) The Scottish Ministers may by regulations amend sub-paragraphs (2) and (3) so as to— (a) add, (b) remove, (c) vary the description of, a matter which the valuer must have regard to, take account of or take no account of in assessing the value of the land under sub-paragraph (1). (7) (1) The valuer is— (a) to invite the landlord and the tenant to make written representations about the assessment under paragraph 6(1), and (b) to have regard to any such representations. (2) The valuer may— (a) enter onto land at reasonable times and having given reasonable notice, and (b) make any reasonable request of the landlord and tenant (with which they must comply), for the purposes of any assessment under paragraph 6(1). (3) In the event that the landlord or, as the case may be, tenant does not provide entry to the valuer, respond to a request of the valuer or otherwise seeks to obstruct or delay the valuation, the valuer may— (a) apply to the Land Court for an order requiring the relevant party to comply, and (b) recover the cost of doing so from the party. (4) The valuer is not to be held to be in breach of a requirement of this schedule where such breach arises as a result of the actions of the tenant or the landlord. (8) The amount to be payable by the landlord to the tenant in respect of the value of the land being resumed is to be half of the difference between the value of the land being resumed— (a) if sold with vacant possession, and (b) if sold with the tenant still in occupation, (both as assessed under paragraph 6(1) or, as the case may be, 10(3)(a)). (9) (1) The valuer must, before the expiry of the period mentioned in sub-paragraph (2), serve a notice in writing, specifying the matters mentioned in sub-paragraph (3), on— (a) the tenant, and (b) the landlord. (2) The period is the period of 8 weeks beginning with— (a) the date on which the valuer is appointed by the landlord under paragraph 2(2), (b) the date on which the period, within which an application under paragraph 4(3) may be made, expires, or (c) where such an application is made, the date of the Land Court’s decision on it. (3) The matters are— (a) the value, assessed under paragraph 6(1), of the land being resumed— (i) if sold with vacant possession, and (ii) if sold with the tenant still in occupation, (b) the amount, calculated in accordance with paragraph 8, to be payable by the landlord to the tenant in respect of compensation for the value of the land being resumed. (4) The notice must also— (a) be dated, (b) state the date of valuation of each of the values and the amount mentioned in sub-paragraph (3), and (c) set out how the valuer arrived at each of those values and that amount. (5) The notice may also contain or be accompanied by any other information that the valuer considers appropriate. (6) A notice served under sub-paragraph (1) is a “notice of assessment”. (10) (1) The tenant or the landlord may appeal to the Lands Tribunal against a notice of assessment. (2) An appeal under this paragraph must— (a) state the grounds on which it is being made, and (b) be lodged before the expiry of the period of 21 days beginning with the date the notice of assessment was served. (3) The Lands Tribunal may— (a) reassess any value mentioned in paragraph 6(1) (and any factor affecting the value), (b) determine the amount to be payable by the landlord to the tenant in respect of the value of the land being resumed. (4) The valuer whose assessment is appealed against may be a witness in the appeal proceedings. (5) In the appeal proceedings, in addition to the landlord and the tenant, the following persons are entitled to be heard— (a) where the landlord is a creditor in a standard security, the owner of the land, (b) where the landlord is the owner of the land, any creditor in a standard security over the land or any part of it. (6) The Lands Tribunal is to give written reasons for its decision on an appeal under this paragraph. (7) The decision of the Lands Tribunal in an appeal under this paragraph is final. (11) Where, in an appeal before the Lands Tribunal under paragraph 10, an issue of law arises which may competently be determined by the Land Court by virtue of this Act or the 1991 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.

.

22

• (1) The Agricultural Holdings (Scotland) Act 1991 is modified by subsection (2).

• (2) In section 43 (compensation for disturbance)—

• (a) after subsection (1) insert—

(1A) Compensation for disturbance is also to be payable by the landlord to the tenant where the landlord resumes possession of the holding, or a part of the holding.

,

• (b) for subsection (3) substitute—

(3) Subject to subsection (4) below, the amount of the compensation payable under this section is— (a) the amount of the loss or expense directly attributable to the quitting of the holding (or, as the case may be, the land resumed) which is unavoidably incurred by the tenant upon or in connection with the sale or removal of household goods, implements of husbandry, fixtures, farm produce or farm stock on or used in connection with the holding (or, as the case may be, the land resumed), (b) so far as not otherwise recoverable, the amount of any expenses reasonably incurred by the tenant in connection with the development of the holding (or, as the case may be, the land resumed), including, in particular, professional fees paid by the tenant in respect of obtaining planning permission or building warrants, (c) the amount of any expenses reasonably incurred by the tenant in the preparation of the claim for compensation (not being expenses arising from the determination of any question arising under this section).

,

• (c) in subsection (4)—

• (i) in paragraph (a), after “holding” insert “(or, as the case may be, the amount of rent proportionate to the land resumed)”,

• (ii) in paragraph (b)—

• (A) after “holding” insert “(or as the case may be, the amount proportionate to the land resumed)”,

• (B) the words “the sale of any such goods, implements fixtures, produce or stock aforesaid” become sub-paragraph (i),

• (C) after that sub-paragraph insert

, or (ii) the amount of any expenses incurred in connection with development, and has given the landlord a reasonable opportunity to value the items mentioned in sub-paragraph (i) or assess the amount of expenses incurred.

,

• (D) the words “and has afforded him a reasonable opportunity of making a valuation thereof” are repealed.

• (3) The Agricultural Holdings (Scotland) Act 2003 is modified by subsection (4).

• (4) In section 52 (compensation for disturbance)—

• (a) in subsection (2), paragraph (c) is repealed,

• (b) in subsection (4), for “mentioned in subsection (2)(c)” substitute “where the resumption under section 17 is for part of the land”.

Compensation on termination and resumption

23

• (1) The Scottish Ministers may by regulations modify the enactment specified in column 1 of the table below for a purpose specified in column 2.

1: enactment

2: purpose

The Agricultural Holdings (Scotland) Act 1991 (“the 1991 Act”)

Creating an entitlement to compensation for a tenant (which is additional to any other entitlement to compensation the tenant may have under the 1991 Act) where— the tenant’s 1991 Act tenancy (as defined by section 1(4) of the Agricultural Holdings (Scotland) Act 2003) is terminated by reason of a notice to quit given by the landlord, and the notice to quit is given solely on the ground mentioned in section 22(2)(b) of the 1991 Act Changing or clarifying the method for determining the amount of that additional compensation

• (2) Without prejudice to its generality, the power under subsection (1) may be exercised for the first of the purposes specified in it to make any provision of a kind contained in schedule 2A of the 1991 Act (as inserted, or to be inserted, by section 20(4) of this Act).

• (3) Section 46 applies in relation to the first regulations to be made under subsection (1).

• (4) No regulations may be made under subsection (1) after the end of the period of 5 years beginning with the day after Royal Assent.

24

• (1) The Scottish Ministers may by regulations modify the enactment specified in column 1 of the table below for the purpose specified in column 2.

1: enactment	2: purpose
The Agricultural Holdings (Scotland) Act 2003 (“the 2003 Act”), schedule 2 (as inserted by section 21 (6) of this Act)	Changing or clarifying the method for determining the additional amount of compensation payable to a tenant under section 17(4A) of the 2003 Act (as inserted, or to be inserted, by section 21 (2) (c) of this Act)

• (2) Regulations under subsection (1) may be made before section 21 of this Act comes into force so that the modifications the regulations make to schedule 2 of the 2003 Act come into force at the same time as section 21 of this Act inserts that schedule.

• (3) Section 46 applies in relation to the first regulations to be made under subsection (1).

• (4) No regulations may be made under subsection (1) after the end of the period of 5 years beginning with the day after Royal Assent.

Compensation for improvements

Compensation for improvements

25

• (1) The Agricultural Holdings (Scotland) Act 1991 is modified by subsections (2) to (11).

• (2) In section 14A (landlord improvement notices), in subsection (2), after “improvement” in the second place it appears insert “of a kind referred to or”.

• (3) In section 33 (improvements), in the definition of “new improvement”, for “specified” substitute “of a kind referred to or specified”.

• (4) In section 33A (agreements as to compensation for improvements), in paragraph (a), for “specified in Part II or III” substitute “of a kind referred to in paragraph 3 or specified in paragraph 5”.

• (5) In section 34 (right to compensation for improvements), in subsection (6), for “32” substitute “5(k)”.

• (6) In section 35 (payment of compensation by incoming tenant), in subsection (3), for “of a kind referred to in Part III” substitute “specified in paragraph 5”.

• (7) In section 37 (consents necessary for compensation for some improvements)—

• (a) in subsection (1), in paragraph (c), for “specified in Part I” substitute “of a kind referred to in paragraph 1”,

• (b) after that subsection insert—

(1A) Subsections (1B) to (1H) apply to a new improvement of a kind referred to in paragraph 1 of schedule 5. (1B) A tenant must— (a) give notice to the landlord requesting consent to the proposed improvement in such form as may be prescribed, and (b) at the time of giving notice, provide any prescribed information about the improvement. (1C) If the landlord has not responded to a notice requesting consent under subsection (1B) within the period of 70 days beginning with the day on which the notice is given, the landlord is deemed to have consented to the improvement unconditionally. (1D) Where a landlord refuses consent, the landlord must provide reasons in writing explaining the basis of the refusal including, in particular, by reference to the matters described in section 39(2B). (1E) Where the parties have been unable to agree terms for consent within the 70 day period described in subsection (1C), the landlord must, as soon as reasonably practicable after the end of that period, provide the tenant with reasons in writing explaining the basis why the landlord has not consented to the proposed improvement including, in particular, by reference to the matters described in section 39(2B). (1F) Where— (a) the landlord has refused consent to the proposed improvement (whether or not reasons have been provided under subsection (1D)), or (b) the parties have been unable to agree terms for consent within the 70 day period described in subsection (1C), the tenant may apply to the Land Court for approval to carry out the improvement. (1G) Subsections (2) to (4) of section 39 apply to an application for approval under subsection (1F) as they apply to an application for approval under section 39(2). (1H) In the event that parties agree on the terms as to compensation, or otherwise on which the improvement is to be carried out, it is immaterial to the payment of such compensation whether the requirements for notice under this section were complied with.

.

• (8) In section 38 (notice required of certain improvements)—

• (a) in subsection (1)—

• (i) in paragraph (c), for “specified in Part II” substitute “of a kind referred to in paragraph 3”,

• (ii) in the closing words, after “(3)” insert “and (3A)”,

• (b) after subsection (3) insert—

(3A) Notice is in accordance with this subsection if— (a) it is in such form as may be prescribed, and (b) it contains (or is accompanied by) any prescribed information about the improvement.

.

• (9) In section 39 (compensation for schedule 5, Part II improvements conditional on approval of Land Court in certain cases)—

• (a) in subsection (1), for “specified in Part II” substitute “of a kind referred to in paragraph 3”,

• (b) after subsection (1) insert—

(1A) A notice of objection under subsection (1) must provide the landlord’s reasons for objecting to the tenant’s carrying out of the improvement or to the manner in which the tenant proposes to carry it out including, in particular, by reference to the matters described in subsection (2B).

,

• (c) after subsection (2) insert—

(2A) In deciding whether or not to approve the carrying out of the improvement (or approve the improvement subject to conditions), the Land Court is to consider the matters set out in subsection (2B). (2B) The matters are— (a) whether the improvement is likely to (either or both)— (i) have a positive effect on the efficient management of the holding, (ii) facilitate or enhance sustainable or regenerative agricultural production on the holding, and (b) whether it is reasonable, in all the circumstances of the case, for the improvement to be carried out. (2C) The following improvements, unless the contrary is shown, are presumed to facilitate or enhance sustainable or regenerative agricultural production— (a) laying down permanent pasture, (b) making water-meadows, (c) warping or weiring land, (d) re-wetting wetlands, (e) creating silvopasture and silvoarable systems, (f) restoring peatland, (g) erecting, altering or enlarging buildings, facilities or other structures required for the creation or storage of energy— (i) from a renewable source (such as a wind turbine or solar panel), and (ii) which is primarily to be used on the holding.

.

• (10) In section 73 (power of the Secretary of State to vary schedules 5 and 6)—

• (a) before subsection (1) insert—

(A1) Without prejudice to subsection (1), the Scottish Ministers may by regulations modify section 39(2C) and paragraphs 2, 4 and 5 of schedule 5 to add, amend or remove an improvement.

,

• (b) in subsection (2)—

• (i) after “order” in the first place in which it appears, insert “or regulations”,

• (ii) after “takes” insert “or, as the case may be, regulations take”,

• (iii) after “order” in the last place in which it appears, insert “or regulations”,

• (c) in subsection (3)—

• (i) after “order” in the first place in which it appears, insert “or regulations”,

• (ii) after “comes” insert “or, as the case may be, regulations come”,

• (iii) after “order” in the last place in which it appears, insert “or regulations”,

• (d) after subsection (3) insert—

(3A) Regulations under this section are subject to the negative procedure (see section 28 of the Interpretation and Legislative Reform (Scotland) Act 2010).

,

• (e) the section title becomes “Compensation for improvements: power to modify lists”.

• (11) For schedule 5 substitute—

Schedule 5 (1) An improvement which makes a change to land or fixed equipment on the holding that— (a) means that the land or fixed equipment affected by the change cannot, or is unlikely to, return to its former agricultural use, or (b) otherwise, has a long term or significant impact on the management of the holding (as a whole). (2) For example, improvements for which consent may be required include— (a) irrigating land, (b) making or planting osier beds, (c) making or planting of short rotation coppice, (d) making water-meadows, (e) warping or weiring land, (f) creating silvopasture and silvoarable systems, (g) restoring peatland, (h) haulage or other work done by the tenant in aid of the carrying out of any improvement made by the landlord for which the tenant is liable to pay increased rent. (3) An improvement which makes a change to land or fixed equipment on the holding that does not have a long term or significant impact on the management of the holding (as a whole). (4) For example, improvements for which prior notice may be required include— (a) land drainage, (b) laying down permanent pasture, (c) re-wetting wetlands, (d) the construction of silos, (e) making or improving farm access or service roads, bridges and fords, (f) making or improving watercourses, ponds or wells, (g) works for the application of water power for agricultural or domestic purposes or for the supply of water for such purposes, (h) making or removing permanent fences, stone dykes and gates, (i) reclaiming waste land, (j) making or renewing embankments, sluices and other flood-prevention measures, (k) providing stells, fanks, folds, dippers, pens and bughts necessary for the proper conduct of the holding, (l) planting or renewing shelterbelts, (m) the installation, provision, distribution or storage of electricity, gas, power, heat or light, (n) erecting, altering or enlarging buildings, facilities or other structures including, in particular, for— (i) closed loop production in a controlled environment including hydroponics, glass houses and vertical farming, (ii) processing agricultural products from the holding or any larger business of which the holding forms part, (iii) the management or storage of slurries or manures, (iv) the creation or storage of energy, which is primarily to be used on the holding, from a renewable source (such as a wind turbine or solar panel), (o) making or improving permanent yards, loading banks and stocks, (p) erecting hay or sheaf sheds, sheaf or grain drying racks, and implement sheds, (q) providing fixed threshing mills, barn machinery and fixed dairying plant, (r) provision of means of sewage, waste or pollutant disposal, or provision of means of managing water on land, (s) repairing fixed equipment, being equipment reasonably required for the efficient farming of the holding, other than repairs which the tenant is under an obligation to carry out, (t) providing means to store silage, (u) works to dwellings, (v) making gardens, (w) planting orchards, fruit bushes, vines and other such plants. (5) The improvements for which no consent or notice is required are— (a) protecting trees grown for agricultural purposes against animals including, in particular, fruit trees, shelterbelts and those grown for silvopasture or silvoarable systems, (b) creating species-rich pasture, (c) converting the holding (or a significant part of it) to a standard of organic farming that is capable of being accredited by a recognised accreditation organisation, (d) improving soil health, structure or condition including, in particular, by— (i) clay burning, (ii) liming (including chalking) land, (iii) marling or claying land, (iv) applying soil improvers, conditioners, digestates, manure or fertiliser, whether organic or inorganic, to the land, (e) improving permanent pasture by cultivation and re-seeding, (f) control of bracken, whins or broom growing on the holding at the commencement of the tenancy, (g) removing tree roots, boulders, stones or other similar obstacles to cultivation from arable land or from permanent grass land, (h) forming hedges, (i) creating field margins, including uncropped field margins, to provide or improve habitats for wild animals, insects and birds, (j) the consumption on the holding of corn (whether produced on the holding or not) or of cake or other feeding stuff not produced on the holding by horses, cattle, sheep, pigs or poultry, (k) laying down temporary pasture with clover, grass, lucerne, sainfoin, or other seeds, sown more than 2 years prior to the termination of the tenancy, in so far as the value of the temporary pasture on the holding at the time of quitting exceeds the value of the temporary pasture on the holding at the commencement of the tenancy for which the tenant did not pay compensation.

.

• (12) The Agricultural Holdings (Scotland) Act 2003 is modified by subsections (13) to (17).

• (13) In section 10 (increase in rent: landlord’s improvements), in subsection (1), after “one” insert “of a kind referred to or”.

• (14) In section 10A (landlord improvement notices), in subsection (3), after second “improvement” insert “of a kind referred to or”.

• (15) In section 45 (right to compensation for improvements)—

• (a) in subsection (2), after “improvements” insert “of a kind referred to or”,

• (b) in subsection (3), for “32” substitute “5(k)”,

• (c) in subsection (5)—

• (i) after “order”, in the first place in which it appears, insert “or regulations”,

• (ii) after “comes” insert “or, as the case may be, regulations come”,

• (iii) after “order”, in the last place in which it appears, insert “or regulations”.

• (16) In section 48 (consent required for compensation in certain cases), for “specified in Part I” substitute “of a kind referred to in paragraph 1”.

• (17) In section 49 (notice required for certain improvements), in subsection (1), for “specified in Part II” substitute “of a kind referred to in paragraph 3”.

• (18) The Land Reform (Scotland) Act 2016 is modified by subsection (19).

• (19) In section 27 (Tenant Farming Commissioner: codes of practice), in subsection (2)(b), for “and recording” substitute “, recording and compensating”.

Use of agricultural land: diversification

26

• (1) The Agricultural Holdings (Scotland) Act 2003 is modified as follows.

• (2) In section 40 (notice of an objection to diversification)—

• (a) in subsection (2), after paragraph (b) insert—

(ba) any environmental benefit that is intended to be provided in using the land for that purpose;

,

• (b) after subsection (3) insert—

(3A) Where the tenant’s intended use of the land for the non-agricultural purpose is intended to provide an environmental benefit the notice must also specify how that benefit is to be provided.

,

• (c) in subsection (4), in the opening words, for “and (3)” substitute “to (3A)”,

• (d) in subsection (9)(a)—

• (i) in sub-paragraph (ii), for “land for agricultural purposes” substitute “whole of the land comprised in the lease for the purpose of sustainable and regenerative agriculture”,

• (ii) in sub-paragraph (iii), after “be” insert “substantially”,

• (e) in subsection (11), after paragraph (b) insert

, and explain, in that notification, why the landlord considers the grounds or, as the case may be, conditions, are reasonable.

,

• (f) after subsection (14) insert—

(15) The Scottish Ministers may by regulations— (a) modify subsection (2) so as to add or remove a matter which is to be specified in a notice of diversification, (b) modify subsection (9) so as to add or remove a ground for objection to the notice of diversification.

.

• (3) In section 91 (orders and regulations), in subsection (4)(b), after “38O(4),” insert “40(15),”.

27

• (1) The Agricultural Holdings (Scotland) Act 2003 is modified as follows.

• (2) After section 40 insert—

(40ZA) (1) A tenant may give an extension notice to the landlord. (2) An extension notice— (a) must— (i) be given in writing, (ii) specify the extension period, which is to be a period of 30 days beginning on the day the extension notice is given, (b) may not be given— (i) more than once in relation to the same notice of diversification, or (ii) after the landlord has made an application notice to the Land Court under section 40A(2). (3) Subsection (4) applies where an extension notice is given— (a) before the landlord has sent a notice of objection under section 40(11), and (b) before the expiry of the period mentioned in section 40(12). (4) Where this subsection applies— (a) the references in paragraphs (a) and (b) of section 40(12) to a period of 60 days are to be read, in both cases, as if they were a reference to a period of 90 days, (b) the reference in section 40A(3) to the period of 60 days is to be read as if it were a reference to a period of 90 days. (5) Where an extension notice is given after the landlord has sent a notice of objection to the tenant under section 40(11), the reference in section 40A(3) to the period of 60 days is to be read as if it were a reference to a period of 90 days.

.

28

• (1) The Agricultural Holdings (Scotland) Act 2003 is modified as follows.

• (2) In section 41 (imposition of conditions by Land Court), after subsection (3) insert—

(4) In deciding whether or not it is reasonable for the landlord to object to a notice of diversification or, as the case may be, to impose conditions, the Land Court is to— (a) consider if the intended use of the land for the non-agricultural purpose is likely to have a positive effect— (i) in facilitating or enhancing sustainable or regenerative agricultural production on the whole of the land comprised in the lease, (ii) on the environment generally, and (b) if the Land Court considers such positive effects are likely, whether those positive effects should outweigh any negative effects (including, in particular, any negative effects mentioned in sub-paragraphs (i) to (iii) of section 40(9)(a)).

.

29

• (1) The Agricultural Holdings (Scotland) Act 1991 is modified as follows.

• (2) In section 45A(7)(a) (compensation arising as a result of diversification and cropping of trees) for “land is unsuitable for use for agriculture by an incoming tenant” substitute “use of the whole of the land comprised in the holding for the purposes of sustainable and regenerative agriculture by an incoming tenant has been substantially prejudiced”.

Tenant Farming Commissioner: codes of practice

30

• (1) The Land Reform (Scotland) Act 2016 is modified as follows.

• (2) In section 27(2) (Tenant Farming Commissioner: codes of practice), after paragraph (ea) (as inserted by section 15(12) of this Act) insert—

(eb) the process for resuming land comprised in a lease constituting a relevant tenancy or comprising a small landholding, (ec) the process for terminating a tenancy to which the 1991 Act applies where a notice to quit has been served which the tenant cannot contest through the counter-notice process under section 22(1) of that Act,

.

31

• (1) The Land Reform (Scotland) Act 2016 is modified as follows.

• (2) In section 27(2) (Tenant Farming Commissioner: codes of practice)—

• (a) the word “and” immediately preceding paragraph (i) is repealed,

• (b) after paragraph (i) insert

, and (j) the use of land for non-agricultural purposes.

.

Game damage etc.

32

• (1) The Agricultural Holdings (Scotland) Act 1991 is modified as follows.

• (2) For section 52 (compensation for damage by game) substitute—

(52) (1) This section applies where neither the tenant of an agricultural holding or any other person with a right in the holding deriving from the tenant has— (a) the right to kill and take game, or (b) written permission from the landlord to do so. (2) The tenant is entitled to be compensated by the landlord where game or game management have caused the tenant to sustain (whether directly or indirectly)— (a) damage to crops grown, or seeds sown, for agricultural, or permitted non-agricultural, purposes, (b) damage to trees grown for agricultural, or permitted non-agricultural, purposes, (c) damage to fixed equipment, (d) damage to livestock, (e) damage to habitats. (3) Compensation is not recoverable under subsection (2) unless— (a) notice in writing is given to the landlord in such form and manner as may be prescribed as soon as reasonably practicable after the damage or injury was first observed by the tenant, (b) a reasonable opportunity is given to the landlord to inspect the damage— (i) in the case of damage to a growing crop, before work to reap, raise or consume the crop has begun, (ii) in the case of damage to a crop reaped or raised, before work to remove the crop from the land has begun, (iii) in the case of damage to a growing tree, before the tree is cropped or cut for timber, (iv) in the case of damage to a tree cropped or cut, before work to remove the timber or tree from the land has begun, (v) in the case of damage to fixed equipment, before any repairs to the equipment are carried out (unless the tenant has reasonable cause to believe that delaying repairs is likely to cause further damage or injury), (vi) in the case of damage to livestock, before any action in relation to the livestock is carried out (unless subsection (4) applies), (vii) in the case of damage to habitats, before any action is taken to repair the damage to the habitat, and (c) notice in writing of the claim is given to the landlord in such form and manner as may be prescribed within 6 months of the giving of notice under paragraph (a). (4) This subsection applies if, in relation to the livestock— (a) the tenant has reasonable cause to believe that delaying action (including, for example, the destruction of the livestock in an appropriate and humane manner) is likely to cause— (i) the affected livestock further suffering or injury, (ii) the further spread of disease, or (b) any action is required by virtue of any statutory obligation (including, for example, the seizure or destruction of the livestock). (5) Where the right to kill and take the game is vested in some person other than the landlord, the landlord is entitled to be indemnified by that other person against all claims for compensation under this section. (6) It is for the Land Court to determine any question which arises as to— (a) a tenant’s entitlement to compensation under subsection (2), (b) the amount of compensation payable under that subsection, or (c) the landlord’s entitlement to be indemnified under subsection (5). (7) In this section— - “damage”, in relation to livestock, includes suffering, injury or disease, - “game” means deer, pheasants, partridges and grouse, - “game management” includes the killing and taking of game and any steps taken or not taken by a person in connection with the exercise of a right to kill and take game, - “tree” includes— fruit trees, trees forming part of a shelterbelt, trees grown for silvopasture or silvoarable systems.

.

Introduction of standard procedure for claiming compensation

33

• (1) The Agricultural Holdings (Scotland) Act 2003 is modified as follows.

• (2) After section 59A insert—

(59B) (1) The Scottish Ministers may by regulations apply the standard claim procedure set out in schedule 3 to any relevant type of compensation. (2) Without limit to the generality of section 91(2), regulations under subsection (1) may— (a) apply the standard claim procedure with such modifications as the Scottish Ministers consider appropriate for the relevant type of compensation, (b) modify any enactment mentioned in subsection(3) to adjust or remove any notification requirement, time limit or other procedural aspect provided for in respect of making or responding to a claim for such compensation, (c) specify any matter which must be taken into account, to which regard is to be had or, as the case may be, which is to be disregarded in assessing the value of the relevant type of compensation, (d) make transitional or transitory provision in respect of ongoing claims for the relevant type of compensation. (3) For the purposes of this section, a “relevant type of compensation” is a type of compensation to which a party to a lease of agricultural land is entitled under— (a) a provision of the 1991 Act, (b) a provision of this Act, (c) any other enactment which confers a right to compensation under a 1991 Act tenancy, a short limited duration tenancy, a limited duration tenancy, modern limited duration tenancy or a repairing tenancy. (4) The Scottish Ministers may by regulations modify the standard claim procedure set out in schedule 3.

.

• (3) In section 91 (orders and regulations), in subsection (4)(b), after “59A,” insert “59B(1) or (4),”.

• (4) After schedule 2 (as inserted by section 21(6) of this Act) insert—