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Land Reform (Scotland) Act 2025

Type Act of the Scottish Parliament

Publication 2025-12-16

Last updated 2026-03-16

State In force

Jurisdiction Scotland

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

(ii) the date on which the landlord notifies the landholder of the withdrawal under sub-paragraph (2)(a), and

(b) the landlord may not make an application to the Land Court under paragraph 23 (2) in relation to the proposal.

22

(1) This paragraph applies where a landlord imposes conditions on a small landholder in relation to the implementation of a diversification proposal under paragraph 19 (4) or 21 (2)(b).

(2) The landlord may, within the period of 60 days beginning with the day on which the conditions are notified to the landholder—

(a) withdraw the conditions, or

(b) modify the conditions.

(3) The landlord must notify the landholder in writing that the conditions are withdrawn or (as the case may be) modified.

(4) Where the landlord modifies the conditions under sub-paragraph (2)(b), the landlord must notify the landholder in writing of—

(a) the modifications to the conditions and the reasons for making them, and

(b) why the landlord considers the conditions, as modified, are reasonable.

23

(1) This paragraph applies where a landlord notifies a small landholder under paragraph 19 (1)(b) that the landlord objects to a diversification proposal.

(2) The landlord may, within the period mentioned in sub-paragraph (3), apply to the Land Court for a determination that the objection is reasonable.

(3) That period is the period of 60 days beginning with the day on which the objection is notified under paragraph 19 (1)(b).

(4) The Land Court may determine that the objection is—

(a) reasonable, or

(b) unreasonable.

(5) Where the Land Court determines that the objection is reasonable, the landholder may not implement the proposal.

(6) Where the Land Court determines that the objection is unreasonable, the Court—

(a) must—

(i) approve the proposal, and

(ii) determine the date from which the proposal may be implemented, and

(b) may impose on the landholder such reasonable conditions in relation to the implementation of the proposal as it considers appropriate.

(7) In deciding whether or not it is reasonable for the landlord to object to a notice of diversification, the Land Court is to—

(a) consider if the intended use of the land for the diverse purpose is likely to have a positive effect on the environment, and

(b) if the Land Court considers such positive effects are likely, whether those positive effects outweigh any negative effects (including, in particular, any negative effects mentioned in paragraph 19 (3)(a)(i) to (iii)).

(8) Where the landlord does not make an application under sub-paragraph (2) (and does not withdraw the objection under paragraph 21 (1))—

(a) the proposal is to be treated as having been agreed to by the landlord on the expiry of the period mentioned in sub-paragraph (3) (as read with paragraph 20 (5)), and

(b) the proposal may be implemented from the later of—

(i) the date specified in the notice of diversification under paragraph 17 (2)(d), and

(ii) the date on which the proposal is treated as having been agreed to.

(9) Where the landlord withdraws or abandons an application under sub-paragraph (2)—

(a) the proposal is to be treated as having been agreed to by the landlord on the day on which the application is withdrawn or treated as having been abandoned, and

(b) the proposal may be implemented from the later of—

(i) the date specified in the notice of diversification under paragraph 17 (2)(d), and

(ii) the date on which the proposal is treated as having been agreed to.

(10) An application purportedly made under sub-paragraph (2) after the end of the period mentioned in sub-paragraph (3) (as read with paragraph 20 (5)) is to be treated as not having been made (and the Land Court may not make a determination under this paragraph in respect of it).

24

(1) This paragraph applies where the landlord and the small landholder of a small landholding enter into a diversification agreement—

(a) after the landlord makes an application to the Land Court under paragraph 23 (2), but

(b) before the Land Court makes a determination in relation to that application under paragraph 23 (4).

(2) The Land Court may, on the application of the landlord or the landholder, instead of determining the application under paragraph 23 (4), determine that the diversification proposal to which the application relates—

(a) is not approved by the Court, and

(b) accordingly, is not to be implemented.

(3) But nothing in sub-paragraph (2) prevents a landholder using land in accordance with the diversification agreement.

Application by landholder to Land Court to remove conditions

25

(1) Where a landlord imposes a condition on a small landholder under paragraph 19 (4) or 21 (2)(b), the landholder may, before the end of the period mentioned in sub-paragraph (2), apply to the Land Court for a determination that the condition is unreasonable.

(2) That period is 60 days beginning with the day on which notification of the conditions is given under paragraph 19 (5)(b) or (as the case may be) 21 (3).

(3) Where a landlord modifies a condition under paragraph 22 (2), the landholder may, before the end of the period mentioned in sub-paragraph (4), apply to the Land Court for a determination that the condition as modified is unreasonable.

(4) That period is 60 days beginning with the day on which notification of the modification is given under paragraph 22 (3).

(5) In deciding whether or not a condition is unreasonable, the Land Court is to—

(a) consider if the intended use of the land for the diverse purpose is likely to have a positive effect on the environment, and

(b) if the Land Court considers such positive effects are likely, whether those positive effects outweigh any negative effects (including, in particular, any negative effects mentioned in paragraph 19 (3)(a)(i) to (iii)) to which the condition relates.

(6) Where, on an application under sub-paragraph (1) or (3), the Land Court determines that the condition is unreasonable, the Court may—

(a) remove the condition, and

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

26

(1) A small landholding does not cease to be a small landholding by reason only that the land comprising the holding, or part of it, is used for a diverse purpose if the use of the land for that purpose is in accordance with a diversification agreement or an authorised diversification proposal.

(2) Any term of the lease of the holding which prohibits the use of the land comprising the holding, or part of it, for a diverse purpose is of no effect in relation to the use of the land in accordance with a diversification agreement or an authorised diversification proposal.

(3) In this paragraph, “authorised diversification proposal” means a diversification proposal which is—

(a) agreed to by a landlord under this Part, or

(b) approved by the Land Court under paragraph 23 (6)(a)(i).

27

In this Part—

“diverse purpose” has the meaning given by paragraph 16 (2),

“diversification agreement” means an agreement under paragraph 16 (1),

“diversification proposal” has the meaning given by paragraph 17 (6),

“notice of diversification” has the meaning given by paragraph 17 (1).

Part 5 — Disposal of holding by small landholder

Chapter 1 — Renunciation

28

(1) A small landholder may, on giving 1 year’s written notice to the landlord, renounce the landholder’s tenancy with effect as from any term of Whitsunday or Martinmas.

(2) But where sub-paragraph (3) applies, unless the landlord agrees otherwise, the tenancy may be renounced only with effect as from the same term of Whitsunday or Martinmas from which it took effect.

(3) This sub-paragraph applies where, immediately before the coming into force of paragraph 1, the tenancy is held by a new landholder, or the successor of a new landholder, for the purposes of section 2(1) of the Small Landholders (Scotland) Act 1911.

Chapter 2 — Assignation

29

(1) A small landholder may assign the landholder’s interest in a small landholding to any one of the persons mentioned in sub-paragraph (2) if, following notice under sub-paragraph (4), the landlord of the holding consents to the proposed assignation.

(2) The persons referred to in sub-paragraph (1) are—

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

(b) a spouse or civil partner of—

(i) a landholder’s descendant,

(ii) a landholder’s sibling,

(i) that person’s sibling,

(ii) a spouse or civil partner of such a sibling,

(iii) a descendant of such a sibling.

(3) For the purpose of sub-paragraph (2)—

(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 sub-paragraph (2)(a) is to be read as if the rules of intestacy applied accordingly).

(4) A landholder who intends to assign the interest in a holding by virtue of this paragraph must—

(a) give the landlord of the holding notice in writing (referred to in this schedule as a “notice of proposed assignation”) at least 70 days prior to the date on which the assignation takes effect, and

(b) specify in the notice—

(i) the particulars of the proposed assignee (including the proposed assignee’s relationship to the landholder),

(ii) the terms upon which the assignation is to be granted, and

(iii) the date on which the assignation is to take effect.

(5) A landlord who is given a notice of proposed assignation is deemed to consent to the proposed assignation unless, within the period of 28 days beginning with the date on which the notice is given, the landlord gives the landholder a notice in writing—

(a) indicating that consent to the proposed assignation is withheld, and

(b) setting out the landlord’s grounds for withholding consent (see paragraph 30).

(6) Any term of a lease or of an agreement between a landlord and a small landholder which purports to provide that the landholder’s interest in the holding may not be assigned in accordance with this paragraph, or in accordance with an order of the Land Court under paragraph 30 (6), is, in so far as it so purports, null and void.

30

(1) Where an assignation is proposed in accordance with paragraph 29 and the proposed assignee is a near relative of the small landholder, the only grounds on which the landlord of the small landholding may withhold consent are that—

(a) the person is not of good character,

(b) the person does not have sufficient resources to be able to cultivate the holding with reasonable efficiency, or

(c) the person has neither sufficient training nor sufficient experience to be able to cultivate the holding with reasonable efficiency.

(2) But the ground of objection in sub-paragraph (1)(c) does not apply where the person—

(a) is engaged in or will begin, before the end of the period of 6 months beginning with the date on which the notice of proposed assignation is given, a course of relevant training in cultivation of land which the person is expected to complete satisfactorily within 4 years from that date, and

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

(3) Where an assignation is proposed in accordance with paragraph 29 (1) and the proposed assignee is not a near relative of the landholder, the landlord of the holding may withhold consent if there are reasonable grounds for doing so.

(4) In particular, the landlord has reasonable grounds for withholding consent where the proposed assignee—

(a) would not have the ability to pay—

(i) the rent due in respect of the holding, or

(ii) for adequate cultivation of the holding, or

(b) does not have the skills or experience that would be required properly to cultivate the holding.

(5) If a landlord gives a notice under paragraph 29 (5) withholding consent to a proposed assignation, the landholder may, within the period of 28 days beginning with the date on which that notice is given, apply to the Land Court for an order authorising the proposed assignation.

(6) If, on the hearing of such an application, the Land Court is satisfied that none of the grounds for withholding consent set out in the notice under paragraph 29 (5) are reasonable, it must make an order authorising the proposed assignation.

(7) In any other case, the Land Court must dismiss the application.

(8) A decision of the Land Court under this paragraph is final.

(9) For the purposes of this paragraph and paragraphs 33 and 34, a near relative, in relation to a small landholder, means—

(a) a landholder’s parent,

(b) in relation to a landholder’s child—

(i) that child,

(ii) that child’s spouse or civil partner,

(iii) a descendant of that child,

(i) that sibling,

(ii) that sibling’s spouse or civil partner,

(iii) a descendant of that sibling,

(d) in relation to a landholder’s spouse or civil partner—

(i) that spouse or civil partner,

(ii) that spouse or civil partner’s sibling,

(iii) a spouse or civil partner of such a sibling,

(iv) a descendant of such a sibling.

(10) For the purpose of sub-paragraph (9)—

(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.

Chapter 3 — Succession

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(1) A small landholder may, by will or other testamentary writing, bequeath the landholder’s interest in a small landholding to any one of the persons mentioned in sub-paragraph (2).

(2) The persons referred to in sub-paragraph (1) are—

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

(b) a spouse or civil partner of—

(i) a landholder’s descendant,

(ii) a landholder’s sibling,

(i) that person’s sibling,

(ii) a spouse or civil partner of such a sibling,

(iii) a descendant of such a sibling.

(3) For the purpose of sub-paragraph (2)—

(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 is to be treated as being the same as a child or, as the case may be, sibling (and sub-paragraph (2)(a) is to be read as if the rules of intestacy applied accordingly).

(4) Sub-paragraph (5) applies where a person to whom a small landholder’s interest in a holding is bequeathed (referred to in this schedule as the “legatee”) accepts the bequest.

(5) The legatee must give the landlord of the holding written notice of the bequest and the legatee’s acceptance of it—

(a) before the end of the period of 21 days beginning with the date of death of the landholder, or

(b) where the legatee is unavoidably unable to give notice within the period specified in paragraph (a), as soon as practicable thereafter.

(6) A notice under sub-paragraph (5) must specify the legatee’s relationship to the deceased landholder.

(7) Unless a counter-notice is given by the landlord in accordance with paragraph 33 (2) or 34 (2), the giving of a notice under sub-paragraph (5) has the effect of making the deceased landholder’s lease of the holding binding on the landlord and the legatee, as landlord and small landholder respectively, from the date of the deceased’s death.

32

(1) A small landholder’s interest in a small landholding is, on the landholder’s death, to be treated as intestate estate of the deceased in accordance with Part 1 of the Succession (Scotland) Act 1964 where—

(a) it is not the subject of a valid bequest by the deceased, or

(b) it is the subject of such a bequest, but the bequest—

(i) is not accepted by the legatee,

(ii) is the subject of a counter-notice under paragraph 34 (2) declaring it to be null and void, and either no appeal is made to the Land Court within the period permitted for doing so or any such appeal is withdrawn, or

(iii) is declared, or confirmed, to be null and void by the Land Court under paragraph 33 (6)(a) or 34 (5).

(2) A person to whom a landholder’s interest in a small landholding is transferred under section 16 of the Succession (Scotland) Act 1964 (referred to in this schedule as “the acquirer”) must give written notice of the acquisition to the landlord of the holding—

(a) before the end of the period of 21 days beginning with the date of acquisition of the interest in the holding, or

(b) where the acquirer is unavoidably unable to give notice within the period specified in paragraph (a), as soon as practicable thereafter.

(3) A notice under sub-paragraph (2) must specify the acquirer’s relationship to the deceased landholder.

(4) Unless a counter-notice is given by the landlord in accordance with paragraph 33 (2) or 34 (2), the giving of a notice under sub-paragraph (2) has the effect of making the deceased landholder’s lease of the holding binding on the landlord and the acquirer, as landlord and small landholder respectively, from the date on which the deceased landholder’s interest in the small landholding was transferred under section 16 of the Succession (Scotland) Act 1964.

33

(1) This paragraph applies where a landlord is given a notice under paragraph 31 (5) or 32 (2) by a legatee or (as the case may be) acquirer who is a near relative of the deceased.

(2) The landlord may, within the period of 28 days beginning with the day on which the notice is given, give the person a counter-notice—

(a) indicating that the landlord objects to the person’s succession to the small landholding, and

(b) setting out the landlord’s grounds for objecting.

(3) The only grounds on which the landlord may object to the person’s succession to the holding are that—

(a) the person is not of good character,

(b) the person does not have sufficient resources to be able to cultivate the holding with reasonable efficiency,

(c) the person has neither sufficient training nor sufficient experience to be able to cultivate the holding with reasonable efficiency.

(4) But the ground of objection in sub-paragraph (3)(c) does not apply where the person—

(a) is engaged in or will begin, before the end of the period of 6 months beginning with the date on which the notice under paragraph 31 (5) or 32 (2) is given, a course of relevant training in cultivation of land which the person is expected to complete satisfactorily within 4 years from that date, and

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

(5) If the landlord gives a counter-notice under sub-paragraph (2), the landlord may, within the period of 28 days beginning with the day on which the counter-notice is given, apply to the Land Court for an order—

(a) in the case of a legatee, declaring the bequest to be null and void,

(b) in the case of an acquirer, terminating the lease.

(6) If, on the hearing of such an application, a ground of objection set out in the counter-notice is established to the satisfaction of the Land Court, it must make an order—

(a) in the case of a legatee, declaring the bequest to be null and void,

(b) in the case of an acquirer, terminating the lease with effect as from such term of Whitsunday or Martinmas as the court specifies.

(7) In any other case, the Land Court must make an order declaring the deceased small landholder’s lease of the holding to be binding on the landlord and the legatee or (as the case may be) acquirer, as landlord and small landholder respectively—

(a) in the case of the legatee, from the date of the deceased landholder’s death,

(b) in the case of the acquirer, from the date on which the deceased landholder’s interest in the small landholding was transferred under section 16 of the Succession (Scotland) Act 1964.

(8) A decision of the Land Court under this paragraph is final.

(9) Where the landlord does not apply to the Land Court under sub-paragraph (5), the deceased landholder’s lease of the holding is to be binding on the landlord and the legatee or (as the case may be) acquirer, as landlord and small landholder respectively—

(a) in the case of the legatee, from the date of the deceased landholder’s death,

(b) in the case of the acquirer, from the date on which the deceased landholder’s interest in the small landholding was transferred under section 16 of the Succession (Scotland) Act 1964.

34

(1) This paragraph applies where a landlord is given a notice under paragraph 31 (5) or 32 (2) by a legatee or (as the case may be) acquirer who is not a near relative of the deceased.

(2) The landlord may, within the period of 28 days beginning with the day on which the notice is given, give the person a counter-notice—

(a) indicating that the landlord objects to the person’s succession to the small landholding,

(b) setting out the landlord’s grounds for objecting, and

(i) in the case of a legatee, declaring the bequest to be null and void, or

(ii) in the case of an acquirer, terminating the lease with effect as from such term of Whitsunday or Martinmas as the landlord specifies, being a term at least 1 year but no more than 2 years from the date of the counter-notice.

(3) If the landlord gives a counter-notice under sub-paragraph (2), the person to whom it is given may, within the period of 28 days beginning with the day on which the counter-notice is given, appeal to the Land Court.

(4) If, on the hearing of such an appeal, any reasonable ground stated by the person—

(a) in the case of a legatee, for not declaring the bequest to be null and void, or

(b) in the case of an acquirer, for not terminating the lease,

is established to the satisfaction of the Land Court, it must make an order quashing the counter-notice.

(5) In any other case, the Land Court must make an order confirming the counter-notice.

(6) Where the Land Court quashes a counter-notice under sub-paragraph (4), the deceased small landholder’s lease of the holding is, accordingly, to be binding on the landlord and the legatee or (as the case may be) acquirer, as landlord and small landholder respectively—

(a) in the case of the legatee, from the date of the deceased landholder’s death,

(b) in the case of the acquirer, from the date on which the deceased landholder’s interest in the small landholding was transferred under section 16 of the Succession (Scotland) Act 1964.

(7) A decision of the Land Court under this paragraph is final.

35

(1) From the date of the deceased small landholder’s death until the conclusion of any proceedings under paragraph 33 or 34, the legatee or (as the case may be) acquirer is entitled to possession of the small landholding in question.

(2) But sub-paragraph (1) does not apply—

(a) where the executor in whom the landholder’s interest in the lease is vested under section 14 of the Succession (Scotland) Act 1964 objects, or

(b) where, on the application of the landlord, the Land Court directs otherwise on cause shown.

(3) A decision of the Land Court under this paragraph is final.

Part 6 — Removal of small landholder

36

A small landholder may be removed from a small landholding only in accordance with an order made by the Land Court under paragraph 37 (removal for breach of conditions) or under paragraph 38 (resumption).

37

(1) The Land Court may, on the application of the landlord of a small landholding, make an order for the removal of the small landholder from the holding, if satisfied that one or more of the grounds for removal in sub-paragraph (2) is met.

(2) The grounds for removal are that the landholder has—

(a) failed to pay at least one year’s rent due in respect of the small landholding when it fell due,

(b) used the holding other than for—

(i) cultivation,

(ii) a subsidiary or auxiliary purpose that is reasonable and not inconsistent with the cultivation of the holding, or

(iii) a permitted diverse purpose (within the meaning of paragraph 11(3)),

(c) failed, subject to any permitted diverse purpose (within the meaning of paragraph 11(3)), to competently cultivate the holding resulting in the dilapidation of any buildings on the holding or deterioration of the soil,

(d) failed, in respect of any permitted diverse purpose (within the meaning of paragraph 11(3)), to comply with a condition imposed by the landlord or the Land Court under Part 4 in respect of that purpose,

(e) failed to permit the landlord or a person authorised by the landlord to exercise rights of access in pursuance of paragraph 13,

(f) erected or permitted the erection of a dwelling-house on the holding otherwise than in accordance with paragraph 12,

(g) breached a term of an agreement entered into in respect of the small landholding, being a term which is for the benefit of the landlord or neighbouring small landholders which the Land Court considers reasonable in its terms,

(h) sub-let the holding without the consent of the landlord,

(i) entered into an arrangement purporting to assign the landholder’s interest in the small landholding otherwise than in accordance with paragraphs 29 and 30, or

(j) become apparently insolvent within the meaning of section 16 of the Bankruptcy (Scotland) Act 2016.

(3) Before making an order under sub-paragraph (1) the court must have regard to any representations from the small landholder.

38

(1) The landlord of a small landholding may apply to the Land Court to resume all or part of the holding for a reasonable purpose related to the good of the holding or the landlord’s estate.

(2) For the purpose of sub-paragraph (1), “reasonable purpose” includes—

(a) using or letting the land proposed to be resumed for—

(i) the building of dwellings,

(ii) allotments,

(iii) harbours, piers, boat shelters or other like buildings,

(iv) places of religious worship,

(v) schools,

(vi) halls or community centres,

(vii) planting,

(viii) roads practicable for vehicular traffic from the holding to the public road or to the seashore,

(b) the protection of an ancient monument or other object of historical or archaeological interest from injury or destruction.

(3) A landlord cannot resume a small landholding for the purpose of personally residing on it.

(4) Where the Land Court is satisfied that the landlord has a reasonable purpose for the resumption, the Court may make an order—

(a) requiring the landholder to vacate the land which is to be resumed once the landlord has compensated the landholder in such manner as is specified in the order,

(b) making such other provision in relation to the resumption as the Court considers appropriate.

(5) For the purpose of sub-paragraph (2)(a), “public road” is to be construed in accordance with section 151 of the Roads (Scotland) Act 1984.

Part 7 — Compensation

Chapter 1 — Right to compensation

39

(1) Paragraphs 40 and 41 apply where—

(a) a small landholder is removed from a small landholding,

(b) a small landholder renounces the tenancy of a small landholding (see paragraph 28),

(c) a small landholder enters into a new tenancy, to which this schedule does not apply, of the land comprising the landholder’s small landholding, or

(d) in the case of a tenancy of a small landholding which forms part of the estate of a deceased small landholder, one of the conditions mentioned in sub-paragraph (2) is met.

(2) The conditions referred to in sub-paragraph (1)(d) are that—

(a) the tenancy is terminated by virtue of subsection (3) of section 16 of the Succession (Scotland) Act 1964,

(b) following transfer to an acquirer under that section, the tenancy is terminated by the Land Court under paragraph 33 (6), or

(c) following such transfer, the tenancy is the subject of a counter-notice under paragraph 34 (2) declaring it to be terminated and either—

(i) no appeal is made to the Land Court within the period permitted for doing so, or any appeal made is withdrawn, or

(ii) the Land Court confirms the counter notice under paragraph 34 (5).

(3) Where paragraphs 40 and 41 apply by reason of sub-paragraph (1)(d)—

(a) any compensation that arises under those paragraphs is due to—

(i) where the condition in sub-paragraph (2)(a) is met, the estate of the deceased landholder,

(ii) where the condition in sub-paragraph (2)(b) or (c) is met, the acquirer to whom the tenancy was transferred, and

(b) Chapter 3 applies to the executor or (as the case may be) the acquirer in respect of that compensation as if the person were a small landholder.

(4) For the purposes of sub-paragraph (1)(a) and (b), a landholder is not to be treated as having been removed from a small landholding or as having renounced a tenancy of it if the landholder continues in occupation of it under a new tenancy to which this schedule applies.

40

(1) The small landholder is entitled to compensation from the landlord of the small landholding where—

(a) a permanent improvement has been made to the holding,

(b) the improvement is suitable to the holding,

(d) either—

(i) the improvement was not made in order to comply with a specific written agreement, or

(ii) it was made for such a reason but fair consideration (by way of reduction of rent or otherwise) was not received for the improvement.

(2) The amount of compensation payable under sub-paragraph (1) is an amount equal to the value of the permanent improvement to an incoming tenant of the holding after deduction of the value of any consideration or assistance (financial or otherwise) given in respect of the improvement by the landlord, or the landlord’s predecessors in title, to the landholder or the landholder’s predecessors under the same tenancy.

(3) In this Part—

“permanent improvement” means— an improvement relating to— a dwelling-house, work carried out in implementation of an HRA action plan included in an HRA designation order made under section 1 of the Housing (Scotland) Act 2006 (Housing renewal areas: criteria), farm offices, subsoil or other drains, walls or fences, deep trenching, clearing the ground, planting trees, making piers or landing stages, roads suitable for pedestrian and vehicular traffic from the holding to a public road (as defined in section 151 of the Roads (Scotland) Act 1984) or the sea shore, any other improvement which the Land Court considers adds to the value of a holding to an incoming tenant,

“predecessor under the same tenancy” does not include a sub-tenant.

41

(1) The small landholder is entitled to compensation from the landlord of the small landholding where—

(a) during the tenancy, the use of any part of the holding, or a change to any part of it, for a purpose other than cultivation has increased the value of the holding from what it would otherwise have been,

(b) the use or change occurred wholly on or after the coming into force of this paragraph, and

(2) The amount of compensation payable under sub-paragraph (1) is an amount equal to the value of the use or change in question to an incoming tenant of the holding after deduction of—

(a) any benefit which the landlord or the landlord’s predecessor in title has given, or has agreed in writing to give, the landholder or the landholder’s predecessors under the same tenancy in consideration of the use or change in question, and

(b) any grant which has been or will be made to the landholder, or the landholder’s predecessors under the same tenancy, in respect of the use or change in question.

(3) But where an incoming tenant’s ability to use the whole of the land comprised in the holding for the purposes of cultivation is substantially prejudiced as a result of the use or change in question, no compensation is payable under sub-paragraph (1) unless the use or change has an environmental benefit.

42

(1) Paragraphs 43 and 44 apply where—

(a) a small landholder is removed from a small landholding,

(b) a small landholder renounces the tenancy of a small landholding (see paragraph 28),

(c) a small landholder enters into a new tenancy, to which this schedule does not apply, of the land comprising the landholder’s small landholding,

(d) a small landholder abandons the tenancy of a small landholding, or

(e) in the case of a tenancy of a small landholding which forms part of the estate of a deceased small landholder, one of the conditions mentioned in sub-paragraph (2) is met.

(2) The conditions referred to in sub-paragraph (1)(e) are that—

(a) the tenancy is terminated by virtue of subsection (3) of section 16 of the Succession (Scotland) Act 1964,

(b) following transfer to an acquirer under that section, the tenancy is terminated by the Land Court under paragraph 33 (5), or

(c) following such transfer, the tenancy is the subject of a counter-notice under paragraph 34 (2) declaring it to be terminated, and either—

(i) no appeal is made to the Land Court within the period permitted for doing so, or any appeal made is withdrawn, or

(ii) the Land Court confirms the counter notice under paragraph 34 (5).

(3) Where paragraphs 43 and 44 apply by reason of sub-paragraph (1)(e)—

(a) any compensation that arises under those paragraphs is due by—

(i) where the condition in sub-paragraph (2)(a) is met, the estate of the deceased landholder,

(ii) where the condition in sub-paragraph (2)(b) or (c) is met, the acquirer to whom the tenancy was transferred, and

(b) Chapter 3 applies to the executor or (as the case may be) the acquirer in respect of that compensation as if the person were a small landholder.

(4) For the purposes of sub-paragraph (1)(a) and (b), a landholder is not to be treated as having been removed from a small landholding or as having renounced a tenancy of it if the landholder continues in occupation of it under a new tenancy to which this schedule applies.

(5) Where a landholder abandons a tenancy of a small landholding, the tenancy is to be treated for the purposes of this Part as having been terminated.

43

(1) The landlord of the small landholding is entitled to compensation from the small landholder where—

(a) there is dilapidation, deterioration or damage to any part of the holding, or to anything in or on the holding, and

(b) the dilapidation, deterioration or damage is the result of the landholder, or the landholder’s predecessor under the same tenancy, failing to fulfil that person’s responsibility to cultivate the holding or to use it in accordance with a use or change authorised in accordance with Part 4.

(2) The amount of compensation payable under sub-paragraph (1) is whichever is the greater of—

(a) an amount equal to the amount (if any) by which the value of the holding is reduced from what it would have been without the dilapidation, deterioration or damage in question,

(b) the cost, as at the relevant date, of making good the dilapidation, deterioration or damage in question.

(3) For the purpose of sub-paragraph (2), the relevant date is—

(a) where the right to compensation arises due to renunciation or removal, whichever is the later of—

(i) the date of the landholder’s quitting the holding,

(ii) the date of termination of the tenancy,

(b) in any other case, the date of termination of the tenancy.

44

(1) The landlord of the small landholding is entitled to compensation from the small landholder where—

(a) during the tenancy, the use of any part of the holding, or a change to any part of it, for a purpose other than cultivation has reduced the value of the holding from what it would otherwise have been, and

(b) that use or change occurred wholly on or after the coming into force of this paragraph.

(2) Sub-paragraph (1) applies regardless of whether or not the use or change in question was authorised in accordance with Part 4.

(3) The amount of compensation payable under sub-paragraph (1) is an amount equal to the amount by which the value of the holding is reduced from what it would have been without the use or change in question.

45

(1) Compensation is recoverable by a landlord under paragraph 43 or 44 only where—

(a) at least 3 months prior to the termination of the tenancy, the landlord gives notice in writing to the small landholder of the landlord’s intention to claim compensation,

(b) the landholder abandons the small landholding, or

(2) Where a small landholder has remained in occupation of a small landholding during more than one tenancy, neither the landholder nor the landlord is deprived of a right to compensation under this Chapter by reason only that the thing which would give rise to the right to compensation occurred during a previous tenancy of the landholder’s.

Chapter 2 — Compensation: ancillary provision

46

Where compensation is due to a small landholder by a landlord under Chapter 1, any sum of rent due or to become due by the landholder in respect of the small landholding may be offset against that compensation.

47

(1) This paragraph applies where an incoming tenant of a small landholding (the “incoming landholder”) agrees with the outgoing small landholder of the holding (the “outgoing landholder”) and the landlord of the holding to take on the outgoing landholder’s rights and liabilities in respect of any rights to compensation which would otherwise arise under this Part.

(2) The incoming landholder is to be treated for the purposes of calculation of compensation under this Part as—

(a) having been in occupation of the holding as the landholder during the outgoing landholder’s tenancy, and

(b) having made or paid for any permanent improvements which were made or paid for by the outgoing landholder or the outgoing landholder’s predecessors under the same tenancy,

and, accordingly, the outgoing landholder has no right to, nor liability for, compensation under this Part.

48

(1) A landlord or a small landholder of a small landholding may, at any time during the tenancy of the holding, require a record of condition of the holding, or part of the holding, to be made.

(2) A record of condition is a record specifying some or all of the following—

(a) the condition of—

(i) the cultivation of the holding or (as the case may be) part of the holding,

(ii) anything in or on the holding,

(b) who has made or paid for any permanent improvements.

(3) A record of condition is to be made by a person appointed—

(a) by agreement by the landlord and the landholder, or

(b) by the Scottish Ministers on the application of either the landlord or the landholder.

(4) The cost of making a record of condition is payable jointly by the landlord and the landholder.

(5) Where a person is appointed by the Scottish Ministers to make a record of condition—

(a) the Scottish Ministers may charge such reasonable fee as they determine for making the appointment,

(b) the remuneration payable to the person making the record is such amount as the Scottish Ministers determine,

(c) any other expenses of, or incidental to, the making of the record are subject to taxation by the auditor of the sheriff court or, on review, by the sheriff,

(d) the landlord and the landholder are jointly and severally liable for the cost of making the record.

(6) The Land Court is, on an application being made to it by either party, to determine any dispute between the landlord and the landholder relating to the making of a record of condition.

Chapter 3 — Process for determination of compensation amount

49

(1) A landlord or small landholder may apply to the Tenant Farming Commissioner for an assessment of the amount of compensation due to or by a person under this Part in respect of a small landholding.

(2) An application under sub-paragraph (1) must be made no later than the end of the period of 3 months beginning with the date of termination of the tenancy of the holding.

(3) The Scottish Ministers may by regulations prescribe the form and content of an application under sub-paragraph (1).

50

(1) This paragraph applies where the Tenant Farming Commissioner is given an application under paragraph 49.

(2) The Commissioner must appoint a person (referred to in this Part as the “valuer”) to carry out the assessment mentioned in paragraph 53 (1).

(3) A person may be appointed as the valuer only where the person appears to the Commissioner—

(a) to be independent of the landlord and the small landholder, and

(b) to possess qualifications, knowledge and experience suitable for assessing the compensation that may be payable to landlords and landholders of small landholdings.

(4) The valuer must be appointed before the end of the period of 28 days beginning with the date on which the application is given.

(5) The Commissioner must give notice in writing to the landlord and the landholder of the name and address of the valuer appointed under sub-paragraph (2).

(6) The Scottish Ministers may by regulations modify the period specified in sub-paragraph (4).

51

(1) The small landholder 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 valuer appointed under paragraph 50 (2) on the grounds that the valuer so appointed (either or both)—

(a) is not independent of the landlord or (as the case may be) the landholder,

(b) does not possess the qualifications, knowledge and experience mentioned in paragraph 50 (3)(b).

(2) An application under sub-paragraph (1)—

(a) must—

(i) be made before the end of the period of 14 days beginning with the date on which notice of the appointment was given to the landlord or, as the case may be, landholder under paragraph 50 (5), and

(ii) state the ground of objection to the valuer appointed by the Commissioner, and

(b) may propose a person to be appointed as the valuer in place of the valuer appointed by the Commissioner.

(3) The Land Court may, on an application under sub-paragraph (1)—

(a) refuse the application, or

(b) allow the application and appoint another person as the valuer (whether a person proposed in the application or not).

(4) The decision of the Land Court on an application under sub-paragraph (1) is final.

52

(1) Where a valuer is appointed under paragraph 50 (2) or 51 (3)(b), the person responsible for meeting the expenses incurred in carrying out the valuer’s functions under this Part is—

(a) where the compensation award is in a person’s favour, the person by whom the compensation is payable,

(b) where there is no compensation award, the person who made the application under paragraph 49 (1).

(2) Where, in the case of a valuer appointed under paragraph 50 (2), those expenses have been met by the Commissioner, the Commissioner is entitled to recover them from the person by whom they are payable under sub-paragraph (1).

(3) For the purpose of sub-paragraph (1), a compensation award is in a person’s favour where, ignoring the effect of paragraph 46, the compensation payable to the person under this Part exceeds the compensation payable by the person under it.

53

(1) The valuer is to assess the amount of compensation to which the landlord or (as the case may be) small landholder is entitled under Chapter 1.

(2) The valuer is, prior to carrying out the assessment under sub-paragraph (1), to—

(a) invite the landlord and the landholder to make written representations about the assessment, and

(b) have regard to any such representations.

(3) For the purposes of any assessment under sub-paragraph (1), the valuer may—

(a) enter onto land, and

(b) require the landlord and landholder to comply with any reasonable request made by the valuer.

(4) The Scottish Ministers may by regulations modify this paragraph so as to specify the basis on which the valuer is to assess the compensation payable and the consideration to be given to certain matters by the valuer in doing so.

(5) Before laying a draft of a Scottish statutory instrument containing regulations under sub-paragraph (4) before the Scottish Parliament, the Scottish Ministers must consult such persons as they consider appropriate.

54

(1) The valuer must—

(a) give a notice in writing (referred to in this Part as a “notice of assessment”) to—

(i) the small landholder, and

(ii) the landlord, and

(b) at the same time, give a copy of the notice to the Tenant Farming Commissioner.

(2) The notice of assessment must be given before the end of the period of 8 weeks beginning with—

(a) the day after the day on which the period for applying under paragraph 51 (1) to appoint a different person as the valuer ends without such an application being made, or

(b) where such an application is made—

(i) the date of the Land Court’s decision on it, or

(ii) the date on which the application is withdrawn.

(3) A notice of assessment must—

(a) specify the amount, assessed under paragraph 53, of compensation—

(i) to which the landholder is entitled under paragraphs 40 and 41,

(ii) to which the landlord is entitled under paragraphs 43 and 44,

(b) specify the date of valuation of each of the amounts mentioned in paragraph (a),

(d) be dated.

(4) The notice may also contain or be accompanied by any other information that the valuer considers appropriate.

55

(1) The small landholder 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 end of the period of 21 days beginning with the date on which the notice of assessment is given.

(3) The Lands Tribunal may reassess the amount of compensation assessed under paragraph 53 (and any factor affecting the amount).

(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 landholder, the following persons are entitled to be heard—

(a) where the landlord is a creditor in a standard security, the owner of the small landholding,

(b) where the landlord is the owner of the small landholding, any creditor in a standard security over the holding 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.

56

(1) This paragraph applies where, in an appeal before the Lands Tribunal under paragraph 55, an issue of law arises which may competently be determined by the Land Court by virtue of section 1(6) of the Scottish Land Court Act 1993 or this Act.

(2) 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 8 — Right to buy

57

(1) In this Part—

“Keeper” means the person who keeps the Register of Community Interests in Land under section 36 of the Land Reform (Scotland) Act 2003,

“Register” means that Register.

(2) The Keeper is to keep the Register so that there is contained in it a part for registering small landholders’ interests in buying land in accordance with paragraph 58.

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

(a) a record of any notice or notification given to the Keeper under this Part, and

(b) where the registration of a landholder’s interest in buying land is removed under paragraph 60 (4), an entry specifying the date on which that is effected.

58

(1) A small landholder may apply to have registered an interest in buying the land comprising the landholder’s small landholding by giving a notice (a “notice of interest”) to the Keeper.

(2) The notice of interest must—

(a) be in such form as the Scottish Ministers may prescribe by regulations, and

(b) specify—

(i) the particulars of the landholder and the owner of the land,

(ii) the location and boundaries of the land (by reference, where appropriate, to the lease of the holding or any map or drawing),

(iii) any interest or rights comprised in the land (including any sporting or mineral rights), and

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

(3) The landholder must—

(a) give a copy of the notice of interest to the owner of the land, and

(b) notify the Keeper that the copy has been so given.

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

(a) register—

(i) the landholder’s interest in buying the land,

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

(iii) the date of registration, and

(b) give an extract of the registration to the landholder and the owner of the land.

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

(a) intimate that fact to the landholder, and

(b) give a copy of the extract to the creditor in the standard security within the period of 28 days beginning with the day on which the owner is given the extract.

(6) The Keeper may charge such reasonable fee as the Scottish Ministers may by regulations specify for—

(a) registering landholders’ interests in buying land, and

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

59

(1) This paragraph applies where the Keeper gives the owner of land comprising a small landholding, under paragraph 58 (4)(b), an extract of the registration of the small landholder’s interest in buying the land comprising the holding.

(2) The owner may, by notice in writing to the Keeper, challenge the registration on the grounds that any matter contained in the extract is inaccurate.

(3) On receipt of notice under sub-paragraph (2), the Keeper is to make such enquiry in connection with the landholder’s interest as the Keeper considers appropriate.

(4) If, following such an enquiry, the Keeper considers that the notice of interest is inaccurate, the Keeper—

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

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

(5) Where, under sub-paragraph (4)—

(a) the registration is rescinded, the Keeper must intimate that fact to the landholder and the owner,

(b) the registration is amended, the Keeper must give an extract of the registration to the landholder and the owner.

(6) The landholder or the owner may appeal to the Land Court against any decision made, following notice under sub-paragraph (2), by the Keeper in respect of the registration.

(7) The Court may make such order as it considers appropriate in an appeal under sub-paragraph (6).

60

(1) The registration under paragraph 58 (4)(a) of a small landholder’s interest in buying land—

(a) continues to have effect only in relation to such land as remains comprised in the landholder’s small landholding, and

(b) ceases to have effect—

(i) if the registration is rescinded under paragraph 59 (4)(a),

(ii) if the landholder’s tenancy of the land is terminated, or

(iii) where neither of those things has occurred, at the end of the period of 5 years beginning with the date of registration.

(2) The owner of the land must give notice in writing to the Keeper where—

(a) the landholder’s tenancy of the land is terminated during the period mentioned in sub-paragraph (1)(b)(iii), or

(b) there is a reduction in the land comprising the holding during that period.

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