1991 Act agricultural tenancies

A tenant is likely to have a 1991 Act agricultural tenancy if:

• they rent an agricultural holding, and

• their lease began before 2003, or

• their lease began after 2003 but was drawn up before the tenancy started and expressly states in writing that the tenancy will be regulated by the Agricultural Holdings (Scotland) Act 1991, [1] and

• they do not have a short let for grazing or mowing (a lease of less than 364 days, held during a specified period of the year), [2] and

• the tenant is not employed by their landlord. [3]

The tenant does not need to live on the holding itself to be an agricultural tenant. [4] Nor do they need to use the land for agricultural purposes (see the section on diversification for further information). [5]

1991 Act agricultural tenants have the following rights:

• The right to a written lease.

• In certain situations, the right to remain living and working on the holding after the lease has expired (the section on eviction explains this in more detail).

• If they are required to give up the tenancy, the right to receive compensation for any improvements carried out, and possibly other compensation payments also.

• The right to use the land for non-agricultural purposes.

• The right to assign the tenancy to a spouse, civil partner or close relative.

• The right to bequeath the tenancy to a spouse, civil partner or close relative.

• The right to buy the holding, if the landlord decides to sell, provided the tenant has registered their interest in buying the land.

These rights are explained in more detail in the page on subletting, assignation and succession, and the page on the right to buy.

Before the tenancy starts, the landlord should provide the tenant with a written lease, setting out the terms and conditions of the tenancy. If they do not, or if the existing written lease does not contain all the provisions required (see below) or contains terms and conditions that are inconsistent with these provisions, the tenant can request a new lease, which the landlord must supply within six months. If the landlord refuses, or if the landlord and tenant cannot agree on the terms and conditions, the tenant can apply to the Scottish Land Court. [6] The Land Court can include in its determination the terms of the existing tenancy, and any additional terms required. 

General provisions

The provisions required in the lease are set out in Schedule 1 of the 1991 Act. These are:

• the names of the parties

• a description of the land or parcels of land to be let, with reference to a map or plan, to show the extent of the holding

• the duration or term of the lease – if different parts of the holding are let for different lengths of time, this should also be stated here

• how much the rent is and when it is due

• provisions concerning the landlord's responsibility to insure and repair the property against fire damage and the tenant's responsibility to insure the crops and stock against fire damage.

Repairing duties

The lease must also include information about fixed equipment and repairs.

Irritancy clauses

The lease may include irritancy clauses agreed between the landlord and tenant. If the tenant breaks any of these clauses, the landlord may be within their right to evict. [7] However, this is a complicated area, and in recent cases landlords have been unable to remove tenants using irritancy clauses. Therefore, if a tenant is being evicted for breaking an irritancy clause, the matter should be referred to a solicitor who specialises in agricultural law.

Prohibited provisions

In addition, the lease cannot contain any of the following:

• a provision requiring the tenant to pay for the replacement and renewal of buildings or fixed equipment as a result of natural decay or fair wear and tear – this is the responsibility of the landlord [8] However, there are exceptions

• a clause requiring the tenant to live on the land – if such a term is included, it will be interpreted to mean that the tenant must ensure that, if s/he does not live on the holding, someone capable of farming the land properly will live there instead [9]

• a clause banning the tenant from using the land for non-agricultural purposes, [10] or for subletting the land as part of a plan to use the land for non-agricultural purposes [11] (see the section on diversification).

Record of holding

As part of the lease, the landlord must provide the tenant with a record of holding. [12] This must detail the condition of the fixed equipment on the holding (once this has been done, it will form part of the lease) and may detail the condition of the cultivation of the holding. [13]

The record can be in any form agreed by the tenant and landlord. [14] For example, it could be in writing, but supplemented by photographs or videotaped evidence.

Both the tenant and the landlord can ask for a new record to be made at any time during the tenancy, for example, to record improvements to the holding. [15] This should help avoid any disputes over who owns what or whether compensation is due when the tenant leaves the holding.

Tacit relocation of the lease

Once the term of the lease has expired, the lease will automatically repeat itself for another year with the same terms and conditions [16] unless:

• the tenant wishes to move out and gives the landlord the correct notice to leave (see 'tenant ends tenancy' below)

• the landlord wants the tenant to move out and gives the tenant correct notice to leave (see the section on eviction for further details).

The landlord cannot contract out of tacit relocation.

Prohibited provisions

In addition, the lease cannot contain a provision requiring the tenant to pay for the replacement and renewal of buildings or fixed equipment as a result of natural decay or fair wear and tear. [17] However, where a 1991 Act lease, or a post lease agreement, obliges a tenant to pay for replacement and renewal of buildings or fixed equipment, this continues to be a valid term of the lease unless:

• there has been a determination by the Land Court reviewing the rent payable in respect of the holding, and

• the tenant gives notice to the landlord that the agreement over repairs should be nullified, and

• the buildings and fixed equipment are in a reasonable state of repair or at least no worse than when the lease was entered into when the notice was served.

In this case, the clause will not be null and void. [18]

Fixed equipment includes: [19]

• permanent buildings, such as farm houses, cottages and barns, required to run the holding properly

• permanent fences, hedges and gates

• ditches and ponds

• water and sewerage systems

• roads, bridges and fords

• electrical equipment, such as generators, fixed motors and wiring systems. 

If the tenant wishes to end the tenancy, they must give the landlord a notice of intention to quit in writing. [20] This must be served no less than one year and no more than two years before the date on which the lease ends. If this date has already passed and the tenancy is continuing by tacit relocation, the notice must be served no less than one year and no more than two years before the date on which the tenant wishes to leave. [21]

The tenant wants to retire or assign the tenancy

From 28 February 2021 tenant farmers who want to retire have a legal right to realise value for their tenancies. [22] They may also be able to relinquish the tenancy to another party for payment. See the page on subletting, assignation and succession in 1991 Act tenancies.

If a tenant is considering this it is important to seek advice from their accountant and a solicitor who specialises in agricultural law.

The tenant has the right to withhold rent if the landlord does not keep to her/his repairing responsibilities. [23]

Agricultural tenants can apply to their local authority for a grant or loan to carry out certain repair work under the local authority's scheme of assistance. However, they can only do this if they would be entitled to compensation for the work as for an improvement. The value of the grant or loan is then deducted from the compensation due. [24]

More information can be found in the page on the scheme of assistance.

The landlord has the right to increase the rent on the holding if they carry out improvements to the land (at the request or with the agreement of the tenant), provided they give the tenant notice in writing of the increase within six months of completing the work. [25]

In addition, either the landlord or the tenant can serve a notice on the other requesting a review of the rent payable for the holding by the Scottish Land Court. The notice must be sent not more than two years but not less than one year prior to the date on which a notice to quit the tenancy could be served, that is, the date on which the lease would end if a notice to quit was successful. [26]

For example, if a lease is running on tacit relocation from year to year ending on Martinmas (28 November) each year, then the rent review notice must be served before Martinmas. If a landlord wanted to review the rent payable for a holding after 28 November 2009, s/he would have to serve the notice prior to that date.

After the notice has been served, the landlord and tenant usually negotiate on the amount of rent due to be paid. If, however, the negotiations have not ended in agreement before the year has passed (in this example, before 28 November 2009) then either party can apply to the Land Court for a determination of the rent due to be paid. If the application to the Land Court is not made before the date of expiry of the notice then the notice falls.

The new rent cannot take effect within three years of: [27]

• the start of the tenancy, or

• a previous rent determination from the Land Court (including a decision to keep the rent at the same level).

Since 2003, 1991 Act tenants have been permitted to use agricultural land for other purposes (such as tourism or forestry), even if their leases prohibit this. [28] This is known as diversification.

A tenant wishing to diversify must send their landlord a notice of diversification outlining their proposal. [29]

• This must be sent at least 70 days before the changes are due to begin.

• The landlord can ask for further information if necessary, which the tenant must supply.

• The landlord must inform the tenant of their decision in writing within 60 days of the date on the notice of diversification, or 60 days from the date s/he asked for further information.

• If the landlord does not, the tenant can assume that the landlord agrees to the plans (unless the plans involve the planting and cropping of trees).

If the landlord agrees to the proposal, they have the right to impose reasonable conditions.

The landlord can object to the proposal if s/he feels it would be harmful to the land or would cause them undue hardship.  If the tenant believes the landlord's objections or any conditions imposed are unreasonable, s/he can take the case to the Scottish Land Court. [30]

The agreement must: [31]

• be made in writing

• specify the date on which the tenancy will change.

The tenancy itself must: [32]

• include the same land as the 1991 Act tenancy, and

• last for at least 25 years (usually LDTs last for a minimum of 10 years).

In addition, the tenant will be entitled to compensation for improvements under the 1991 Act when their tenancy is converted.

Tenants should be aware that LDTs do not offer as much security as 1991 Act tenancies.

More information about LDTs can be found in the section on limited duration tenancies.

Application forms for the notices mentioned above can be downloaded from the Scottish Land Court website. In addition, any disputes over the tenancy can be referred to the Land Court, [33] ] except:

• disputes concerning the price to be paid by a tenant who buys her/his land through the right to buy process, and

• matters concerning intestate succession.

In some cases, the landlord and tenant can also agree to refer the matter to arbitration.[34]