Tenant Farming and Agricultural Holdings
Latest News - Updated 12 June 2018
Court of Session
Opinion of the Inner House of the Court of Session in the petition of R. A. McMaster & Others (Petitioners and Reclaimers) against the Scottish Ministers (Respondents) published on 12 June 2018.
The Outer House, Court of Session judgement for the court case McMaster and Others V Scottish Ministers was published on 21 March 2017.
We have now published the work done for us by Savills - 'Testing the Rent Review System Report and Recommendations'.
This is a significant step towards finding a solution and a solid basis for ongoing discussions.
Our objective is to deliver a revised rent review system which is both practical and fair to tenants and landlords. We continue to work with stakeholders to achieve that.
Modern Limited Duration Tenancy (MLDT) comes into force
Since 30 November 2017, landlords and their tenant farmers have a new tenancy format to consider as the new Modern Limited Duration Tenancy (MLDT) is now in force. Created under the Land Reform (Scotland) Act 2016, the MLDT replaces the Limited Duration Tenancy (LDT) option which has been around since 2003. While the MLDT has a minimum term of 10 years, parties looking for a less lengthy option can still use the Short-Limited Duration Tenancy option. Those LDTs which are currently in operation will not be affected until their term date arrives.
Tenants and landlords should note that if an MLDT is not terminated on its expiry date, it continues for additional 7-year term. Another feature of the new MLDT is that a schedule of fixed equipment on the farm/s must be undertaken and completed within 90 days of the tenancy beginning.
A feature of the new MLDT's for new entrants is that it contains a 5-year break-clause. As well as allowing any new entrant to escape an unsatisfactory agreement with their landlord, it conversely allows landlords to remove any new entrant who they are unhappy with.
Change in law around Limited Partnership
On 26 June 2017, changes were made to UK anti-money laundering measures to help prevent money laundering and terrorist financing. For the first time, Scottish Limited Partnerships (SLPs) and General Scottish Partnerships (SPs), where all the partners are corporate bodies, will need to identify and report information on the people who ultimately own and control them. This is known as the register of people with significant control.
These regulations provide a four week period for partnerships to investigate their ownership. From 24 July 2017, SLPs and SPs must start filing the required information with Companies House. This must be done within 14 days and any subsequent changes must be notified within 14 days. Partnerships must also confirm their information every year.
The Statutory Instrument which relates to these changes is available here:
Guidance for partnerships is available here: https://www.gov.uk/government/publications/guidance-to-the-people-with-significant-control-requirements-for-companies-and-limited-liability-partnerships
For a summary of the all the changes, please see the attached press notice from Companies House: https://www.gov.uk/government/news/changes-to-uk-anti-money-laundering-measures
Code of Practice - Amnesty on Tenants' Improvements
Scotland’s Tenant Farming Commissioner, Bob McIntosh, has issued the first Code of Practice - Amnesty on Tenants’ Improvements - to be followed by landowners, tenant farmers and land agents.
Land Reform (Scotland) Act 2016
The commencement regulation covering amnesty (compensation for tenant's improvements) came into force on 13 March 2017 and had a three month lead in period. The amnesty period commenced on 13 June 2017 and lasts for three years. The link to this regulation is here.
The Land Reform (Scotland) Act 2016 (Commencement No.5 and Transitory Provisions) Regulations 2017
The rent review provisions are one of the packages of commencement regulations planned for next year.