The Public Services Reform (Agricultural Holdings) (Scotland) Order 2011

EXPLANATORY NOTE

(This note is not part of the Order)

This Order amends the Agricultural Holdings (Scotland) Act 1991 (“1991 Act”) and the Agricultural Holdings (Scotland) Act 2003 (“2003 Act”).

Amendment of the 1991 Act

• Two-man unit

  Part III (supplementary) of Schedule 2 to the 1991 Act defines “two-man unit”, a term which appears in Parts I and II of that Schedule which set out the grounds for giving consent to the operation of notices to quit a tenancy where section 25(3) applies.

  Article 3(b)(i) replaces the definition of “two-man unit” with “viable unit”; viability is predicated upon the capability of the agricultural unit to provide an individual occupying it with full time employment, the means to pay the rent and for adequate maintenance of the unit. Article 3(a) and (b)(ii) make changes consequent to that substitution.

• Annulment of post lease agreements

  Section 5(4A) to (4C) of the 1991 Act applies to agreements entered into under section 5(3) of the 1991 Act (which was repealed by the 2003 Act) whereby the landlord and tenant entered into agreements to alter their respective responsibilities in relation to fixed equipment (“post lease agreements”). Section 5(4A) and (4C) sets out the general principle that such agreements continue to have effect but can be nullified if subsection (4B) is complied with.

  Article 4 substitutes subsection (4B), to provide that a tenant who wishes to have a post lease agreement nullified must notify the landlord of that fact in writing no later than 6 months before the date from which any variation of rent will take effect. Nullification has effect from the date from which any variation takes effect. On the date the variation takes effect it remains a requirement that the buildings and other fixed equipment are in a reasonable state of repair; or if the buildings and other fixed equipment were in an unreasonable state of repair when the agreement was made, they are not in a worse state of repair than they were then. Subsection (4BA) provides a shorter period of notice in cases where a rent review is initiated at less than 6 months’ notice.

• Minor amendment to section 13

  Section 13(1) of the 1991 Act requires that a party wishing to have the rent reviewed may have the question of what rent should be payable for the holding with effect from the review date referred to the Land Court. Article 5 amends section 13 to reinstate the wording that was deleted by paragraph 15 of the Schedule to the 2003 Act, to clarify that intimation of intention to make such a referral to the Land Court must be made by written notice.

Amendment of the 2003 Act

• Reduction in the minimum term of a limited duration tenancy from 15 years to 10 years

  Section 5(1) of the 2003 Act defines a Limited Duration Tenancy (“LDT”) as an agricultural tenancy (other than a 1991 Act tenancy) of at least 15 years duration. Article 7(1)(a) reduces the minimum term of an LDT from 15 years to 10 years. Article 7(1)(b) and (2) makes amendments consequent to this provision.

• Conversion of a short limited duration to a limited duration tenancy by agreement

  Section 5(2) of the 2003 Act provides that where a tenant under a Short Limited Duration Tenancy (“SLDT”) continues in occupation beyond the expiry date with the landlord’s consent and the period of occupation exceeds 5 years the tenancy becomes an LDT from the expiry of the 5 year period. Article 8 substitutes subsection (2) of section 5 to give parties the option to convert an SLDT to an LDT, in writing, prior to the expiry of the SLDT; the resultant LDT has effect as if it had commenced at the start of the SLDT.

• Fixed equipment

  Article 9 substitutes subsections (1) to (5) of section 16 of the 2003 Act. Its replacement provides for the landlord’s obligations regarding the provision of fixed equipment to be determined by reference to the use of the land as specified in the lease (section 16(1)(a)). The fixed equipment is to be provided and put into the condition specified in the schedule of fixed equipment within six months of the commencement of the tenancy, unless that is not reasonably practicable because of an obligation on the landlord arising under another enactment (section 16(1)(a) and (b)). New section 16(2) requires tenants and landlords to agree in writing a schedule of fixed equipment specifying the fixed equipment the landlord will provide and its condition. The cost of preparing such a specification is to be borne by the parties equally, unless otherwise agreed (section 16(5)). New section 16(3) makes provision for the parties to amend the schedule of fixed equipment. Section 16(4) describes the extent of the tenant’s duties as respects the maintenance of the fixed equipment provided.

Savings

Article 10 saves certain provisions of the 1991 Act and 2003 Act so that they continue to apply in the circumstances specified.