On agricultural holdings in Scotland and a call for simplification

In a recent blog, I criticised myself for being that annoying person who brings problems rather than solutions. It is always tempting to be the heckler, but the heckler has an easy job, or at least a job that lacks accountability. Contrast that role with something productive, say an architect or a builder, where you have to actually design or make novelty. In this blog I once again adopt the role of heckler. Like all good advocates, I will get my defence in early, but some even earlier background information is necessary before that.

This blog offers some outline thoughts about the law of agricultural holdings in Scotland. Whilst this is something of a niche area, it is a gey important niche. That importance is evidenced by the very fact that governments have intervened in the rural landlord and tenant relationship since the late 19th century, with the productivity of agricultural land – and in turn the welfare of the nation – in mind. In the 20th century, it was WWII and then postbellum rationing that played a crucial role in shaping government policy, with the landlord and tenant relationship being regulated in such a way as to prevent land lying fallow whilst landlord and (productive) tenant were arguing about matters at the end of a lease.

Although the policy concerns may be different in the 21st century, the niche area remains important. The newly formed Scottish Parliament was relatively quick to legislate on agricultural holdings, dealing with matters as varied as tenant diversification, limited partnership tenancies and the pre-emptive right to buy for “1991 Act” tenants. A few Holyrood terms later, the Scottish land question (of which agricultural holdings law forms part) is topical once again. That topicality is evidenced by the Scottish Government’s Agricultural Holdings Legislation Review. Six experts have been appointed to guide the Scottish Government through that review process. It can also be evidenced by the wider Land Reform Review Group, which brings me (eventually) to my pre-emptive defence. As an adviser to the separate (but similar) LRRG, it would be a tad rude, presumptuous and downright bad-form for me to make public declarations about what the highly capable members of the new group should do. Therefore I will not do that. What I will do is offer one or two quick thoughts about agricultural holdings law as a whole, which I hope will be of interest to readers of this blog and perhaps even to the group.

My first thought is one that I have already put on record, in the form of a conclusion to an article in a legal journal. To succinctly express the point, the law in relation to agricultural holdings is hugely and at times unnecessarily complex. To express that point more fully, I copy (and amend slightly) the concluding paragraph to the article you will find at page 193 of 2012’s Scots Law Times (News) section.

The third edition of the now Lord President Gill’s authoritative text on agricultural holdings was not short. The fourth edition, split over two volumes, will not be short either. It seems odd that the legal wrinkles attached to esoteric agricultural matters cause so much consternation…According to the Scottish Parliamentary Information Centre, as at 2011 there were fewer than 7,000 tenanted holdings out of a total of 52,543 holdings, meaning some 12.8 per cent of holdings are tenanted. Whilst unpicking the arrangements as they stand would be tricky, that such complexity attaches to this area is striking. Admittedly each practice area has its own quirks, but Scotland’s agricultural tenancy régime provides an onion that has a habit of revealing another layer as it is peeled.

That article related to the not at all simple Salvesen v Riddell litigation. That case is just about reaching a conclusion in the form of a remedial legislative order at Holyrood, as demanded by the UK Supreme Court.

It might also be added that an understanding of property law, then more specifically landlord and tenant, then more specifically still agricultural holdings law is necessary to engage fully with any questions that may arise in an agricultural let. You also need to contend with the weird terminology lawyers sometimes use, like ish* and Whitsunday. All of this leads to a general “access to justice” point. Of course, lawyers are there to be consulted about many issues encountered in day to day life, from writing a will to buying a house, but agricultural holdings law can be a bit of a minefield and as such legal advice can be needed at every turn. Tactically, a party with deeper pockets could be tempted to turn to or threaten litigation to force another party to settle. One response to this could be the newly developed system for Short Form Arbitration, but that response could be categorised as treating the symptom rather than providing a cure.

So what does this heckler want? Simplification. That is something that is very much easier said then done.

What should be done to effect simplification? Former Land Reform Review Group member Jim Hunter has one solution. He is on record (in the Scottish Farmer) [*EDIT – 1 December 2016* That Scottish Farmer link no longer works, but Andy Wightman hosts the same article on his blog] pushing for a right to buy for existing tenants that would be “quickly followed” by “the repeal of all agricultural tenancy law.” Why? To create a market of farmer-to-farmer rentals, which idea might need augmented by an upper limit on the area of farmland that can be owned by any individual or company (excepting therefrom farmer-led co-operatives which he also advocates). That would be a radical step indeed.

If there is no building afresh moment, what should be done in its stead? Again, that is a mighty good question. It does seem that Scotland is locked into a system where heavily regulated rural lets are predominant. Let us assume for a moment that there is no radical change to that. If the let sector is to remain vibrant, there are one or two legal eccentricities that ought to be looked at. First, the curious gap between valid short limited duration tenancies (of less than five years’ duration) and valid limited duration tenancies (of greater than ten years’ duration) has always struck me as a bit weird. If anyone can shed any particular insight on why an eight year let cannot fit neatly into one of the schemes introduced by the Agricultural Holdings (Scotland) Act 2003 (as amended), or thinks I am worrying about nothing, please let me know.

Further, landlords in particular might argue for the ability to offer long term agreements without fear of a very secure lease with security of tenure (i.e. the ability for a tenant to hang around at the end of the lease). Provided such a reform did not affect existing tenants who hold on a 1991 Act basis, a sound case could be made for that reform in the interests of the oft-spoken goal of a vibrant tenanted sector.

Anything else that is ripe for reform? Almost definitely, but I think that will do for now. This blog has already hit the magic, attention span-killing 1,000+ word mark, so I think I have said enough. Over to the review group. I very much look forward to their interim report in summer 2014. (Quite a lot is happening that summer.)

*One footnote for non-lawyers. “Ish” has nothing to do with an approximation, in this context. Rather, it reflects the term of a lease, which expires at the ish. At the ish, the tenant must leave the property “void and redd.” What does redd mean? Och, never mind…

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About basedrones

Bachelor of Laws. Scots lawyer working at the University of Aberdeen. English law qualified. Took far too long to write this bio. Blogs on legal issues, with occasional veering into other purportedly intellectual stuff from time to time. Tweets about legal issues, education, law clinics, fitba, music, rogue cell division and not at all about politics at @MalcolmCombe.
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2 Responses to On agricultural holdings in Scotland and a call for simplification

  1. neilking says:

    I’ve always wondered if “redd” (i.e. clear) is etymologically related to “redd up” (which I’ve never seen written so don’t know how to spell it), meaning tidy up?

    And you’re right, by the way. There’s no good reason not to be able to have an 8 year lease and the inability to have one makes a mockery of Scots law. Anything else ripe for reform? Yes, the whole lot of it, sweep it away completely. (For new leases only, of course. Not suggesting interfering with anyone’s existing rights.)

  2. Danny Quinn says:

    Please look at http://www.powhillonfarm.co.uk and the evidence that exposes the corrupt agriculture. Holdings arbitration process. The arbitrations began in 1990 and still remain to be resolved: why? The answer lies in the 1947/48 agriculture acts. These acts give ministers the powers to resolve disputes by way of serving notices onto farms where disputes occur that cause disruption to the production of food or for the protection of farm animals and farm environment. Ministers to this day still fail to operate this very simple process: why? It is not advantages to solicitors, land agents or landlords.
    If you implement the acts you effectively remove the need for costly arbitrations, land court included as under the acts a minister would have identified the person/s responsible for causing the dispute and served a notice on the guilty party, giving notice of what action had to be undertaken to improve the situation. Where a person served with the notice fails to comply then the minister has the power to intervene and carry out the necessary work and to bill the person responsible. Therefore the need for the complicated holdings act arbitration process is not required as the minister identifies where the guilt lies, along with the cost to correct, which of course should include whatever damages has to be awarded.

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