Review of Legislation Governing Small Landholdings in Scotland

Some of my research interests and related blog posts are somewhat niche. True to form, here is a short post about an esoteric part of Scottish land law. Actually, now that I think about it, it might be a bit generous to describe the topic of this blog post as niche, but here goes…

This post is about small landholdings in Scotland. These are a type* of rural lease that:

  1. can be found outwith the traditional crofting counties (of the Highlands and Islands); and
  2. are not governed by the agricultural holding** regime.

The statutory system of crofting was introduced to parts of Scotland by legislation passed in 1886, but the rest of Scotland had to wait until 1911 before its smallholdings were subjected to similar, and rather powerful, statutory control. (The effect of this gap in time is something I have blogged about before.)

The regulation introduced related to matters like compensation for improvements (namely what a landlord would have to pay a tenant for any works introduced by the tenant) and security of tenure (meaning the ability of a tenant to hang around on land even at the end of the original term of a lease, provided rent was being paid and other obligations complied with).

For a variety of reasons, there are not that many of these regulated leases still kicking around. Notwithstanding that relatively low number – which seems to be settled at 74 (yes, seventy-four) – there has been a perception that these leases have been ignored when other leases have not. In part, any neglect is ably demonstrated by the mass of legislation about crofting and agricultural holdings, but of course the low numbers of small landholdings also explains that lack of legislative attention. That point notwithstanding, it may be the case that parties to such leases do not have a particularly clear handle on what arrangement they have, not to mention there are arguments about whether these parties have an arrangement that is suitable for the present day, and as such it is a worthwhile exercise to have a look at small landholdings.

Enter Part 11 of the Land Reform (Scotland) Act 2016. This was the result of a Scottish Green Party amendment at Stage 3 of the then bill, which I blogged and tweeted about at the time. This committed Scottish Ministers to: a) review the legislation governing small landholdings; and b) lay a report of that review before the Scottish Parliament no later than 31 March 2017. This the Scottish Ministers have done. The Report can be found here (PDF here).

The Report is an impressive piece of work. I declare an interest, in that I had some limited input to it: a couple of drafts were circulated to me and I commented on them. To be clear though, I declare that interest to give the credit to those that deserve it, and that is decidedly not me. A lot of people inputted to this document, and of course those directly affected by the proposals (the landlords and tenants) provided data for the exercise, so any credit is due to them. This blog post has skimmed over some of the details about small landholdings, whereas the Report goes into the background, the current regime, and the potential for the future in far more detail than I can here. I will offer a few quick thoughts on its interpretation of the future though, to highlight that it narrows down three options, namely:

the status quo;

conversion to another type of tenancy; or

reform and modernisation.

The Report then suggests two of them are not appropriate, as: maintaining the status quo would lead to further diminution of numbers of small landholdings (with unclear effects on rural Scotland); whilst mass conversion of small landholdings into another type of tenancy is just not quite suitable (as, for example, you could end up with crofts outside traditional and even recently expanded crofting areas, not to mention it could have an uncertain effect on already settled positions between landlord and tenant).

That leaves the reform and modernise option. Much could be said about this, but the two key issues that came up in consultation with respondents related to clarity of legislation (which is a bit of a bùrach across many statutes at present) and a right to buy: irrespective of the undeniable politics of a right to buy, it is clear that small landholdings missed out on such rights in 1976 (when an absolute right to buy was conferred on crofters) and 2003 (when a right of first refusal was given to secure “1991 Act” tenants of an agricultural holding).

What next? Naturally, the Scottish Parliament will get the chance to ponder the Report, but paragraph 170 of the Report sets a number of future steps. Some of these might involve the Scottish Law Commission, the new Tenant Farming Commissioner, and the Crofting Commission. Other steps could involve researchers looking into historical data and trends relating to small landholdings, and (either related to that historical research or independently) the likely socio-economic impact of them in the present day.

To conclude, despite the relatively low numbers of small landholdings in Scotland, there is a lot of work to be done in relation to them. I will be watching carefully to see what happens next. Meanwhile, those involved with Scotland’s remaing small landholdings will be watching even more carefully than me.

*The Small Landholders (Scotland) Act 1911 actually introduced two different regimes, where someone who rented a smallholding could be a “landholder” or a “statutory small tenant”, depending on whether it was the landlord or the tenant who had built the structures used for that smallholding. Generally speaking, a statutory small tenant has less in the way of statutory rights than a landholder.

** Agricultural holding used to be the best term to use for that regulated form of lease that prevailed across much of Scottish agriculture, but Lord Gill’s new book on the matter has – after three editions of being called The Law of Agricultural Holdings in Scotland – changed its name to Agricultural Tenancies, to reflect the various other ways people have been able to let land in rural Scotland since the Agricultural Holdings (Scotland) Act 2003 came into force (with more methods still being provided for by Part 10 of the Land Reform (Scotland) Act 2016). Whilst I have no problem with that title (and if I did, I would have mentioned it in my recent Scots Law Times review of the book), I fear the term “agricultural tenancies” in this blog post could cause confusion to some readers. Much like this helpful explanatory note probably has. Sorry.

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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