The leasing of land is one of the main focus points of the proposals brought within the Land Reform Scotland Bill 2024.
The provisions in the Bill include those relating to expanding the existing Tenant Farming Commissioner’s (“TFC”) functions and introducing a model environmental lease.
These amendments are designed to bring the management of small landholdings in line with those of other agricultural holdings and to encourage the use of landholdings for sustainable purposes by publishing a Scottish Government-backed model lease.
The Tenant Farming Commissioner’s functions
The TFC’s expanding role is a key part of the Bill’s efforts to address the issues of transparency and sustainability in the farming sector. The TFC, whose functions have been largely set out in the Land Reform (Scotland) Act 2016 (“the 2016 Act”), will see a number of these functions extended under the proposals. These are largely to encompass small landholdings in the legislation.
Small landholdings are tenanted holdings regulated under the Small Landholdings Acts 1886 – 1931 and have, up until the Bill, been absent from the TFC’s remit.
The TFC will now have the ability to prepare and issue codes of practice relating to small landholdings, providing guidance and recommendations on how tenants and landlords can encourage more sustainable farming and land management practices.
The proposals will also see that the TFC may refer questions of law arising from small landholdings to the Land Court. This would offer more protections to the parties of small landholdings, as they would have access to a court system with specialist expertise in agricultural law if an issue of law ever arose regarding the small landholding.
The TFC's function of promoting good relations between landlords and tenants of agricultural holdings has also been extended to include tenants of small landholdings, bringing the latter in line with the regulations benefitting agricultural holdings set out in the 2016 Act.
The Explanatory Note of the Bill from the Scottish Government states that while the changes mentioned above are explicitly made to the 2016 Act, other provisions within the 2016 Act will also be affected by the Bill.
The general expansion of the TFC’s functions to include small landholdings has a resultant butterfly effect on provisions that are not expressly amended in the Bill, unless those provisions are restrictive in their application.
Model Environmental Lease
In addition to the TFC’s expanded role, the Bill has also set out an obligation for Scottish Ministers to publish a model lease for environmental purposes.
The proposed legislation is not particularly extensive at this stage; however, it does propose that within two years from the point at which the Bill comes into force as an Act of Parliament, Scottish Ministers should publish a model lease that is designed for letting land for either wholly or partly environmental purposes.
A landholding is used for environmental purposes if it is used:
For sustainable and regenerative agriculture;
In a way that contributes towards the Scottish Government’s net-zero targets;
In a way that contributes towards adaptation to climate change, or;
In a way that contributes towards increasing or sustaining biodiversity.
These purposes are rather wide-ranging and leave a lot of scope for landholdings to fall within their remit. However, it is unclear what gap in the existing agricultural sector this model lease will serve to fill that isn’t already served by the Agricultural Holdings Acts and other non-agricultural leases.
Overall, the changes introduced by the Bill affecting the TFC’s role and the introduction of the Model Environmental Lease are designed to work towards the Scottish Government’s efforts to reform the Tenant Farming sector.
By providing for better and more consistent management of the holdings, the provisions are designed to ensure tenants can enjoy secure and sustainable tenancies and have more developed safeguards for protecting their assets.
It is not yet clear how these provisions, particularly those relating to the model environmental lease, will play out and interact with existing agricultural legislation.
Whether these leasing provisions will satisfy the aims of the Scottish Government to promote a more sustainable, fair, and transparent agricultural sector is yet to be seen as the Bill moves into its next stage in Holyrood.
If you would like to know more about the changes being proposed by the Land Reform (Scotland) Bill 2024, our team of industry-leading rural experts will be happy to answer any questions you may have.
This article was co-authored by Trainee Madeleine Gill.