Tenant’s improvement amnesty ends June 13 2020

Hamish Lean discusses the benefits to agricultural tenants of engaging with the amnesty process.

1st June 2019

Most readers will have heard of the tenant’s improvement amnesty which was introduced by the Land Reform (Scotland) Act 2016. 

However, I wonder how many tenant farmers who are reading this column have actually engaged with the amnesty process? 

The purpose of the amnesty is to make sure that improvements carried out by the tenant on the farm where the correct procedures have not been followed can be made to qualify for compensation at the end of the tenancy. 

The classic example is where a tenant has erected a building but hasn’t given a notice in advance to the landlord. 

The tenant will not be entitled to be compensated for the building at the end of the tenancy and the only alternative may be to treat it as a fixture and to demolish it and remove it in order to preserve some value. 

However, that solution will often be impractical. 

Other improvements, for example, new drainage schemes and work to the farmhouse may also not be eligible for compensation because the proper procedures were followed.  

The amnesty period lasts for three years and began on the 13th June 2017 and expires on the 13th June 2020. 

It applies to improvements carried out and completed before 13th June 2017. 

The Tenant Farming Commissioner has issued a helpful code of practice for use by tenants and landlords explaining how to go about the amnesty process and, hopefully reach an amnesty agreement on the various works of improvement that should be subject to compensation at the end of the tenancy.

It is fair to say that when the amnesty period opened just over 2 years ago, many tenants took the view that it was something that they would get round to in due course but that they had other pressing priorities to deal with. 

Time flies however and we are now less than a year away from the close of the amnesty procedure. 

It is plain common sense for tenants to make use of the amnesty and I am certainly noticing a much greater level of enquiries from tenants looking to invoke the procedure.  

If agreement cannot be reached with the landlord, a tenant must serve a notice detailing the improvements which they wish to be made subject to the amnesty and that notice must be served before the 13th June 2020. 

A landlord has a period of 2 months to object to all of the items or any particular item in the notice. 

If the landlord does object the tenant must then make an application to the Scottish Land Court for approval of the list of items within 2 months of receiving the objection.  

I suspect that what will happen is that a number of tenants will leave matters to the very last minute.

We will see a rush of notices being served in April and May next year with those notices being met by objections by landlords and there will then be a large number of applications made to the Scottish Land Court simply to keep the process open whilst parties try to agree matters in the meantime. 

A lot of stress, anxiety and expense can be avoided however if tenants engage with the process now rather than at the last minute!