Rural Law

The Tenant Farming Commissioner (TFC) has published recommendations relating to the list of tenant’s improvements which are eligible for compensation at termination of an agricultural tenancy.

The functions of the TFC are set out in section 24 of the Land Reform (Scotland) Act 2016. These include making recommendations for a modern list of improvements. The current list can be found in Schedule 5 to the Agricultural Holdings (Scotland) Act 1991.

The TFC has recommended that:

  • Slurry stores and silage pits should be added to the list.
  • Specific reference should be made to “works to dwellings”. The list currently only provides for “erection, alteration and enlargement of buildings” and there has been some debate over whether this wording includes alterations to dwellings. The proposed wording is intended to remove any doubt that works to dwellings are eligible for compensation if the correct notice procedure is followed.
  • “Permissions, consents, contracts, authorisations and restrictions” should be added to the list. The current list only provides for tangible improvements and would not include, for example, a SEPA consent or licence.
  • The current wording relating to renewable energy facilities should be widened to provide for “the provision, distribution and storage of electricity, gas, power and heat”. The current list does not make provision for facilities producing heat.

The TFC has not recommended that a “sweep all” provision be included (such a clause could have been based on wording from crofting legislation which makes reference to any items which add value to the holding as an “agricultural subject”) and instead favours the list of eligible items being updated regularly.

The recommendations are to be laid before the Scottish Parliament. In the event that the recommendations are implemented (and it seems likely that they will be given the TFC’s role), they will not have retrospective effect and will not be relevant to the tenant’s amnesty (ie a tenant will not be able to seek to claim compensation for a slurry store under the amnesty provisions if slurry stores are added to the list).

If you have any queries regarding tenant’s improvements or agricultural holdings in general, please get in touch with your usual contact in the Land and Rural Business team.

Kate McLeish