The Scottish Government released its consultation on Small Landholdings - Small landholdings modernisation: consultation – on 22 October 2022.
In this first blog on Small Landholdings, we consider which land is affected by the consultation.
What are Small Landholdings?
Small Landholdings are tenanted areas of land which are subject to the Small Landholders (Scotland) Acts of 1886 to 1931 ("the Landholders Acts"). They are distinct from other areas of land which are tenanted as crofts or agricultural holdings under different legislation.
The average Small Landholding is understood to be around 20 acres and they are present throughout Scotland, except in the crofting counties (the former counties of Argyll, Caithness, Inverness, Orkney, Ross and Cromarty, Sutherland and Zetland). Any Small Landholdings which existed in the crofting counties became crofts following the Crofters (Scotland) Act 1955.
Most of the Small Landholdings in existence today were established in the early 20th century. Thereafter, the practice of creating them was abandoned and few were established after 1931.
The Landholders Acts provided for two sub-types of Small Landholding – Landholdings and Statutory Small Tenancies.
To qualify and be established as a Landholding, the following criteria had to be met:
- the land had to be tenanted from year to year;
- the tenant had to reside within 2 miles of the holding;
- the tenant had to cultivate the holding by himself or with his family, with or without hired labour;
- the rent had to be less than £50 per acre, or the tenanted area had to be less than 50 acres (excluding any common grazing land); and
- the tenant had to provide the whole or greater part of the buildings or other permanent improvements (i.e. most of the fixed equipment).
A Landholder's main rights are to:
- security of tenure – i.e. the ongoing nature of the tenancy and right to pass it on down the generations (provided the statutory tenancy conditions are complied with);
- a fair rent; and
- compensation for improvements if the tenancy is renounced or land is resumed by the landlord – i.e. if the landlord removes the land from the tenancy with the approval of the Land Court.
"Statutory Small Tenancies"
If the criteria for establishing a Landholding was met - but most of the fixed equipment was provided or paid for by the landlord - a Statutory Small Tenancy was established instead.
Statutory Small Tenants have different rights to Landholders and these tenancies are governed by different legislation.
A Statutory Small Tenant's main rights (subject to decision of the Land Court) are to:
- renewal of the tenancy when it ends;
- a fair rent;
- a declaration that the tenancy is a Landholding tenancy, if the landlord fails to provide such buildings as will enable the tenant to cultivate the holding; and
- compensation for improvements and agricultural loss.
No responses were received to the Scottish Government's earlier consultation - Small landholdings in Scotland: legislation review 2016 - from a tenant claiming to hold land as a Statutory Small Tenant, and it is unknown whether any such tenancies remain.
How common are they?
The number of Small Landholdings has reduced over the years and there are now very few. The 2016 Scottish Agricultural Census found that known Small Landholdings cover a total of 2,889 hectares – just 0.2% of tenanted land in Scotland, or about 0.05% of agricultural land. By comparison, the total area of all agricultural holdings is 5.58 million hectares.
The number has declined for a variety of reasons – some tenancies have been given up or converted to a different type of tenancy. Significantly, Small Landholding status ends when the land is purchased by a Landholder or Statutory Small Tenant by agreement with their landlord.
Further, as noted in the legislation review of 2016 - between 1959 and 2008, governments pursued a policy of removing state-owned land from this form of tenure. As a result, many of these tenancies were converted to secure tenancies under the Agricultural Holdings (Scotland) Act of 1991 or sold back to the original landlord. In addition, whether an area of land is a Small Landholding can be difficult to identify because tenants are often sure about what type of tenancy they have.
The 2016 Census suggested that there were approximately 74 Small Landholdings at that time. By the 2021 Scottish Agricultural Census, 59 Small Landholders identified themselves as such. Concentrations of Small Landholdings remain in Ayrshire, Aberdeenshire, Moray, Dumfriesshire, the Scottish Borders and east-central Scotland, with the greatest number (between 15-18) found in Arran.
The future for Small Landholdings
In our second blog which will be issued in January, we will discuss the proposals for modernising the Small Landholdings regime which are set out in the recently published consultation.