The Tenant Farming Commissioner (the TFC) has published a Guide to Fixed Equipment on Agricultural Holdings. The guide supplements the TFC' Code of Practice on The Maintenance of the Condition of Tenanted Agricultural Holdings.

Unlike codes of practice which are provided for in the Land Reform (Scotland) Act 2016, the guide does not have statutory footing and does not set out behaviours and processes to be followed by the parties. Instead, it provides a summary of the complex area of law relating to fixed equipment and sets out what the respective obligations of the landlord and the tenant are, depending on the type of tenancy. It also summarises the position relating to records of condition, tenant's improvements, tenant's fixtures and landlord's improvements.

In addition, the guide seeks to provide some guidance on "simple ways" to avoid problems including:

  • Ensuring that a record of the fixed equipment and its condition is prepared at commencement of the tenancy and kept updated during the tenancy;
  • Ensuring that good records are kept of any works done to the fixed equipment by either party during the tenancy.
  • Following the statutory process relating to tenant's improvements where applicable.

It also touches on some of the more complex issues relating to fixed equipment. In particular, it highlights the difficulties of establishing which works are classified as maintenance (which is usually a tenant's responsibility, depending on the type of tenancy) and what kind of works are regarded as replacement and renewal (which is usually a landlord's responsibility, depending on the type of tenancy).

The new guide also highlights the interface between those obligations and the disagreements which can arise as to whether the need for replacement and renewal has arisen, in whole or in part, from a failure to maintain. A document like this cannot be expected to provide answers to these issues – particularly given that so much will turn on the facts of each case – and it reiterates that landlords and tenants should take independent legal advice in specific circumstances.

A question which the guide does not touch on, and which may well be on many landlord's and tenant's minds following Storm Arwen, is the responsibility for storm damage. In the absence of clear provision in the lease, it can be difficult to identify which party is responsible for damage caused by a storm, and some agricultural lawyers take the view that, given that it is not natural decay or fair wear and tear, neither party is responsible under the provisions of the legislation. It seems likely that the position will depend on the severity of the storm (ie when does routine bad weather become a storm?), the type and extent of damage caused and any factors which may have contributed to the damage.

However, whilst the guide understandably does not clear up all of the grey areas in relation to this area of law, it does provide a summary which will be useful for landlords and tenants considering their obligations relating to fixed equipment.

Contributors

Kate McLeish

Partner

Chloe Wales

Senior Associate