This item was published during the term of a previous administration that ended in April 2007
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Changes to farm tenancy laws
21/05/2003
New protections for general partners in farm tenancy
partnerships come into force tomorrow. These protections
are being introduced as the first provisions of the
Agricultural Holdings (Scotland) Act 2003.
These partnerships have been created to be the tenant in
the agricultural lease, with the occupier of the land being
the general partner in the partnership. These arrangements
have been used by landlords to prevent the occupier from
enjoying the strong security of tenure that existing law
would give them if they were tenant in their own right.
The main elements of the new provisions are:
- they have been introduced to ensure that landlords
cannot evade protections for general partners
introduced by the Act by dissolving these
partnerships.
- they apply to limited partnerships, principally in
cases where the landlord served a notice to dissolve
the partnership on or after 16 September 2002.
- they allow the general partner to ensure that the
lease continues and the general partner becomes the
tenant in their own right.
- the landlord will be able to challenge this
notification before the Scottish Land Court.
- The Land Court will allow the general partner to
become the tenant where it considers that the
landlord's purpose in dissolving the partnership was to
deprive the general partner of rights provided by the
new legislation.
*It should be noted that any general partners who wish
to use the new protections, must serve notice upon the
landlord no more than 28 days after the purported
termination of the tenancy(or where this occurred before 22
May, not later than Wednesday 18 June 2003). Any current or
former general partner or landlord who believes that these
measures could cover their own circumstances should seek
professional advice as soon as possible.
The Agricultural Holdings (Scotland) Act 2003 received
Royal Assent on 22 April 2003. The measures coming into
force on 22 May are section 72 of the Act (excluding
subsections (2) and (10)), together with section 70(7) and
(8). They are the first provisions in the new Act to come
into force. Other provisions (which for instance, introduce
new types of tenancy, new procedures for resolving disputes
about agricultural leases and introduce a pre-emptive right
to buy and other new rights for tenants) will be commenced
in due course.
The measures coming into force on 22 May relate to
limited partnerships that are the tenant in so-called
"secure" agricultural leases, or leases created under the
Agricultural Holdings (Scotland) Act 1991 or earlier
legislation. The 1991 Act gives the tenant of a secure
lease and his or her family strong security of tenure and
many such leases have continued to run across a number of
generations of tenant.
The period within which a landlord may challenge a
notice served by a general partner that he or she intends
to become tenant of the continuing lease will be set by
regulation.
The Scottish Executive has been liaising with the key
representative bodies involved in agricultural tenancy law
(including NFU Scotland, the Scottish Tenant Farmers Action
Group, the Scottish Landowners' Federation and the Law
Society of Scotland) about the commencement of these
provisions.
The new measures apply to limited partnerships
principally in cases where the landlord served a notice to
dissolve the partnership on or after 16 September 2002.
They have been introduced to ensure that landlords cannot
evade protections for general partners introduced by the
Act by dissolving these partnerships. In that event the new
measures allow the general partner to take steps to ensure
that the lease continues and that the general partner
becomes the tenant in their own right. To do so, the
general partner must notify the landlord that they intend
to become tenant.
The landlord will be able to challenge this notification
before the Scottish Land Court. However, the Land Court
will nevertheless allow the general partner to become the
tenant where it considers that the landlord's purpose in
dissolving the partnership was to deprive the general
partner of rights provided by the new legislation.