Chapter 6 – Assignation of and Succession to Agricultural Tenancies
Assignation
Section 103 – Assignation of 1991 Act tenancies
591.Section 103 makes provision about the persons to whom a 1991 Act tenancy may be assigned.
592.Section 10A of the 1991 Act makes provision for the assignation of 1991 Act tenancies. Under the current legislation, the tenant can assign the tenancy to any of the persons who would be entitled to succeed to the tenant’s estate on intestacy by virtue of the Succession (Scotland) Act 1964.
593.Section 103 amends section 10A of the 1991 Act by inserting a new subsection (1A), which extends the class of person that a tenancy can be assigned to. Subsection (3) of section 103 sets out the people to whom, under the new subsection (1A), the tenant can assign the tenancy. Those that are already entitled to be assigned the tenancy under the Succession Act as mentioned above still remain so, including cousins of the tenant. However, this Act extends the right to a number of additional people as set out in subsection (1A)(b) to (n).
594.Currently, under section 10A(3), the landlord can withhold consent to the proposed assignee, if there are reasonable grounds for doing so. Section 103(5) and (6) of the Act amends section 10A of the 1991 Act so that, while the landlord can still withhold consent for a person who is not a near relative if there are reasonable grounds, the Act limits the grounds for objecting to a near relative. The inserted subsection (3A) removes reasonable grounds as a valid reason for objection so that the only grounds on which a landlord can withhold consent to assignation to a near relative are the following: that the person is not of good character, that the person does not have sufficient resources to enable the person to farm the holding efficiently, or that the person does not have adequate training or expertise in agriculture to enable the person to farm with reasonable efficiency.
595.The inserted subsection (3B) provides that this last ground of objection does not apply where the person is engaged or intending to enrol, within a specified period, in a course of relevant agricultural training that must be completed within four years of the date notice was given of the intention to assign. That person is also required to have made arrangements for the holding to be farmed efficiently while the person completes the course.
596.Subsection (6) inserts a new subsection (6) into section 10A of the 1991 Act to define “near relative” for the purposes of new subsections (3A) and (3B).
Section 104 – Assignation of limited duration tenancies
597.Subsection (2) amends section 7 of the 2003 Act by inserting new subsections (3A), (3B) and (5A).
598.Currently, under section 7(3), the landlord can withhold consent to the proposed assignee of an LDT if there are reasonable grounds for doing so.
599.Section 104(2) amends section 7 of the 2003 Act so that, while the landlord can still withhold consent for a person who is not a near relative if there are reasonable grounds, the Act limits the grounds for objecting to a near relative. The inserted subsection (3A) removes reasonable grounds as a valid reason for objection so that the only grounds on which a landlord can withhold consent to assignation to a near relative are the following: that the person is not of good character, that the person does not have sufficient resources to enable the person to farm the holding efficiently, or that the person does not have adequate training or expertise in agriculture to enable the person to farm with reasonable efficiency.
600.The inserted subsection (3B) provides that this last ground of objection does not apply where the person is engaged or intending to enrol, within a specified period, in a course of relevant agricultural training that must be completed within four years of the date notice was given of the intention to assign. The person is also required to have made arrangements for the holding to be farmed efficiently while the person completes the course.
601.Section 104(2)(c) inserts a new subsection (5A) into section 7 which defines “near relative” for the purposes of new subsections (3A) and (3B).
Section 105 – Assignation of modern limited duration tenancies
602.Section 105 amends the 2003 Act by making provision for the assignation of MLDTs, inserting a new section 7B into the 2003 Act.
603.Subsection (1) of the inserted section 7B provides for an assignation of an MLDT tenancy if the landlord provides consent after receiving written notice from the tenant.
604.Subsection (2) provides that the tenant must provide the landlord with written notice of intention to assign an MLDT. The notice must contain details of the proposed assignee, the terms of the assignation and the date from which it is to take effect.
605.Subsections (3) and (4) provide that if the proposed assignee is not a near relative, then the landlord can withhold consent on any reasonable grounds. If the proposed assignee is a near relative then the landlord’s grounds for objection are limited to three circumstances. These are the following: that the person is not of good character, that the person does not have sufficient resources to enable the person to farm the holding efficiently, and that the person does not have adequate training or expertise in agriculture to enable the person to farm with reasonable efficiency.
606.Subsection (5) provides that this last ground of objection does not apply where the person is engaged or intending to enrol, within a specified period, in a course of relevant agricultural training that must be completed within four years. The person is also required to have made arrangements for the holding to be farmed efficiently while the person completes the course.
607.Subsection (6) requires the landlord to give written notice to the tenant indicating withholding of consent within 30 days of receiving the tenant’s notice of intention to assign. If no such notice is provided by the landlord, it is taken that consent has been given.
608.Subsection (7) defines “good husbandry” by reference to schedule 6 of the Agriculture (Scotland) Act 1948.
609.Subsection (8) defines “near relative” of the tenant for the purposes of subsection (4).
Section 106 – Assignation of repairing tenancies
610.Section 106 makes provision for the assignation of repairing tenancies by inserting a new section 7D into the 2003 Act.
611.Subsections (1) to (6) of new section 7D make provision about assignation of a repairing tenancy during the repairing period, as defined in new subsection 5C of the 2003 Act. Under subsection (1) the tenant may assign the tenancy if the landlord provides consent after receiving notice from the tenant in accordance with subsection (2).
612.Subsection (2) provides that the tenant must provide the landlord with written notice of intention to assign a repairing tenancy. The notice must contain details of the proposed assignee, the terms of the proposed assignation and the date from which it is to take effect.
613.Subsection (3) provides that the landlord can withhold consent to the proposed assignee during the repairing period if there are reasonable grounds for doing so. In particular, the landlord may withhold consent if they are not satisfied that the proposed assignee would have the ability to pay the rent. They can also withhold consent if they are not satisfied that the proposed assignee would have the financial resources or skills or experience necessary to bring the land up to a standard where it could be farmed in accordance with the rules of good husbandry after the repairing period.
614.Subsection (4) provides that this last ground of objection (on skills or experience required) does not apply where the proposed assignee is engaged or intending to enrol, within a specified period, in a course of relevant agricultural training that must be completed within four years. The proposed assignee must also have made arrangements for the holding to be farmed efficiently while the course is completed.
615.Subsection (5) requires the landlord to give written notice to the tenant indicating withholding of consent within 30 days of receiving the tenant’s notice of intention to assign. If no such notice is provided by the landlord, it is taken that consent has been given.
616.Subsection (6) defines “good husbandry” by reference to schedule 6 of the Agriculture (Scotland) Act 1948.
617.At the end of the repairing period, subsection (7) provides that the provisions contained in new section 7B of the 2003 Act, pertaining to the assignation of an MLDT, apply to the assignation of a repairing tenancy.
Succession
Section 107 – Bequest of 1991 Act tenancies
618.Section 11 of the 1991 Act sets out the procedure for bequest of 1991 Act tenancies, including entitlement and procedure for the landlord to object to the bequest. Under the current legislation, the tenant can bequeath the tenancy to any of the persons who would be entitled to succeed to their estate on intestacy by virtue of the Succession (Scotland) Act 1964 and to the tenant’s son or daughter-in-law. Section 107 amends section 11 by inserting a new subsection (1A), which expands the class of persons who are entitled to be the beneficiary of a bequest.
619.Section 107 sets out the persons to whom the tenant, under the new subsection (1A), can bequeath the tenancy. Those that are already entitled to be the beneficiary under the Succession Act as mentioned above still remain so, as do the tenant’s son and daughter-in-law. However, this right has been extended to a number of additional people as set out in subsection (1A)(c) to (n).
Section 108 – Limited duration tenancies, modern limited duration tenancies and repairing tenancies: succession
620.Section 108 outlines the provisions for succession to LDTs, MLDTs and repairing tenancies.
621.Subsection (1) amends section 16 of the Succession (Scotland) Act 1964 to make provision for the new letting vehicles, MLDTs and repairing tenancies.
622.Subsection (3) amends section 21 of the 2003 Act, making provision for MLDTs and repairing tenancies by inserting a new subsection (1A) which expands the class of persons who are entitled to be the beneficiary of a bequest of an LDT, an MLDT or a repairing tenancy.
Landlord’s objection to tenant’s successor
Section 109 – Objection by landlord to legatee or acquirer on intestacy
623.Section 109 sets out a new objection process by a landlord to a legatee or acquirer.
624.Section 11 of the 1991 Act sets out the provisions for bequest of leases for 1991 Act tenancies, including the objection process. Section 12 of the 1991 Act outlines the right of the landlord to object to an acquirer of a lease under a 1991 Act tenancy on intestacy.
625.Section 109 amends sections 11 and 12 of the 1991 Act by repealing the relevant subsections which deal with the objection process and by inserting, after section 12, new sections 12A, 12B and 12C, which outline the procedures that the landlord is required to follow if the landlord wishes to object to a legatee or an acquirer under a 1991 Act tenancy.
626.Inserted section 12A outlines the procedure when the landlord is objecting to a near relative (legatee or acquirer) of the deceased tenant. The Act limits the grounds that the landlord has when objecting to a near relative.
627.Subsections (1) and (2) provide that, if a legatee or an acquirer who is a near relative of the deceased tenant gives notice to the landlord of intention to take on the tenancy, the landlord is entitled, within one month, to serve a counter-notice to that person stating that the landlord objects to receiving the person as a tenant under the lease.
628.Subsection (3) states that the landlord’s grounds of objection to a near relative are limited to three circumstances. The three grounds available to the landlord for objection are: that the person is not of good character, that the person does not have sufficient resources to enable the person to farm the holding efficiently, or that the person does not have adequate training or expertise in agriculture to enable the person to farm with reasonable efficiency.
629.Subsection (4) states that this last ground of objection does not apply where the person is engaged in a course of relevant agricultural training, or will begin such training before the end of the period of six months beginning with the date on which notice was given to the landlord of the acquisition, and also states that the training must be completed within four years of that date. That person is also required to have made arrangements for the holding to be farmed efficiently while the person completes the course.
630.Subsection (5) provides that the landlord has one month after serving the counter-notice to apply to the Land Court for an order, in the case of a legatee, declaring the bequest to be null and void or, in the case of an acquirer, terminating the lease.
631.Subsection (6) states that, if any of the grounds of objection available to the landlord are established to the satisfaction of the Land Court, the Court is required to make an order, in the case of a legatee, declaring the bequest to be null and void and, in the case of an acquirer, terminating the lease, effective from either Whitsunday or Martinmas, as the court specifies.
632.Subsection (7) provides that, if the grounds of objection are not found, the Land Court must make an order declaring that the legatee or the acquirer is the new tenant under the lease and the lease is binding on the landlord from the date of death of the deceased tenant.
633.Subsection (8) states that, where the landlord does not make such an application to the Land Court within the one month period, the counter-notice becomes invalid and the lease is binding on the landlord and the legatee or acquirer from the date of the deceased tenant’s death.
634.Section 12B sets out the procedure for objection by the landlord when the legatee or the acquirer is not a near relative of the deceased tenant.
635.Subsections (1) and (2) provide that, if a legatee or an acquirer who is not a near relative of the deceased tenant gives notice to the landlord of intention to take on the tenancy, the landlord is entitled, within one month, to serve a counter-notice to that person stating that the landlord objects to receiving the person as a tenant under the lease. The landlord has the power in the case of a legatee to declare the bequest to be null and void, and, in the case of an acquirer, to terminate the lease with effect from Whitsunday or Martinmas as the landlord specifies, but which must be at least one year and not more than two years from the date of the counter-notice.
636.Subsection (3) provides that the legatee or acquirer may make an appeal to the Land Court, within one month of receiving the counter-notice.
637.Subsections (4) and (5) state that if the legatee or acquirer can establish on any reasonable ground, to the satisfaction of the Land Court, why the bequest should not be null and void or why the lease should not be terminated, the Land Court must make an order quashing the counter-notice. If not, the Land Court must make an order confirming the counter-notice.
638.Inserted section 12C sets out supplementary provisions for landlord’s objection.
639.Subsections (1) and (2) provide that the legatee or acquirer is to have possession of the holding, pending the outcome of any objection by the landlord under section 12A or 12B. The legatee or the acquirer must have received consent from the executor and there must be no order from the Land Court directing otherwise.
640.Subsection (3) provides that, in the case of a legatee, if the bequest is declared null and void, the right to the lease is to be treated as part of the intestate estate of the deceased tenant in accordance with the Succession (Scotland) Act 1964.
641.Subsection (4) provides that, in the case of an acquirer, if the lease is terminated, that termination is to be treated as termination of the acquirer’s tenancy of the holding for the purposes of the compensation provisions in Parts 4 and 5 of the 1991 Act. Subsection (5) also states that the acquirer is not entitled to compensation for disturbance.
642.Subsection (5) of section 109 of the Act repeals section 25 of the 1991 Act relating to the termination of tenancies acquired by succession. The ability of the landlord to object to an incoming tenant who has succeeded to the tenancy on the death of the previous tenant is replaced by the objection procedure in new sections 12A to 12B. Part 4 of schedule 2 of the Act also contains other amendments and repeals consequential on this change, including the repeal of schedule 2 of the 1991 Act (which contained the grounds on which a landlord could object to a near relative under section 25).
