Land Reform (Scotland) Act 2025

Rent review

35 Rent review: 1991 Act tenancies

(1) The Agricultural Holdings (Scotland) Act 1991 Act is modified as follows.

(2) In schedule 1A (rent review) (as inserted by section 101 of the Land Reform (Scotland) Act 2016)—

(a) in paragraph 7, for sub-paragraph (4) substitute—

“(4) In determining the fair rent for the holding, the Land Court must have regard to—

(a) the productive capacity of the holding,

(b) the open market rent of any fixed equipment provided by the landlord that is used for a purpose that is not an agricultural purpose,

(c) the open market rent of any land forming part of the holding that is used for a purpose that is not an agricultural purpose,

(d) the rent payable on comparable holdings,

(e) the prevailing economic conditions in the sectors of agriculture relevant to the holding.

(5) But in determining the fair rent for the holding, the Land Court is to take no account of—

(a) the amount by which the rental value of the holding has been increased by improvements to the extent determined in accordance with sub-paragraph (8),

(b) any reduction in the rental value of the holding caused by a matter of a kind mentioned in sub-paragraph (11),

(c) any effect on the rent of the tenant being in occupation of the holding.

(6) For the purposes of sub-paragraph (4)(b) and (c), the “open market rent” means the rent at which any fixed equipment or land used for a purpose that is not an agricultural purpose might reasonably be expected to be let on the open market by a willing landlord to a willing tenant.

(7) For the purpose of sub-paragraph (4)(d), the Land Court is—

(a) so far as possible, to have regard to information about—

(i) the rent previously offered or agreed in respect of the holding or another holding,

(ii) the rent fixed by the Land Court for the holding or another holding,

(b) to take account of a distortion in the market caused by the lack of available lets only for the purposes of—

(i) identifying if the amount of rent offered or agreed for a holding is in excess of what might otherwise be considered the fair rent for the holding, and

(ii) discounting the amount paid that is in excess of what might otherwise be considered fair.

(8) The amount of increase in the rental value of the holding caused by an improvement that is to be disregarded in accordance with sub-paragraph (5)(a) is the proportional amount of the increase corresponding to—

(a) the proportion of the cost of carrying out the improvement that was met at the tenant’s expense (see sub-paragraph (9)), and

(b) the proportion of the cost of carrying out the improvement—

(i) that was met at the landlord’s expense, and

(ii) in respect of which the landlord has received, or will receive, a grant.

(9) For the purposes of sub-paragraph (8)(a)—

(a) an improvement is to be regarded as having been carried out at the tenant’s expense (wholly or partly as the case may) regardless of whether the tenant has been, or will be, reimbursed for the expense incurred by a grant,

(b) an improvement is not to be regarded as having been carried out at the tenant’s expense (wholly or partly)—

(i) if the tenant has, in respect of the expense incurred in carrying out the improvement, been made or given an equivalent allowance or benefit by the landlord,

(ii) if the improvement was carried out under an obligation imposed on the tenant by the terms of the lease.

(10) For the purposes of sub-paragraph (8)(a), the continuous adoption by the tenant of a standard or system of farming more beneficial to the holding—

(a) than the standard or system required by the lease, or

(b) where no standard or system of farming is required by the lease, than the standard or system of farming normally practised on comparable holdings,

is to be considered an improvement carried out wholly at the tenant’s expense.

(11) The matters referred to in sub-paragraph (5)(b) are—

(a) the dilapidation or deterioration of, or damage to, fixed equipment or land caused or permitted by the tenant,

(b) the use of the land or part of the land, or changes to the land, for a purpose that is not an agricultural purpose, or

(c) the carrying out of conservation activities on the land.”,

(b) for paragraph 9 substitute—

Power to make further provision

9 (1) The Scottish Ministers may by regulations make further provision for the purposes of paragraph 7(4) and (5).

(2) Before laying any draft Scottish statutory instrument containing regulations under this paragraph before the Scottish Parliament, the Scottish Ministers must consult such persons as they consider appropriate.

(3) Regulations under this paragraph are subject to the affirmative procedure.”,

(c) paragraphs 10 to 12 are repealed,

(d) in paragraph 13, the definition of “surplus residential accommodation” is repealed.

36 Rent review: limited duration tenancies

(1) The Agricultural Holdings (Scotland) Act 2003 is modified as follows.

(2) For section 9B (determination of rent) (as inserted by section 102 of the Land Reform (Scotland) Act 2016) substitute—

“9B Determination of rent

(1) On review, the rent payable is the fair rent for the tenancy taking account of all the circumstances.

(2) In determining the fair rent for the tenancy, regard is to be had to—

(a) the productive capacity of the land comprised in the lease,

(b) the open market rent of any fixed equipment provided by the landlord that is used for a purpose that is not an agricultural purpose,

(c) the open market rent of any land comprised in the lease that is used for a purpose that is not an agricultural purpose,

(d) the rent payable for comparable tenancies,

(e) the prevailing economic conditions in the sectors of agriculture relevant to the land comprised in the lease.

(3) But in determining the fair rent for the tenancy, no account is to be taken of—

(a) the amount by which the rental value of the land has been increased by improvements to the extent determined in accordance with subsection (6),

(b) any reduction in the rental value of the land caused by a matter of a kind mentioned in subsection (9),

(c) any effect on the rent of the tenant being in occupation of the holding.

(4) For the purposes of subsection (2)(b) and (c), the “open market rent” means the rent at which any fixed equipment or land used for a purpose that is not an agricultural purpose might reasonably be expected to be let on the open market by a willing landlord to a willing tenant.

(5) For the purpose of subsection (2)(d)—

(a) so far as possible, regard is to be had to information about—

(i) the rent previously offered or agreed in respect of the tenancy or another tenancy,

(ii) the rent fixed by the Land Court for the tenancy or another tenancy,

(b) account is to be taken of a distortion in the market caused by the lack of available lets only for the purposes of—

(i) identifying if the amount of rent offered or agreed for a tenancy is in excess of what might otherwise be considered a fair rent for the tenancy, and

(ii) discounting the amount paid that is in excess of what might otherwise be considered fair.

(6) The amount of increase in the rental value of the land caused by an improvement that is to be disregarded in accordance with subsection (3)(a) is the proportional amount of the increase corresponding to—

(a) the proportion of the cost of carrying out the improvement that was met at the tenant’s expense (see subsection (7)), and

(b) the proportion of the cost of carrying out the improvement—

(i) that was met at the landlord’s expense, and

(ii) in respect of which the landlord has received, or will receive, a grant.

(7) For the purposes of subsection (6)—

(a) an improvement is to be regarded as having been carried out at the tenant’s expense (wholly or partly as the case may) regardless of whether the tenant has been, or will be, reimbursed for the expense incurred by a grant,

(b) an improvement is not to be regarded as having been carried out at the tenant’s expense (wholly or partly)—

(i) if the tenant has, in respect of the expense incurred in carrying out the improvement, been made or given an equivalent allowance or benefit by the landlord,

(ii) if the improvement was carried out under an obligation imposed on the tenant by the terms of the lease.

(8) For the purposes of subsection (6)(a), the continuous adoption by the tenant of a standard or system of farming more beneficial to the land comprised in the lease—

(a) than the standard or system required by the lease, or

(b) where no standard or system of farming is required by the lease, than the standard or system of farming normally practised on comparable tenancies,

is to be considered an improvement carried out wholly at the tenant’s expense.

(9) The matters referred in subsection (3)(b) to are—

(a) the dilapidation or deterioration of, or damage to, fixed equipment or land caused or permitted by the tenant,

(b) the use of the land or part of the land, or changes to the land, for a purpose that is not an agricultural purpose, or

(c) the carrying out of conservation activities on the land.

(10) The rent determined in accordance with this section is to take effect from the rent agreement date.

9BA Power to make further provision

(1) The Scottish Ministers may by regulations make further provision for the purposes of section 9B(2) and (3).

(2) Before laying any draft Scottish statutory instrument containing regulations under this section before the Scottish Parliament, the Scottish Ministers must consult such persons as they consider appropriate.

(3) Regulations under this paragraph are subject to the affirmative procedure.”.

(3) Section 9C is repealed.

37 Rent review: repairing tenancies

(1) The Agricultural Holdings (Scotland) Act 2003 is modified as follows.

(2) In section 9 (review of rent under limited duration tenancies, modern limited duration tenancies and repairing tenancies) (as amended by section 102 of the Land Reform (Scotland) Act 2016)—

(a) in subsection (1A), at the beginning insert “Except where subsection (1B) applies,”,

(b) after subsection (1A) insert—

“(1B) This subsection applies where a lease constituting a repairing tenancy is within its repairing period.”.