Part 2

Leasing land
Chapter 3

Agricultural holdings

Resumption

Resumption in respect of limited duration tenancies and repairing tenancies
21
1
The Agricultural Holdings (Scotland) Act 2003 is modified as follows.
2
In section 17 (resumption of land by landlord)—
a
in subsection (2), after paragraph (a) insert—
aa
nominate a person who appears to the landlord to meet the requirements to be a valuer mentioned in paragraph 3(4) of schedule 2,
,
b
in subsection (3), for “28 days” substitute “6 weeks”,
c
after subsection (4) insert—
4A
In addition to—
a
the reduction in rent, and
b
any claim for compensation the tenant may have under this Act (or under the lease) in respect of the resumed land,
the tenant is to be paid an amount determined in accordance with schedule 2 as compensation for the tenant’s interest in the value of the land being resumed.
.
3
After section 17 insert—

Withdrawal of notice of resumption
17A
1
Except where the tenant has given notice terminating the tenancy at the date of resumption of possession under section 17(3), a landlord may withdraw a notice of resumption given in accordance with that section at any time before the date specified in section 17(2)(c).
2
But where the notice of resumption relates to the all of the land comprised in the lease, the notice may not be withdrawn without the tenant’s consent.
3
Where the Tenant Farming Commissioner has appointed a valuer under paragraph 3 of schedule 2, the landlord must, at the same time as withdrawing the notice of resumption, send a copy of the withdrawal to the Commissioner.
4
Where a landlord withdraws a notice of resumption, the tenant is entitled to recover from the landlord any loss or expense reasonably incurred in reliance on the landlord’s notice of resumption.
.
4
In section 91 (orders and regulations)—
a
in subsection (3)(b), after “38P(2)” insert “or paragraph 3(3)(b) of schedule 2”,
b
in subsection (4)(b), after “74A” insert “or paragraph 6(5) of schedule 2”.
5
In section 93 (interpretation), after the definition of “tenant” insert—
- “Tenant Farming Commissioner” means the person appointed as Tenant Farming Commissioner under section 10(1) of the Land Reform (Scotland) Act 2016,
,
6
After the schedule insert—
Schedule 2

Determination of compensation for value of land resumed
(introduced by section 17(2) and (4A))

Interpretation
1
In this schedule, “valuer” means a person appointed under paragraph 2(2), 3(2) or, as the case may be, 4(5)(b).

Appointment of valuer by parties
2
1
This paragraph applies where a notice of resumption has been given under section 17(2).
2
The landlord must appoint as valuer—
a
the person nominated in the notice given under section 17(2), provided sub-paragraph (3) does not apply, or
b
the person agreed on as the valuer by the parties during negotiations under sub-paragraph (5).
3
This sub-paragraph applies where—
a
the tenant has given—
i
notice to terminate the tenancy under section 17(4), or
ii
a notice of objection under sub-paragraph (4), or
b
the period mentioned in section 17(4) or, as the case may be, sub-paragraph (4) has not ended, no notice as mentioned in paragraph (a)(i) or (ii) having been given.
4
Where the tenant objects to a person nominated to be the valuer in a notice given under section 17(2), the tenant must, within the period of 6 weeks beginning with the date on which the notice is given, give notice of the objection to the landlord.
5
Where a notice of objection by the tenant is given under sub-paragraph (4), the parties may enter into negotiations with a view to agreeing on a person to be appointed as the valuer, being a person who appears to both parties to meet the requirements mentioned in paragraph 3(4).
6
The landlord may request that the Tenant Farming Commissioner appoint a valuer under paragraph 3 where—
a
the parties do not enter into negotiations of a kind mentioned in sub-paragraph (5), or
b
no agreement is reached on the appointment of a person as valuer during such negotiations.
7
A request made under sub-paragraph (6)—
a
must be copied to the tenant,
b
must include—
i
copies of the notice given under section 17(2) and the notice of objection given under sub-paragraph (4), and
ii
details of any negotiations undertaken under sub-paragraph (5), including any relevant information about persons rejected as valuer by either party.
8
A notice given under section 17(2) is deemed to be of no effect if, within the period of 10 weeks beginning with the date on which the notice is given—
a
the landlord does not appoint a person as valuer in accordance with sub-paragraph (2), or
b
the landlord does not make a request under sub-paragraph (6).
9
Where the tenant gives notice under section 17(3) to terminate the tenancy the landlord must, where a request has been made under sub-paragraph (6), give notice to the Commissioner and to any valuer appointed by virtue of that request.

Appointment of valuer by Tenant Farming Commissioner
3
1
This paragraph applies where the Tenant Farming Commissioner receives a request under paragraph 2(6).
2
The Commissioner must, before the expiry of the period mentioned in sub-paragraph (3), appoint as valuer a person, who meets the requirements mentioned in sub-paragraph (4), to—
a
carry out the assessment mentioned in paragraph 6(1), and
b
calculate the amount to be payable by the landlord to the tenant as compensation for the value of the land being resumed.
3
The period is—
a
the period of 28 days beginning with the date on which the notice is served, or
b
such other period specified by the Scottish Ministers by regulations.
4
The requirements referred to in sub-paragraph (2) are that the person appears to the Commissioner—
a
to be independent of the landlord and the tenant, and
b
to possess qualifications, knowledge and experience suitable for assessing the—
i
value of agricultural land, both with vacant possession and where subject to agricultural holdings, and
ii
compensation that may be payable to tenants and landlords of such holdings.
5
The Commissioner must give notice in writing to the tenant and the landlord of the name and address of the person appointed under sub-paragraph (2).

Objection to valuer appointed by Tenant Farming Commissioner
4
1
This paragraph applies where the tenant or the landlord objects to the person appointed under paragraph 3(2) by the Commissioner on one or more of the grounds mentioned in sub-paragraph (2).
2
The grounds are that the person—
a
is not independent of the landlord or, as the case may be, the tenant, or
b
does not possess the qualifications, knowledge and experience mentioned in paragraph 3(4)(b).
3
The tenant or, as the case may be, the landlord may apply to the Land Court to appoint a person as the valuer in place of the person appointed by the Commissioner.
4
An application under sub-paragraph (3)—
a
must—
i
be made before the expiry of the period of 14 days beginning with the date of the notice under paragraph 3(5), and
ii
state the ground of objection to the person appointed by the Commissioner, and
b
may propose a person to be appointed as the valuer in place of that person.
5
The Land Court may, on an application under sub-paragraph (3)—
a
reject the objection, or
b
appoint a person as the valuer (whether a person proposed in the application or not).
6
The decision of the Land Court on an application under sub-paragraph (3) is final.

Valuer’s expenses
5
1
The landlord is responsible for meeting the expenses incurred by the valuer in carrying out functions under this schedule.
2
Where expenses have been met by the Tenant Farming Commissioner in connection with the appointing of a valuer, the Commissioner is entitled to recover them from the landlord.

Assessment of value of land etc.
6
1
The valuer is to assess the value of the land being resumed—
a
if sold with vacant possession, and
b
if sold with the tenant still in occupation.
2
In assessing the value of the land under sub-paragraph (1), the valuer—
a
is to have regard to the value that would be likely to be agreed between a reasonable seller and buyer of such land assuming the seller and buyer are, as respects the transaction, willing,
b
is to take account—
i
of when the landlord would in the normal course of events have been likely to recover vacant possession of the land from the tenant,
ii
of the terms and conditions of any lease, other than the lease of the land comprised in the tenancy, affecting the land,
c
is to take no account of—
i
the existence of any person to whom the tenant could assign the lease under section 7, 7B or, as the case may be, 7D or to whom the lease could be bequeathed under section 21,
ii
the absence of the period of time during which the land would, on the open market, be likely to be advertised and exposed for sale,
iii
any factor attributable to any use of the land which is or would be unlawful,
iv
any increase in the value of the land resulting from any improvements in relation to which the tenant would be entitled to compensation under section 45,
v
any increase, or reduction, in the value of the land resulting from the use of any of the land, or changes to the land, for a purpose that is not one permitted by the lease,
vi
any reduction in the value of the land resulting from any dilapidation or deterioration of, or damage to, fixed equipment or land caused or permitted by the tenant in relation to which the landlord would be entitled to compensation.
3
For the purposes of sub-paragraph (2)(c)(iv)—
a
subject to paragraph (b), “improvements” is to be construed by reference to schedule 5 of the 1991 Act, and
b
the continuous adoption by the tenant of a standard of farming more beneficial to the land than the standard or system required by the lease or, in so far as no system of farming is so required, than the system of farming normally practised on comparable agricultural land in the district, is to be treated as an improvement executed at the tenant’s expense.
4
The valuer is to calculate, in accordance with paragraph 8, the amount to be payable by the landlord to the tenant as compensation for the value of the land being resumed.
5
The Scottish Ministers may by regulations amend sub-paragraphs (2) and (3) so as to—
a
add,
b
remove,
c
vary the description of,
a matter which the valuer must have regard to, take account of or take no account of in assessing the value of the land under sub-paragraph (1).

Valuation: further provision
7
1
The valuer is—
a
to invite the landlord and the tenant to make written representations about the assessment under paragraph 6(1), and
b
to have regard to any such representations.
2
The valuer may—
a
enter onto land at reasonable times and having given reasonable notice, and
b
make any reasonable request of the landlord and tenant (with which they must comply),
for the purposes of any assessment under paragraph 6(1).
3
In the event that the landlord or, as the case may be, tenant does not provide entry to the valuer, respond to a request of the valuer or otherwise seeks to obstruct or delay the valuation, the valuer may—
a
apply to the Land Court for an order requiring the relevant party to comply, and
b
recover the cost of doing so from the party.
4
The valuer is not to be held to be in breach of a requirement of this schedule where such breach arises as a result of the actions of the tenant or the landlord.

Amount payable by landlord to tenant
8
The amount to be payable by the landlord to the tenant in respect of the value of the land being resumed is to be half of the difference between the value of the land being resumed—
a
if sold with vacant possession, and
b
if sold with the tenant still in occupation,
(both as assessed under paragraph 6(1) or, as the case may be, 10(3)(a)).

Notice of assessment
9
1
The valuer must, before the expiry of the period mentioned in sub-paragraph (2), serve a notice in writing, specifying the matters mentioned in sub-paragraph (3), on—
a
the tenant, and
b
the landlord.
2
The period is the period of 8 weeks beginning with—
a
the date on which the valuer is appointed by the landlord under paragraph 2(2),
b
the date on which the period, within which an application under paragraph 4(3) may be made, expires, or
c
where such an application is made, the date of the Land Court’s decision on it.
3
The matters are—
a
the value, assessed under paragraph 6(1), of the land being resumed—
i
if sold with vacant possession, and
ii
if sold with the tenant still in occupation,
b
the amount, calculated in accordance with paragraph 8, to be payable by the landlord to the tenant in respect of compensation for the value of the land being resumed.
4
The notice must also—
a
be dated,
b
state the date of valuation of each of the values and the amount mentioned in sub-paragraph (3), and
c
set out how the valuer arrived at each of those values and that amount.
5
The notice may also contain or be accompanied by any other information that the valuer considers appropriate.
6
A notice served under sub-paragraph (1) is a “notice of assessment”.

Appeal to Lands Tribunal against valuer’s assessment
10
1
The tenant or the landlord may appeal to the Lands Tribunal against a notice of assessment.
2
An appeal under this paragraph must—
a
state the grounds on which it is being made, and
b
be lodged before the expiry of the period of 21 days beginning with the date the notice of assessment was served.
3
The Lands Tribunal may—
a
reassess any value mentioned in paragraph 6(1) (and any factor affecting the value),
b
determine the amount to be payable by the landlord to the tenant in respect of the value of the land being resumed.
4
The valuer whose assessment is appealed against may be a witness in the appeal proceedings.
5
In the appeal proceedings, in addition to the landlord and the tenant, the following persons are entitled to be heard—
a
where the landlord is a creditor in a standard security, the owner of the land,
b
where the landlord is the owner of the land, any creditor in a standard security over the land or any part of it.
6
The Lands Tribunal is to give written reasons for its decision on an appeal under this paragraph.
7
The decision of the Lands Tribunal in an appeal under this paragraph is final.

Referral of certain matters by Lands Tribunal to Land Court
11
Where, in an appeal before the Lands Tribunal under paragraph 10, an issue of law arises which may competently be determined by the Land Court by virtue of this Act or the 1991 Act, the Tribunal is to refer the issue to the Land Court for determination unless the Tribunal considers that it is not appropriate to do so.
.