Land Reform (Scotland) Act 2025

Prospective

25 Compensation for improvements S

(1) The Agricultural Holdings (Scotland) Act 1991 is modified by subsections (2) to (11).

(2) In section 14A (landlord improvement notices), in subsection (2), after “improvement” in the second place it appears insert “of a kind referred to or”.

(3) In section 33 (improvements), in the definition of “new improvement”, for “specified” substitute “of a kind referred to or specified”.

(4) In section 33A (agreements as to compensation for improvements), in paragraph (a), for “specified in Part II or III” substitute “of a kind referred to in paragraph 3 or specified in paragraph 5”.

(5) In section 34 (right to compensation for improvements), in subsection (6), for “32” substitute “5(k)”.

(6) In section 35 (payment of compensation by incoming tenant), in subsection (3), for “of a kind referred to in Part III” substitute “specified in paragraph 5”.

(7) In section 37 (consents necessary for compensation for some improvements)—

(a) in subsection (1), in paragraph (c), for “specified in Part I” substitute “of a kind referred to in paragraph 1”,

(b) after that subsection insert—

“(1A) Subsections (1B) to (1H) apply to a new improvement of a kind referred to in paragraph 1 of schedule 5.

(1B) A tenant must—

(a) give notice to the landlord requesting consent to the proposed improvement in such form as may be prescribed, and

(b) at the time of giving notice, provide any prescribed information about the improvement.

(1C) If the landlord has not responded to a notice requesting consent under subsection (1B) within the period of 70 days beginning with the day on which the notice is given, the landlord is deemed to have consented to the improvement unconditionally.

(1D) Where a landlord refuses consent, the landlord must provide reasons in writing explaining the basis of the refusal including, in particular, by reference to the matters described in section 39(2B).

(1E) Where the parties have been unable to agree terms for consent within the 70 day period described in subsection (1C), the landlord must, as soon as reasonably practicable after the end of that period, provide the tenant with reasons in writing explaining the basis why the landlord has not consented to the proposed improvement including, in particular, by reference to the matters described in section 39(2B).

(1F) Where—

(a) the landlord has refused consent to the proposed improvement (whether or not reasons have been provided under subsection (1D)), or

(b) the parties have been unable to agree terms for consent within the 70 day period described in subsection (1C),

the tenant may apply to the Land Court for approval to carry out the improvement.

(1G) Subsections (2) to (4) of section 39 apply to an application for approval under subsection (1F) as they apply to an application for approval under section 39(2).

(1H) In the event that parties agree on the terms as to compensation, or otherwise on which the improvement is to be carried out, it is immaterial to the payment of such compensation whether the requirements for notice under this section were complied with.”.

(8) In section 38 (notice required of certain improvements)—

(a) in subsection (1)—

(i) in paragraph (c), for “specified in Part II” substitute “of a kind referred to in paragraph 3”,

(ii) in the closing words, after “(3)” insert “and (3A)”,

(b) after subsection (3) insert—

“(3A) Notice is in accordance with this subsection if—

(a) it is in such form as may be prescribed, and

(b) it contains (or is accompanied by) any prescribed information about the improvement.”.

(9) In section 39 (compensation for schedule 5, Part II improvements conditional on approval of Land Court in certain cases)—

(a) in subsection (1), for “specified in Part II” substitute “of a kind referred to in paragraph 3”,

(b) after subsection (1) insert—

“(1A) A notice of objection under subsection (1) must provide the landlord’s reasons for objecting to the tenant’s carrying out of the improvement or to the manner in which the tenant proposes to carry it out including, in particular, by reference to the matters described in subsection (2B).”,

(c) after subsection (2) insert—

“(2A) In deciding whether or not to approve the carrying out of the improvement (or approve the improvement subject to conditions), the Land Court is to consider the matters set out in subsection (2B).

(2B) The matters are—

(a) whether the improvement is likely to (either or both)—

(i) have a positive effect on the efficient management of the holding,

(ii) facilitate or enhance sustainable or regenerative agricultural production on the holding, and

(b) whether it is reasonable, in all the circumstances of the case, for the improvement to be carried out.

(2C) The following improvements, unless the contrary is shown, are presumed to facilitate or enhance sustainable or regenerative agricultural production—

(a) laying down permanent pasture,

(b) making water-meadows,

(c) warping or weiring land,

(d) re-wetting wetlands,

(e) creating silvopasture and silvoarable systems,

(f) restoring peatland,

(g) erecting, altering or enlarging buildings, facilities or other structures required for the creation or storage of energy—

(i) from a renewable source (such as a wind turbine or solar panel), and

(ii) which is primarily to be used on the holding.”.

(10) In section 73 (power of the Secretary of State to vary schedules 5 and 6)—

(a) before subsection (1) insert—

“(A1) Without prejudice to subsection (1), the Scottish Ministers may by regulations modify section 39(2C) and paragraphs 2, 4 and 5 of schedule 5 to add, amend or remove an improvement.”,

(b) in subsection (2)—

(i) after “order” in the first place in which it appears, insert “or regulations”,

(ii) after “takes” insert “or, as the case may be, regulations take”,

(iii) after “order” in the last place in which it appears, insert “or regulations”,

(c) in subsection (3)—

(i) after “order” in the first place in which it appears, insert “or regulations”,

(ii) after “comes” insert “or, as the case may be, regulations come”,

(iii) after “order” in the last place in which it appears, insert “or regulations”,

(d) after subsection (3) insert—

“(3A) Regulations under this section are subject to the negative procedure (see section 28 of the Interpretation and Legislative Reform (Scotland) Act 2010).”,

(e) the section title becomes “Compensation for improvements: power to modify lists”.

(11) For schedule 5 substitute—

“Schedule 5 S New improvements for which compensation may be payable

(introduced by section 33)

Part 1 S Improvements for which consent is required

1 An improvement which makes a change to land or fixed equipment on the holding that—

(a) means that the land or fixed equipment affected by the change cannot, or is unlikely to, return to its former agricultural use, or

(b) otherwise, has a long term or significant impact on the management of the holding (as a whole).

2 For example, improvements for which consent may be required include—

(a) irrigating land,

(b) making or planting osier beds,

(c) making or planting of short rotation coppice,

(d) making water-meadows,

(e) warping or weiring land,

(f) creating silvopasture and silvoarable systems,

(g) restoring peatland,

(h) haulage or other work done by the tenant in aid of the carrying out of any improvement made by the landlord for which the tenant is liable to pay increased rent.

Part 2 S Improvements for which notice is required

3 An improvement which makes a change to land or fixed equipment on the holding that does not have a long term or significant impact on the management of the holding (as a whole).

4 For example, improvements for which prior notice may be required include—

(a) land drainage,

(b) laying down permanent pasture,

(c) re-wetting wetlands,

(d) the construction of silos,

(e) making or improving farm access or service roads, bridges and fords,

(f) making or improving watercourses, ponds or wells,

(g) works for the application of water power for agricultural or domestic purposes or for the supply of water for such purposes,

(h) making or removing permanent fences, stone dykes and gates,

(i) reclaiming waste land,

(j) making or renewing embankments, sluices and other flood-prevention measures,

(k) providing stells, fanks, folds, dippers, pens and bughts necessary for the proper conduct of the holding,

(l) planting or renewing shelterbelts,

(m) the installation, provision, distribution or storage of electricity, gas, power, heat or light,

(n) erecting, altering or enlarging buildings, facilities or other structures including, in particular, for—

(i) closed loop production in a controlled environment including hydroponics, glass houses and vertical farming,

(ii) processing agricultural products from the holding or any larger business of which the holding forms part,

(iii) the management or storage of slurries or manures,

(iv) the creation or storage of energy, which is primarily to be used on the holding, from a renewable source (such as a wind turbine or solar panel),

(o) making or improving permanent yards, loading banks and stocks,

(p) erecting hay or sheaf sheds, sheaf or grain drying racks, and implement sheds,

(q) providing fixed threshing mills, barn machinery and fixed dairying plant,

(r) provision of means of sewage, waste or pollutant disposal, or provision of means of managing water on land,

(s) repairing fixed equipment, being equipment reasonably required for the efficient farming of the holding, other than repairs which the tenant is under an obligation to carry out,

(t) providing means to store silage,

(u) works to dwellings,

(v) making gardens,

(w) planting orchards, fruit bushes, vines and other such plants.

Part 3 S Improvements for which no consent or notice is required

5 The improvements for which no consent or notice is required are—

(a) protecting trees grown for agricultural purposes against animals including, in particular, fruit trees, shelterbelts and those grown for silvopasture or silvoarable systems,

(b) creating species-rich pasture,

(c) converting the holding (or a significant part of it) to a standard of organic farming that is capable of being accredited by a recognised accreditation organisation,

(d) improving soil health, structure or condition including, in particular, by—

(i) clay burning,

(ii) liming (including chalking) land,

(iii) marling or claying land,

(iv) applying soil improvers, conditioners, digestates, manure or fertiliser, whether organic or inorganic, to the land,

(e) improving permanent pasture by cultivation and re-seeding,

(f) control of bracken, whins or broom growing on the holding at the commencement of the tenancy,

(g) removing tree roots, boulders, stones or other similar obstacles to cultivation from arable land or from permanent grass land,

(h) forming hedges,

(i) creating field margins, including uncropped field margins, to provide or improve habitats for wild animals, insects and birds,

(j) the consumption on the holding of corn (whether produced on the holding or not) or of cake or other feeding stuff not produced on the holding by horses, cattle, sheep, pigs or poultry,

(k) laying down temporary pasture with clover, grass, lucerne, sainfoin, or other seeds, sown more than 2 years prior to the termination of the tenancy, in so far as the value of the temporary pasture on the holding at the time of quitting exceeds the value of the temporary pasture on the holding at the commencement of the tenancy for which the tenant did not pay compensation.”.

(12) The Agricultural Holdings (Scotland) Act 2003 is modified by subsections (13) to (17).

(13) In section 10 (increase in rent: landlord’s improvements), in subsection (1), after “one” insert “of a kind referred to or”.

(14) In section 10A (landlord improvement notices), in subsection (3), after second “improvement” insert “of a kind referred to or”.

(15) In section 45 (right to compensation for improvements)—

(a) in subsection (2), after “improvements” insert “of a kind referred to or”,

(b) in subsection (3), for “32” substitute “5(k)”,

(c) in subsection (5)—

(i) after “order”, in the first place in which it appears, insert “or regulations”,

(ii) after “comes” insert “or, as the case may be, regulations come”,

(iii) after “order”, in the last place in which it appears, insert “or regulations”.

(16) In section 48 (consent required for compensation in certain cases), for “specified in Part I” substitute “of a kind referred to in paragraph 1”.

(17) In section 49 (notice required for certain improvements), in subsection (1), for “specified in Part II” substitute “of a kind referred to in paragraph 3”.

(18) The Land Reform (Scotland) Act 2016 is modified by subsection (19).

(19) In section 27 (Tenant Farming Commissioner: codes of practice), in subsection (2)(b), for “and recording” substitute “, recording and compensating”.

Commencement Information

I1 S. 25 not in force at Royal Assent, see s. 47(2)