At the end of January the Scottish Government passed an order that brought some further provisions of the Land Reform (Scotland) Act into force.
This included the rules for the amnesty on tenants’ improvements. If you are a landlord or a tenant of an agricultural holding, these may well affect you.
If a tenant carries out any type of work that is classed as an improvement to the holding, then he may be entitled to claim compensation for that improvement at the end of the lease.
To qualify for compensation, the tenant has to be able to show that the correct notice was given under the law. The type of notice needed depends on the type of work being done. Some major works need landlord consent, others need notification three months in advance of work starting.
Many tenants will have done work without putting the right notices in place.
The amnesty rules are meant to deal with this. Under these rules, tenants have a period of time to tell their landlords about old improvements that they have done on the farm. Using this procedure, tenants can seek to have them recorded as improvements that will qualify for compensation at the end of the lease.
The amnesty period will run from 13 June 2017 for a period of three years.
During that period tenants should make a note of any work that they have done that counts as an improvement rather than just routine maintenance and repair.
These should then be submitted to the landlord, who may contest the application on certain grounds. If the application is successful, then the claimed improvements will qualify for compensation.
It is vital to note that any improvement work done after the start of the amnesty period must comply the strict rules on notices. Greater care will be needed in the future.
Tenants would be well advised to review all of the work that they have done on the holding to see if there are any valuable improvement works that were done in the past without notice. Landlords will need to consider carefully what their response should be to any notices that they might receive from tenants under the amnesty scheme.
The Independent Adviser on Tenant Farming has issued guidance on the new rules and how they should work. http://www.gov.scot/Resource/0048/00488002.pdf