CHANGES to legislation aimed at enabling secure tenants to realise the value in their tenancy, should they relinquish it, while at the same time potentially creating an opportunity for new entrants to farming, are being brought forward.

Legislation to implement the new Relinquishment and Assignation provisions in the 2016 Land Reform Act has begun its journey through the Scottish Parliament. Three Statutory Instruments enacting the provisions were laid on Friday, December 11, and are expected to become law before the end of February 2021.

The provisions allow an existing tenant to relinquish the tenancy on payment by the landlord of a statutory valuation based on the value of the tenancy and the tenant’s improvements. If the landlord does not wish to pay the tenant the statutory valuation, the tenant can assign it for value to a new entrant or to an individual who is progressing in farming.

Commenting on the laying of The Agricultural Holdings (Relinquishment and Assignation) (Scotland) Regulations 2020, Rural Economy Secretary Fergus Ewing said: “These changes will assist the tenant farming sector in moving forward while supporting those who wish to progress towards a well-deserved retirement or leave the sector. I know that for some tenant farmers who are anxious about what happens in the future and who want to move on but feel they cannot, this legislation will provide welcome peace of mind. It will also help new entrants find a suitable opportunity. This reform has the potential to make a positive difference to the future of our vital tenant farming sector, as part of a stronger, more robust and forward looking agricultural industry.”

The Scottish Tenant Farmers Association welcomed the news. Chairman Christopher Nicholson said: “It has been a long haul to get this part of the Land Reform Act reform into practice and this news will be greatly welcomed by a number of tenants who have been waiting for the past three years to put their retirement plans into action and make way for the next generation.

"Delays in implementing relinquishment and assignation have been very frustrating for tenants who have felt time is not on their side. As the future of agriculture becomes ever more uncertain many tenants have felt they can wait no longer and have had to leave their farms without being able to benefit from the statutory relinquishment process.

“Last week’s announcement means the relinquishment option will be available in a couple of months’ time, giving those wishing to exit farming time to plan their futures," said Mr Nicholson. "Given the statutory timescales, retiring tenants may be able to complete the relinquishment process by the end of 2021. The Tenant Farming Commissioner has an important statutory role to play in appointing an independent valuer to place a value on the tenant’s interest in the tenancy as well as his improvements. This is an entirely new procedure, and we can expect Bob McIntosh to update current guidelines shortly and establish a panel of trained valuers.

“Fortunately, in anticipation of the legislation, a number of relinquishments and assignations have been amicably agreed with landlords over the last couple of years, so the principles behind valuing tenancies and even assignations have already been tried and tested and some useful precedents set.

“The Land Reform Act has been a complex piece of legislation and, thanks to Brexit and the Covid pandemic, it is unlikely to be fully implemented in this parliament. Relinquishment and assignation are important pieces in the tenancy reform jigsaw and will help break the logjam at the top of the tenanted sector while also providing opportunities to encourage elderly tenants to retire and make way for the next generation of farmers.”

Sarah Jane Laing, chief executive of Scottish Land and Estates, said: “Our members are wholly committed to a thriving tenant farming sector. If a tenant wants to retire or relinquish their tenancy then constructive discussions with their landlord should be the first step. There is nothing to stop landlords and tenants coming to a mutually satisfactory agreement ahead of these measures coming into force, and we are pleased that many have already done so. These new provisions provide another route for those who wish to exit the sector.”