Category: TF News

Practical on-farm amnesty days call for tenant farmers to act now

A series of meetings held across Scotland have called for tenant farmers to act now to record and agree improvements as part of the tenant amnesty.

Last week saw the conclusion of a round of meetings, held by the Scottish Tenant Farmers Association (STFA), supported by the Scottish Land Commission, which demonstrated and explained to tenant farmers how to carry out the amnesty for tenant’s improvements. 

Tenant farmers have until June 2020 to consider if they have improvements to notify their landlord about and the practical meetings held over the last few months opened up discussion with tenants and land agents about the process.

The meetings took place on farms across the country and provided practical examples of tenant’s improvements and fixtures alongside practical discussion about the nature of the improvement and if they were eligible for the amnesty.

The meetings also provided step by step guidance on going through the amnesty process and explaining what evidence and information is required to demonstrate that the improvement was carried out by the tenant.

Commenting on the importance of the amnesty Tenant Farming Commissioner, Bob McIntosh said:

“The meetings have been a good opportunity to encourage tenant farmers to begin the amnesty process and to prepare a definitive list of improvements that may be eligible for compensation at waygo.  Tenants may be able to claim for the improvements even if some procedures weren’t followed when they were initially made.

“It is really important to emphasise that this amnesty is only taking place for three years – and we’re half way through already.  If tenant farmers have not started, they need to get started now.”

STFA Chairman Christopher Nicholson said:

“Completing the tenants’ amnesty is one of the most important tasks most tenants will ever undertake. Not only will this regularise and record improvements, but identifying tenant’s improvements and fixtures will be essential for the new rent test due to be rolled out in the next year or so.

“The amnesty has the full support of the industry so it is surprising that such a small number of tenants seem to be taking advantage of the amnesty and we would urge all tenants to get involved before it is too late,’

More information about the amnesty can be found on www.landcommission.gov.scot/tenants-amnesty-campaign

Housing on tenanted farms to meet the Repairing Standard

Scotland’s Tenant Farming Commissioner (TFC), Bob McIntosh, is advising that the agricultural holdings sector needs to come together to agree a way forward to ensure agricultural housing is subject to the same standards as private rented housing.

Currently most housing on tenanted farms is subject to the tolerable standard – a house that falls below it is not acceptable as living accommodation – and it is widely accepted that this needs to be changed so that housing which forms part of an agricultural holding tenancy should be subject to the repairing standard.  This is the minimum standard for private rented housing which sets out criteria that the property must meet before being let out.

The Scottish Government intends to introduce a requirement for all farmhouses to meet the Repairing Standard by 2027.

Bob McIntosh explains:

“The Repairing Standard does not currently apply to farmhouses that are part of an agricultural tenancy.

“In most tenancy agreements the landlord has the responsibility for replacing and renewing parts of the farmhouse which are worn out through fair wear and tear and the tenant is responsible for repairing and maintaining the farmhouse. However this may be affected by post lease agreements which transfer responsibilities to the tenant. The result is a variable picture in the standard of housing, with some farmhouses having been improved by the landlord, some by the tenant, some by both and some hardly at all.

“The introduction of new legislation will put the onus for any work onto the landlord but it is not clear if this will take precedence over existing post lease agreements which transfer responsibilities to the tenant.

“My advice is that everyone involved in the agricultural holdings sector need to give this issue some serious thought and come together to agree a sensible way forward that respects the legislation and which is fair to both the landlord and the tenant.”

Tenants and landlords with a farmhouse which is treated as fixed equipment are to adhere to the TFC’s Code of Practice on The Maintenance of the Condition of Tenanted Agricultural Holdings.

If you would like to find out more about this read Bob’s latest blog.

Scottish Land Commission’s response to SLE’s concerns about SLDT’s

David Johnstone
Scottish Land and Estates
Stuart House
Eskmills
Musselburgh EH21 7PB

 

Dear David

Buccleuch and Fixed Term Tenancies

Thank you for your letter to Andrew of 19th October. The Board have discussed the issues you raise at their meeting on 23rd and have asked me to respond to you.

I can be clear that the Land Commission fully supports the continued use of fixed term tenancy agreements, including Short Limited Duration Tenancies and recognises the landowner’s legal right to take land in hand when a tenancy expires.

The Commission does though expect decisions, including end of tenancy arrangements, to be made in a fair and responsible way in line with Codes of Practice and the Land Rights and Responsibilities Statement.

Andrew made two comments in response to a specific question about the particular situation of the Telfers and the Buccleuch sale. The first was to express our view that it would be reasonable to enable the Telfers to remain in occupation until retirement age. The second was to question whether the engagement with local communities has been as effective as might reasonably be expected, particularly given the scale of change and the clear expectations set out in the Guidance on Engaging Communities in Decisions About Land. These comments reflect our advice conveyed previously to Buccleuch.

These comments were given in relation to the particular case in question and were not intended, and should not be interpreted, as implying any wider policy position about SLDTs.

I should also confirm that we have not questioned or criticised land use change on Buccleuch or elsewhere. In fact we recognise that land use change is going to be inherent in making more productive use of land and in moving to a more diverse pattern of ownership. This dynamic process of change emphasises all the more the need for effective community engagement and a responsible approach to ensuring the legitimate interests of all relevant parties are taken into account.

Bob is currently developing a Code of Practice on lease agreement and management which will set out what can reasonably be expected of both parties in a responsible approach to handling tenancy agreements. I hope that SL&E will be able to support this as with other Tenant Farming Commissioner Codes of Practice.

Commissioners would be happy to meet with you to explore the issues raised and I will be in touch shortly to suggest a number of dates that might be suitable.

 

Yours sincerely

Hamish Trench
Chief Executive

Buccleuch Estates

Andrew Thin, Chair of the Scottish Land Commission welcomes the announcement by Buccleuch Estates of the sale of a portfolio of land on the Borders Estate and its stated commitment to reduce its overall footprint. “Scotland’s Land Rights and Responsibilities Statement, published by the Government last year, sets out a clear principle that ‘there should be a more diverse pattern of land ownership and tenure, with more opportunities for citizens to own, lease and have access to land’.

 “The Land Commission sees this including a more diverse pattern of private ownership, as well as greater community ownership. We therefore welcome the review and decision by Buccleuch Estates to offer a portfolio of land on the open market as well as engage with community groups that have an interest in acquiring land. We encourage other large scale land owners to consider a similar review in relation to both business need and the wider principles of the Land Rights and Responsibilities Statement”.

Tenant Farming Commissioner publishes updated guidance on rent reviews

Scotland’s Tenant Farming Commissioner (TFC), Bob McIntosh, has today published updated guidance on negotiating and conducting rent reviews.

This updated guidance builds on the 2015 guide published jointly with NFUS, STFA and SLE which is aimed at ‘91 Act Tenancies.  The new guide clarifies some aspects of the processes currently used to review rent in particular those relating to the provision of evidence and the use of the inflation linked sense check.

Bob McIntosh said

“There is clear agreement that long periods between rent reviews can have a detrimental impact on  farm business. Parties are encouraged to meet when a rent review is due, even where there is no variation sought in rent payable.”

“Rent determination is not an exact science. Arriving at the rent sum is a process that requires agreement based on discussion and analysis of evidence provided by both sides. The updated guidance offers information on making and responding to rent proposals, including the need to provide evidence in the case of a rent proposal and any counter proposal made.”

The guide emphasises the importance of avoiding surprises and encourages a preliminary conversation on the holding in advance of the rent proposal. It also sets out clear guidance on the use of comparable rents in recent case law and emphasises the need for well researched data to be presented to inform any new rent proposal.

The Guide is available here.

Less than two years left under amnesty for agricultural tenants

Tenant farmers across Scotland have less than two years left to consider if they have improvements to notify their landlord about, under the waygo amnesty.

The amnesty, introduced by the Land Reform Act (Scotland) 2016, started last June and runs until 2020. The amnesty

  • allows tenants to rectify any outstanding issues around past improvements they’ve carried out, which should qualify for waygo despite missing notices or consents
  • does not apply where the landlord objected to the original improvement notice or the improvement was carried out in a manner significantly different from the original notice
  • may be essential when it comes to other aspects of the Land Reform (Scotland) Act 2016, particularly rent reviews and relinquishment of 1991 Act tenancies.

A Code of Practice, produced by the Tenant Farming Commissioner, Bob McIntosh together with bodies such as NFU Scotland, Scottish Tenant Farmers Association and Scottish Land & Estates explains how the amnesty works and how landlords and tenants work together in a fair and transparent manner to agree a definitive list of tenants improvements which may be eligible for compensation at waygo

Mr McIntosh said, “With only two years remaining of the amnesty, I urge all tenants to decide as soon as they can whether to use it – or not. It can take a bit of time to pull together all the evidence tenants may need to submit through an amnesty notice, so it’s best not to leave it too late.

“The amnesty is a one-off opportunity for tenants to ensure that past improvements are eligible for compensation at waygo.”

The definition of an improvement is broad and includes any buildings including houses and cottages. It also includes improvements to

  • land such as ditches, drainage, removal of stones and other obstacles to cultivation
  • field boundaries
  • access improvements

The amnesty notice must set out the details of the improvement and why it is fair and equitable for compensation to be payable at termination of the tenancy, even though the correct procedure may not have been followed at the time the improvement was made.

To aid tenant farmers and landlords with the amnesty process CAAV and SAAVA have developed model forms of a Tenancy Agreement and an example of how to list and describe items to include as a schedule in the Agreement.  The model forms can be found on the Land Commission’s website www.landcommission.gov.scot

A series of video’s have also been created by Rural Matters to help promote the campaign.

Tenant Farming Commissioner publishes Buccleuch Report

Scotland’s Tenant Farming Commissioner, Bob McIntosh, has today issued his report into the handling by Buccleuch Estates of negotiations with agricultural tenants over their farm leases.

The Tenant Farming Commissioner (TFC) was asked by Buccleuch Estates to look into concerns raised at a public meeting regarding a number of terminations of Limited Partnership arrangements and a Short Limited Duration tenancy.

The TFC reviewed five cases, looking at how the Estate had dealt with the cases and whether they were handled in accordance with good practice and relevant published codes and guides.

The TFC found that no actions by the Estate were in contravention of agricultural holdings legislation but that best practice was not always followed and that some of the discussions and negotiations could have been handled more sensitively by the Estate.

Bob McIntosh said:

“There are some valuable learning points from this exercise which have relevance for all landlords and tenants. The ending of non-secure tenancies has the potential to be a sensitive issue, particularly where past practices by the landlord may have led tenants, and general partners in an limited partnership, to feel that they have more security of tenure than is actually provided.

“When entering into such arrangements, and throughout the duration of the agreement, it is important that landlords and tenants are clear with each other about their expectations and aspirations for the future and that the outcome of these discussions is recorded so that unpleasant surprises for either party are avoided.

“It is also important, that where action by a land owner is likely to have major implications for land use, for communities and for the circumstances of individual tenants, the exercise is well planned with a good communications and engagement plan.

“Landowners must be able to pursue legitimate business interests but should heed the principles set out in such publications as the Scottish Government’s Land Rights and Responsibilities Statement, the Landowners’ Commitment published by Scottish Land and Estates and the Scottish Government’s ‘Guidance on Engaging Communities on Decisions Relating to land’.

“It will not always be possible to find outcomes that suit all stakeholders but consideration of the external impacts is likely to at least influence the process, and timing, by which change is brought about.

“The primary purpose of the Tenant Farming Commissioner is to promote good relations between landlords and tenants in the agricultural holdings sector.  This report highlights the importance of proactive engagement by landowners and land managers with tenants and communities when significant changes are planned.”

Read the full report here.

Finding ways for old hands to bring new blood into farming

New guidance from the Scottish Land Commission on joint ventures with new entrants to the agricultural sector aims to demonstrate the many options that are available in Scotland to support the sector in becoming more vibrant, resilient and productive.

The Commission is hosting a panel discussion at the Royal Highland Show to discuss a range of options to increase land availability for new entrants that are likely to increase the productivity and sustainability of the sector. It coincides with publication of A Guide to Joint Ventures with New Entrants which provides information on types of joint ventures including share farming, contracting, partnerships, tenancies and short-term leasing/licensing.

The Tenant Farming Commissioner, Dr Bob McIntosh said:

“We have worked with partners to provide a useful overview of alternative business models for existing farmers. They are options which might address a range of personal, financial and social motivations that demonstrate to farmers the opportunities of extending their business interests into a joint venture with a new entrant.

“They are not simply business opportunities but can also provide a pathway to the gradual planning for retirement or succession. We are encouraging anyone who is looking at their future business structure to pick up the guide, meet with myself or our partners or visit our stand.”

The panel discussion, chaired by Dr McIntosh, takes place on Friday June 22 at the James Hutton Institute stand, Avenue Q, between 12-1pm. The panel includes Jeremy Moody, Secretary and Adviser of the Central Association of Agricultural Valuers (CAAV); Sarah Allison, NFUS Next Generation Vice Chair; Alison Rickett, Fresh Start & James Hutton Institute and Tom Johnston, NFUS NE Tenant Farming working group.

The guidance is intended particularly for those who:

  • Are seeking to move towards retirement or scale-back their active farming operations.
  • Face barriers to succession planning or retirement due to financial or familial uncertainties.
  • Wish to retain their land asset but ensure that the land is used productively.
  • Wish to pass on their experience and support a new generation of farmers/land managers.
  • Are looking for new business opportunities or to engage someone with particular skills or knowledge.

The Scottish Land Commission also has its own stand at the Show on 4th Avenue. Chairman, Andrew Thin will attend the show on Thursday and Friday and the Tenant Farming Commissioner, Dr McIntosh will also be there on Friday.  Landlords or tenants who wish to speak to the TFC in private can book an appointment to meet with Dr McIntosh on Friday between 11am and 3pm.

Scottish Land Commission publishes James Hutton Institute new entrants report

Land access is a critical barrier for new entrants to agriculture in Scotland according to research published today.

The report, prepared for the Scottish Land Commission by The James Hutton Institute, suggests that existing farmers and landowners are well placed to offer greater opportunities to new entrants – and enhance their own businesses at the same time.

A priority area of work for the Land Commission is agricultural holdings and how to create and sustain a thriving agricultural sector in Scotland. The James Hutton Institute was commissioned to investigate new models and structures to increase the availability of land for new entrants; provide practical guidance on existing joint venture models; identify barriers to succession and retirement; and develop a baseline for measuring success.

The report by McKee et al. explores:

  • Current experience and understanding of joint venture options such as contract farming, partnerships, share farming, agricultural tenancies, and leasing/licensing
  • The potential for tax interventions, with a particular focus on income tax relief in relation to tenancy creation/length
  • English, Welsh, and Irish experience of land matching services
  • The development internationally of farm incubators for new businesses.

In particular the report highlights the need to address issues around the balance of risk and reward on the part of existing farmers/landowners when implementing these models, the profitability of new entrant farming businesses, and the need for trust and relationship building in developing joint ventures.

Speaking about the report, Tenant Farming Commissioner (TFC), Bob McIntosh, said

“One of the biggest issues facing new entrants to tenant farming is the lack of access to land. For Scotland to have a successful farming sector there needs to be new entrants to drive innovation and best practice.

“This report explores a number of ways for increasing the availability of land. Working with NFUS and Scotland’s Farm Advisory Service, we will be holding a series of workshops in late summer, looking at the options available to existing farmers and landowners, such as joint ventures and share farming, to offer opportunities for new entrants.”

Further information on the dates for the joint workshops, will be published on the Scottish Land Commission’s website.

To download a copy of the James Hutton Institute report (Increasing the Availability of Farmland for New Entrants to Agriculture in Scotland), click here.

Review makes recommendations to improve relationships between land agents, tenants and landlords

In a report to Scottish Ministers about the conduct of agents of agricultural landlords and tenants, Scotland’s Tenant Farming Commissioner (TFC), Bob McIntosh, has made several recommendations aimed at reducing the number of occasions when landlords and tenants are dissatisfied with the conduct of an agent working for them or for the other party.

The report was a requirement arising from the Land Reform (Scotland) Act 2016 and reflected concern that inexperienced or insensitive agents may be adversely affecting the relationships between landlords and their tenants. The work involved independent surveys of landlords and tenants throughout Scotland with the aim of determining the overall level of satisfaction with the conduct of agents. Instances of dissatisfaction were followed up in more detail and the results of the surveys were shared with the key organisations representing landlords, tenants and agents to help form the recommendations.

Landlords and tenants were generally satisfied by the conduct of agents working on their behalf but less so with that of agents acting on behalf of the other party. Overall, 17 per cent of both landlords and tenants were dissatisfied with the conduct of an agent and dissatisfaction was generally linked to behaviour rather than to any lack of technical or legal knowledge on the part of the agent. The key reasons for dissatisfaction were:

  • Poor communication and inadequate recording of the outcome of meetings
  • Unnecessarily aggressive or condescending behaviour
  • Lack of transparency openness and honesty
  • Lack of awareness of the impact of a single transaction on the long term relationship between landlord and tenant.

The TFC has made nine recommendations for action with most of them relating to the need to improve interpersonal skills through more training, assessment and feedback mechanisms. He has also recommended that the professional bodies representing the majority of agents should increase awareness of, and ease of access to, their complaints procedures and should consider whether their published standards strike the right balance between the duty to a client and a duty to wider professional standards and societal values.

Bob McIntosh said

“It is clear that most agents perform their duties in a professional manner but the actions of a small minority can have a disproportionate effect on the reputation of the agent, their employers or their profession. It is important therefore that everyone involved from training establishments, employers, the professional bodies and the agents themselves, consider the recommendations carefully and take action to ensure that there is continuous improvement leading to a reduction in the instances of dissatisfaction’’

Fergus Ewing, Cabinet Secretary for the Rural Economy and Connectivity said:

“I am grateful to the Tenant Farming Commissioner for completing this important piece of work and am heartened that he has found both that relationships between tenants and landlords are generally good and that problems with the conduct of agents are not widespread. However, I recognise, as he does, that some problems do exist and there is no room for complacency. I welcome the recommendations, and I look forward to seeing how they are taken forward by the sector.”

Read the full report here.