Small landholdings legislation: guide to the law in Scotland

A Simplified Guide

1. What is a Small Landholding?

Legally, Small Landholdings and Statutory Small Tenancies ( SST) are tenanted holdings, subject to the Small Landholders (Scotland) Acts 1886 to 1931 (“the Landholders Act”), that only exist in Scotland outwith the Crofting Counties.

Following consultation by the Scottish Government, it is understood that no tenant claims to hold a SST. However, if you believe you have a SST, please refer to this section and this section of the guide.

2. What law governs Small Landholdings and SST?

The relevant Acts of Parliament are collectively known as the Small Landholders (Scotland) Acts 1886 to 1931 ^[2] and include those listed here.

Case law relevant to Small Landholdings and SSTs is available in the law reports that can also be found here.

3. How and when did Small Landholdings come about?

Crofting was introduced to the Crofting Counties by the Crofters Holdings (Scotland) Act 1886, which secured three key rights for crofters:

• security of tenure provided the crofter observed the statutory conditions;
• a fair rent; and
• payment of compensation for improvements at the end of a tenancy.

A crofter was defined as a tenant of a holding, who resided on the holding, situated within a crofting parish, where the annual rent was no more than £30/acre (£74/ha).

Under the Small Landholders (Scotland) Act 1911, crofting, now called landholding, was then extended to the whole of Scotland. It created two types of new tenancies:

• Small landholding, which included crofts created under the 1886 Act; and
• Statutory Small Tenancy ( SST).

To qualify as either, the tenant had to be a crofter under the 1886 Act, or a tenant from year to year living within 2 miles of the holding and who cultivated the holding or who qualified when a lease for a longer term than a year started to run on the same conditions. ^[3] An exclusion under the Act was any holding where rent exceeded £50/acre (£124/ha) unless the area was less than 50 acres. ^[4] The rate for Lewis is £30/acre (£74/ha).

After the First World War, the Land Settlement (Scotland) Act 1919, was created to assist suitable people, primarily ex-servicemen, to secure land. The Board of Agriculture compulsorily created a substantial number of small holdings throughout Scotland. In the 1970’s, most of this land, where the Secretary of State for Scotland was the landlord, was sold to the sitting tenants, meaning these holdings were then no longer governed by the Landholders Acts.

The Landholders Acts now only apply to holdings outwith the Crofting Counties.

4. Knowing if you’re a landholder under the Landholders Acts

You can only be a landholder in Scotland if:

• The land lies outwith the Crofting Counties;
• The holding was created as a landholding on 1 April 1912 under the 1911 Act;
• It was created after the above date by agreement with the landlord, registered in the Scottish Land Court, or under a scheme (1911 or 1919 Acts) promoted by the Board of Agriculture and approved by the Land Court.

A holding, outwith the Crofting Counties, became a landholding where it was held from year to year by a tenant who lived within 2 miles of the holding. The tenant also had to cultivate the holding with or without their family or hired labour. Finally, the tenant, or predecessors within the same family, had to have provided or paid for the greater part of the buildings or permanent improvements without receiving payment or fair consideration from the landlord. Where there was a lease for a longer period of time, that would otherwise have qualified, then on the termination of that lease it became a small landholding.

If you are unsure whether you are a landholder under the Landholders Act, you can check with the Land Court to see if they hold a record of your holding. If they don’t, it doesn’t necessarily mean that it isn’t a landholding.

If the landholder accepted a new lease, then it could cease to be held under the Act. ^[5] The purchase of a landholding by the sitting tenant removes it from the Act. ^[6]

Further information can be found on pages 16 and 17 of the Guide.

5. What are the terms of the lease of your landholdings?

There will be a written lease when:

• Landholdings have been created by the Board of Agriculture; and
• Written terms of the lease have been approved by the Land Court.

Statutory conditions of tenure, supersede any other conditions in a lease the parties may have entered into, when the subjects became landholdings in 1912 or later, unless created under a Board of Agriculture scheme.

New holdings created under the 1919 Act are subject to both the statutory conditions and the terms and conditions imposed by the Board – if they are not inconsistent with the Landholders Acts. ^[7]

Any contract or agreement made by a landholder, whether before or after 1931, which deprives them of any right granted to them by any provision of the Landholders Acts is void – unless the contract or agreement is approved by the Land Court. ^[8]

Further information can be found on this section and this section of the Guide.

6. What rent must you pay and how can you get it reviewed?

The landholder has to pay a “fair rent”. There are 2 ways that this can be decided:

• by the landlord and landholder agreeing a rent, payable as long as the agreement remains in force or until a new rent is fixed by agreement; ^[9] or
• the landlord or landholder can ask the Land Court to fix a “fair rent”, payable from Whitsunday or Martinmas and not altered for 7 years (apart from by written, mutual agreement).

To fix a “fair rent”, the Land Court must consider the circumstances of the case, holding and district, and take into consideration any permanent or unexhausted improvements on the holding carried out or paid for by the landholder or predecessors in the same family”. ^[10] Things taken into account are:

• The land including its stocking and cropping capacity and whether the landholding is suitable for a subsidiary or auxiliary occupation or the sub-letting of any dwellings;
• The value of any applicable pertinents of the landholding, such as the right to take sea ware or peat;
• The rise or fall in the value of money (particularly inflation);
• The net annual profits taking account of subsidies.

The fixing of a “fair rent” does not depend on:

• The landholder’s ability to pay;
• The availability of opportunities for ancillary employment;
• Opportunities for employment in the area.

A landholder cannot credit themselves with an agricultural worker’s standard wage, nor are they entitled to a deduction in rent for any dilapidations they have allowed.

7. What are the lease’s statutory conditions you must comply with?

These are set out in section 10(1) of the 1911 Act and section 1 of the 1886 Act as follows. The landholder shall:

• cultivate the holding or make use of it for subsidiary or auxiliary occupations that in case of dispute, the Land Court may find to be reasonable and not inconsistent with the cultivation of the holding;
• pay the rent by the terms of which it is due;
• not execute any deed appearing to transfer the tenancy;
• not persistently allow dilapidation of buildings or deterioration of the soil;
• not without the landlord’s consent, sublet any of the holding or allow a house to be erected;
• not do anything to become bankrupt, nor execute a trust deed for creditors;
• not persistently breach any written conditions protecting the landlord’s interest (or neighbouring landholders), which the Land Court deem reasonable.

The landlord, or persons authorised by them, has the right to enter the holding for purposes authorised by the Acts.

8. Can you use your landholding for anything other than agriculture?

Section 11 of the 1911 Act allows you to utilize the landholding for other occupations the Land Court would find reasonable as long as it is not inconsistent with the holding’s cultivation.

Examples are: holiday accommodation operator (dwelling houses and caravans), craft workshop, acting as a farrier, joiner, builder, fisherman, shopkeeper or artist.

9. How can your lease of the holding be terminated?

The tenancy can be terminated by:

• The landholder purchasing the holding as this would take the holding outwith the Landholders Acts;
• The landholder accepting a new lease outwith the protection of the Act;
• The landholder renouncing the tenancy. This can usually be done with 1 year’s written notice to any Whitsun or Martinmas date unless the tenant was a new landholder after 1931. If so, the lease can only be terminated at the same term date that entry was taken;
• Removal of the landholder by order of Land Court. This can happen if the tenant is in breach of one of the statutory conditions: one year’s rent is unpaid; the holding is abandoned; they break any condition of repayment of a loan to the Scottish Ministers; or
• The Land Court authorises a resumption of all or part of the whole holding.

10. What compensation can you get when all or part of the tenancy is ended?

In order to apply for compensation, the landholder must renounce their tenancy or be removed. Any landholder who abandons the tenancy or serves an invalid notice of ending it is not entitled to compensation.

The Land Court then has to assess if the permanent improvements which have been made are suitable for the holding. The improvement has to have been carried out or paid for by the landholder or their family predecessors. Improvements carried out in previous tenancies or by sub-tenants do not qualify.

In these circumstances, an improvement is the provision of something new; not the replacement of an existing structure. They are valued on the basis of their value to an incoming tenant. The value of any assistance or consideration given by the landlord is then deducted as is the value of any deterioration (committed or permitted by the tenant in the 4 years before the tenancy ends). Any rent arrears may be off-set against any compensation found due.

11. What can the landlord do on your holding?

The landlord has a number of reserved rights under section 1(7) of the 1886 Act to enter the holding for the purposes set out in the section. This includes the obligation of the landlord to pay reasonable compensation for any damage caused.

The landlord’s reserved rights are:

• Searching for, taking, digging for, or mining minerals;
• Quarrying or taking stone, marble, gravel, sand, clay, etc.

The above can be done commercially, i.e. not only for extraction for estate purposes.

• The cutting or taking of timber – unless planted by the tenant or family predecessor or used for shelter;
• Cutting of peat for estate purposes;
• Opening or making roads, fences, drains and water courses. Where a road is opened up, it may be used by the landlord or anyone authorised by them, including other estate tenants; ^[11]
• Access to and from the shore of the sea or any loch, with or without vehicles;
• This includes others authorised by the landlord for all purposes;
• Hunting – including vermin control, shooting or fishing;
• Any damage caused is subject to the landholder’s rights to compensation;
• A landlord may for any estate purpose, use any water source rising on the holding
  and not required for the use of the landholding.

12. Who can succeed you in your tenancy?

The landholding can be left to anyone who is related to the landholder, in a way that allows them to succeed if there is no will. There is an allowance for a more remote relative to inherit if others have already died. A landholder is strongly advised to
leave the tenancy in their will to their chosen successor to avoid complications.

The landlord (or their agent) must be made aware in writing of the bequest within
2 months of the landholder’s death. If the landlord objects, the case would go to the
Land Court where it would either be upheld or the new landholder declared tenant.

If there is no bequest, within 1 year of the landholder’s death, the executors may transfer the lease to one of the people entitled to succeed the tenancy.

If a landholder is unable to work, they can apply to the Land Court to assign their holding to anyone entitled to succeed their landholding.

13. Can you convert your landholding (or SST) to a croft?

Section 3A of the Crofters (Scotland) Act 1993 allows the owner of any area of land, but particularly a landholder or SST tenant (subject to some exceptions*) to apply to convert their landholding into a croft – but only if it is in a geographic area designated by the Scottish Ministers.

An application is made to the Crofting Commission after a certificate is obtained from the Land Court that the holding is either a landholding or a SST and the conditions in subsection 3A(12) are met. Compensation will have to be paid from the tenant to the landlord for the conversion.

*The exceptions are that the area of land must be within the crofting counties, no part of the land is tenanted in other ways and it must be a landholding or SST.

Note that the requirement in Section 3A(12)(c) whereby fixed equipment necessary for the landholder to cultivate the crop isn’t provided by the landlord, probably can’t be met by a SST tenant as the fixed equipment is provided by the landlord.

Further information on applying to convert to a croft is on this section and this section of the Guide.

14. Common Grazings

A landholding could have shares in a Common Grazing. However it is unlikely there are any remaining for landholdings now outwith the crofting counties. The common graziers may exercise their rights, under the Ground Game Act 1880, to kill and take ground game on the Common Grazings. ^[12]