Small landholdings modernisation: consultation analysis

3. Consultation findings: Assignation and succession

This section of the report outlines the consultation findings in relation to the third set of questions on Assignation and succession.

The Scottish Government proposes:

To amend the legislation for small landholdings and update the assignation and succession provisions, so a small landholder can assign to the same classes of people as tenant farmers with secure 1991 Act agricultural tenancies in the Land Reform (Scotland) Act 2016.

We consider that the landlord should be able to object to the person identified to be assigned or succeed the small landholding for the following reasons:

a) if the person is not of good character;

b) does not have sufficient resources to enable them to farm the small landholding with reasonable efficiency; or

c) the person has insufficient training in agriculture or insufficient experience, unless the person is undertaking a suitable training course.

Key findings: Over half of respondents (54%) agreed that the legislation setting out who can be assigned or succeed a small landholding should be updated to have similar succession and assignation rights as tenant farmers with secure 1991 Act tenancies. Almost a quarter (24%) disagreed.

Almost half (41%) of respondents agreed that a landlord should be able to object to the person the small landholder wishes to be assigned the small landholding or to succeed it. Just under a third (29%) of respondents disagreed.

This section of the report outlines the consultation findings in relation to the third set of questions on Assignation and succession, which focused on:

• Views on succession and assignation rights;
• Landlords’ rights to object to the person the small landholder wishes to be assigned the small landholding or to succeed it.

The results are set out separately for each question.

3.K Succession and assignation rights

Over half of respondents (54%) agreed that the legislation setting out who can be assigned or succeed a small landholding should be updated to have similar succession and assignation rights as tenant farmers with secure 1991 Act tenancies. Almost a quarter (24%) disagreed and 7% answered 'neither'.

Key findings

Over half of respondents (54%) agreed that the legislation setting out who can be assigned or succeed a small landholding should be updated to have similar succession and assignation rights as tenant farmers with secure 1991 Act tenancies. Almost a quarter (24%) disagreed.

A number of respondents agreed there was a need for alignment with secure 1991 Act tenancies in this area. However, others felt that this should instead be done in line with crofting regulations on assignation and succession. Several respondents highlighted the need for consistency across all types of agricultural tenancies, to reduce confusion.

Respondents were asked to give reasons for their answer, and a total of 24 did so.

A number of respondents agreed there was a need for alignment with secure 1991 Act tenancies in this area. They gave a number of reasons, including the need for consistency and parity with tenant farmers, and the appropriateness of this in line with the extension of categories of qualifying people for the 1991 Act sector under the Land Reform (Scotland) Act 2016. Further reasons given were:

• Small landholders are best placed to identify a successor in the interests of the landholding, from a family member to a suitably qualified new entrant;
• Current succession rights are too restrictive and can lead to the loss of the landholding when the tenant has no immediate successor;
• This approach may prevent profiteering.

One organisation stated that it is important to recognise other ways in which tenancies can change hands, such as the Scottish Land Matching service, in order to ensure that land remains in the tenanted sector and to bring new entrants into farming. Appropriate provisions should be made to ensure that small landholdings remain productive components of the rural economy.

However, a number of respondents disagreed that the legislation setting out who can be assigned or succeed a small landholding should be updated to align with secure 1991 Act tenancies. One set of respondents felt instead that this should be done in line with crofting regulations on assignation and succession. One key reason given was that crofts are more comparable in size to small landholdings than tenant farms. One organisation stated that small landholdings should be brought into the crofting framework, and that this would be a more practical approach than introducing aspects of 1991 Act tenancies into small landholding legislation. Another organisation stated that alignment with 1991 Act tenancies would result in small landholders having different rights to crofters.

Several respondents highlighted the need for consistency across all types of agricultural tenancies, to reduce confusion. Further views included:

• The current legislation is suitable;
• Assignation and succession should be similar to 1991 Act tenancies and apply to any family relatives;
• Small landholdings should not be directly passed on but open to any applicant;
• Given the smaller scale of small landholdings, the level of training and knowledge required of the person identified as a successor should be lower than that required for an agricultural tenancy.

One organisation stated that assignation and succession of agricultural holdings is a contentious area, and did not wish to comment further as it was not clear from the consultation if assignation for value (as found within agricultural holdings law) was a consideration in this context.

3.L Right of landlord to object to the person the small landholder wishes to be assigned the small landholding or to succeed it

Almost half (41%) of respondents agreed that a landlord should be able to object to the person the small landholder wishes to be assigned the small landholding or to succeed it. Just under a third (29%) of respondents disagreed, 12% said 'Neither' and 17% of respondents did not answer the question.^[5]

If so what should those objection grounds be?

Key findings

Almost half (41%) of respondents agreed that a landlord should be able to object to the person the small landholder wishes to be assigned the small landholding or to succeed it. Just under a third (29%) of respondents disagreed.

In terms of objection grounds, several respondents stated that those already in place are sufficient. Others felt landlords should consider: character and working relationship; interest in agriculture, and a suitable level of competency, knowledge and qualifications; financial capability and sufficient resources.

Several respondents stated that the grounds for the landlord’s objection should be in line with 1991 Act tenancies, whilst others felt this should instead be done in line with crofting regulations.

Respondents on both sides felt that there should be provisions in place to prevent discrimination against specific groups (for example, in use of the criteria that the successor is of 'good character'). Several felt there was scope for different interpretations of the criteria and misuse of grounds for objection.

A total of 31 responses were received to this question. Of those respondents who agreed, several raised the need for fairness, proportionality and a balanced approach. Several stated that the landlord should have sufficient reasons to object, or should only be able to do so in a limited number of circumstances, for example: if they could demonstrate that the identified successor would harm the future viability of the holding, or if the identified successor has a serious criminal record. Others felt that not allowing the landlord to object would be a breach of their rights.

In terms of the objection grounds, several respondents stated that those already in place are sufficient. Other gave suggestions relating to:

• Character, for example to enable a working relationship between the incoming successor and landlord;
• A relevant interest in agriculture;
• A suitable level of competency, knowledge and qualifications, to be able to farm the land to an appropriate standard;
• The person’s ability to maintain the landholding;
• As long as they farm it in guidance with current legislation;
• Financial capability and sufficient resources.

One organisation recommended the inclusion of an additional criterion that the successor will actively live and work on the small holding to ensure the land is productively used. They stated that the aim should be to promote, support and simplify assignation and succession, to encourage rural development.

Several respondents stated that the grounds for the landlord’s objection should be in line with 1991 Act tenancies. One organisation suggested that a higher standard should be set across both in terms of the proposed successor's competency, in order to ensure more efficiency and productivity within Scottish agriculture, and meet the challenges of environmental impact and land management.

Of those who disagreed or selected 'Neither', several respondents felt this should instead be done in line with crofting regulations. Others felt that small landholders were best placed to make decisions about the future of the holding, with one pointing out that the title conditions restricting use would also apply to the successor. One individual commented that objections should be limited to character and access to resources.

Respondents on both sides felt that there should be provisions in place to prevent discrimination against specific groups (for example, in use of the criteria that the successor is of 'good character'). Several felt there was scope for different interpretations of the criteria and misuse of grounds for objection.

Respondents felt that further guidance is needed, including to define criteria such as ‘good character’, outline expectations and any evidence required.

Attendees at the public consultation event stated that new entrants should be added to the list of eligible assignees.

Lastly, a number of respondents highlighted the need for an appeal mechanism against decisions, or referral to an umbrella body for mediation and resolution.