Keeping tenant farming on track

Some argue that the steadily declining number of agricultural tenancies in Scotland are a direct result of competing rights between tenants and landlords.

On his website, the Tenant Farming Commissioner confirms his responsibility for promoting and encouraging good relations between agricultural landlords and tenants in Scotland, publishing guidance and Codes of Practice of which he has the power to investigate alleged breaches. It seems the Westminster Government now recognises the contribution of the Scottish Commissioner and is seriously considering appointing England’s own.

With the backdrop of a continuing and steadily declining number of agricultural tenancies in Scotland, the Agricultural Holdings Legislation Review Group was set up by Scottish Government in 2014. Its remit was to identify issues requiring remediation to address the lack of supply and the consequent deleterious effect on an important part of the Scottish economy. The group consisted of landlord and tenant representatives with legal members and it received submissions to their call for evidence from across the sector. Its final report was published in January 2015 and many of the recommendations were taken up in the Scottish Government’s latest legislation in the area, Part 10 of the Land Reform (Scotland) Act 2016.

Relationships in the spotlight

One of the major issues of ongoing concern identified by the Review Group was that of landlord and tenant relationships. Its report noted a “successful tenant farming sector has to be rooted in strong and constructive relationships between tenants and landlords”. It also noted the number of submissions describing “dysfunctional relationships… with neither side taking any constructive action to address the issue… and… several cases of little or no interpersonal interaction”. A number of submissions related to the behaviour of factors and, in some situations, their alleged role in souring relations between parties.

As a practitioner, I am well aware of the issues. I have tenant clients who know their rights but don’t want to cause a fuss or rock the boat, in a strange relic of a bygone age in which the tenant doffs his cap to the Laird. I have landlord clients who think that their tenant has no right to discover, never mind assert, their rights. Tenant clients who report their landlord appears at the house late at night and with no warning demanding a rent increase; landlord clients who say their tenant avoids any attempt to meet and who obtusely sticks to a position where some negotiation might assist dealing with the practical running of the farm.

The Review Group suggested radical action was required, including a reassessment of the role of factors. Its report recommended the creation of a Tenant Farming Commissioner as a “neutral ombudsman” who could establish formal Codes of Practice to promote good landlord/tenant relationships and good practice, discourage poor behaviour and resolve disputes. The group identified a few key areas requiring immediate attention through the vehicle of the new Codes, including rent review, tenant improvements and the use, role and behaviours of factors.

Establishing guidance

The Tenant Farming Commissioner has been Bob McIntosh from first appointment in 2017 and the Codes of Practice published on his website currently cover rent review; maintenance of farm buildings and equipment; late payment of rent; agreeing and managing leases; and sporting rights. A Code of Practice addressed to factors and other professional intermediaries is also available, encouraging a professional approach and fairness. Each Code has a similar format and provides a summary of what is required by law in a particular circumstance, as well as a simple guide to recommended procedures for both landlord and tenant. Those procedures usually include face-to-face meetings, openness, clear communication and suggested reasonable timescales to follow. 

The Review Group recommended the Commissioner should be able to impose sanctions for a breach of the Codes but this was not taken up by the Scottish Government and did not find its way into the 2016 Act. However, as a practitioner I have taken advantage of the Commissioner’s investigative powers and contacted his office on occasions when a client has reported their landlord or tenant counterpart’s apparent intransigence is making matters difficult to resolve in a certain situation. His office’s gentle interventions in such situations have been greatly appreciated. 

Positive impact

The Commissioner has an ongoing monitoring role and is no doubt fully aware of common issues that need resolution and examples of poor practice. I have always found the Codes to be written clearly and a common sense statement of desirable behaviour for clients, be it landlord or tenant. This is also true for the solicitor and other agents who should see themselves similarly bound. I have pointed out to many clients that they do not want to run the risk of breaching a Code and having their details made public.

The proposal for a Tenant Farming Commissioner in England and published Codes was one of the many recommendations made in the 2022 Rock Review of the agricultural tenanted sector there. Defra is currently seeking evidence from across the sector.

Reporting on the Rock Review in September 2023, the English Farmers Weekly commented that Bob McIntosh’s “approach and achievements have been roundly welcomed by both landlord and tenant organisations”. The Scottish Tenant Farmers Association pointed to his role as “improving landlord and tenant relationships” with the publication of the Codes of Practice. Landowner body Scottish Land & Estates stated his appointment was “very constructive in facilitating sensible discussions. Bob is hugely respected by everyone – and rather than favouring any side, he has worked diligently for the overall good of the sector”.

Resolving disputes

If landlords and tenants could all start from the beginning and deal with every interaction in accordance with the relevant Code, the world of agricultural leasing in Scotland surely would be a better place. However, in this sector, a large proportion of ongoing leases came into existence many years ago, and deep-seated arguments and resentments have built up between generations of landlord and tenant families.

In fundamental ways, the Codes cannot deal with such entrenched positions and the Commissioner’s additional service of providing assistance in resolving disputes through mediation is all the more invaluable. The Mediation Scheme was set up in 2021 with an approved panel of mediators and offers a financial contribution towards the cost of the process. Avoiding court action and its likely acrimony can only be helpful and so if the relevant Code comes too late to deal with built-up grievances, specially tailored mediation does seem to offer a very useful alternative for resolving what can be personal and deeply entrenched disputes that can only harm the agricultural sector.

Written by Catherine Bury