New guide available for tenant farmers thinking of retiring

ADVICE: Helpful resource which sets out future options welcomed by STFA

Scottish tenant farmers who are thinking of retiring or assigning secure tenancies will be able to access important advice from a new guide which has been published by the tenant farming commissioner, Bob McIntosh.

The guidance recognises the value of a tenant’s interest in his lease, and explains where a tenant chooses to stop farming, compensation from his landlord should be based on the value of the tenancy.

In cases where the landlord does not wish to pay compensation to the tenant, the tenant can assign the lease for value to a new entrant or progressing farmer, thereby allowing new blood into secure tenancies.

The publication has been welcomed by the Scottish Tenant Farmers Association (STFA) which said the guidance supports what is already taking place in many cases.

Retiring tenants who have no family successors receive valuations for their interest in the tenancy they are giving up, or they can assign their leases for value to new entrants or progressing farmers.

STFA says it hopes to see an increase in this practice in the future to allow those coming out of limited duration starter farm leases to find secure tenancy opportunities as the next step in the farming ladder. The association’s chairman, Christopher Nicholson, said while the legislation permitting this process is contained in the Land Reform Act 2016, it is not likely to commence until next year.

However, he added the guidance would encourage tenants without successors and approaching retirement to think about future options.

“We know of situations where young developing tenants have been negotiating with tenants looking to retire, and in the future the process may allow share farming opportunities to permit the incoming tenant build up capital over time while the retiring tenant is winding down,” he said.

“There are still some details in the relinquishing and assignation provisions of the 2016 Act to be finalised in secondary legislation including the method to value a tenancy, but we expect that in practice landlords and tenants will work out agreements suitable to all parties without following the exact legal process, but recognising the principles set out in the legislation.”

The guide can be found on the Land Commission’s website www.landcommission.gov.scot/tenant-farming/ reviews-and-reports.

The new guidance for tenant farmers who are thinking of retiring or assigning secure tenancies has been published by the tenant farming commissioner, Bob McIntosh.