The Courier & Advertiser (Perth and Perthshire Edition)
New tenancy option gets backing from STFA
MLDT has minimum term of 10 years as market begins to show movement
A new style of tenant farming lease came into force yesterday alongside predictions that landowners may become more enthusiastic about letting land once the economic consequences of Brexit start to bite.
The new Modern Limited Duration Tenancy (MLDT), which was created by last year’s Land Reform Act, has a minimum term of 10 years duration and replaces the Limited Duration Tenancy (LDT) option, which has been available since 2003.
The new letting arrangement was welcomed by the Scottish Tenant Farmers Association (STFA).
Chairman Christopher Nicholson said he hoped that MLDTs would soon become the norm and disclosed that some new leases were already on the point of being signed.
He added: “Given post-Brexit economic prospects, landlords may soon overcome their current reluctance to let land and be glad of MLDTs as providing a secure letting arrangement to ensure their land is looked after by a competent farming tenant.”
NFU Scotland also said it had taken a number of calls from members who were looking at their choices.
The union’s policy manager, Gemma Cooper, added that there seemed to be movement in the letting market following a period of inertia after the passing of the 2016 Act.
MLDTs are very similar to LDTs although an important innovation is a five-year break clause for new entrants
A landlord will be entitled to bring the tenancy to an end after the first five years if a tenant is not farming in accordance with the rules of good husbandry or has not complied with provisions of the lease.
There is also more freedom to agree fixed equipment provided by the landlord and, as in LDTs, virtual freedom of contract to agree rent review provisions, although tenants must be allowed to initiate a rent review and upwards-only rent reviews are prohibited.
MLDTs are subject to the same succession provisions as 1991 Act tenancies.
Existing LDTs will continue unaffected until their term date, and tenants and landlords who are looking for a let of less than 10 years will be able to continue using the Short-Limited Duration Tenancy (SLDT) option.