Tenants’ improvements list ‘needs major update’
The current list of tenants’ improvements which qualify for compensation is out of date and requires a major update to make it relevant to current farming businesses, according to one of the leading professional bodies involved in the reform of the agricultural holdings legislation.
The Scottish Agricultural Arbiters Valuers Association (SAAVA) said that the recently launched three-year amnesty which allowed tenants to inform their landlords of improvements which had been carried out without the necessary notification had highlighted some of the major omissions to the current list – known as Schedule 5.
Calling for this to be updated quickly for the “benefit of both landowners and farm tenants” in Scotland, the organisation’s president, Rob Forrest,, said that the current criteria was based on the 1948 holdings Act – and although this provided a good base for negotiations, some significant modern improvements did not feature on the Schedule 5 list.
He said that examples of items not eligible for compensation included buildings such as slurry stores, which were often an integral part of many modern livestock units.
“An incoming tenant would not be able to continue that type of farming without such a key item,” said Forrest.
“The current amnesty which gives opportunity to establish clarity as to what is compensatable has been, and will be, a very positive development for landlord and tenant relations over the next three years,” he said.
“However, what has become apparent are ‘omissions’ in the list of improvements that qualify – and while it is unlikley that any additions will figure in the current amnesty, the changes going through with the 2016 land reform act offer us a good opportunity to update the list.”
He said some items could have involved significant investment from the tenant and it was vital that they are able to establish the compensation terms of any improvements made.
“This is why SAAVA want to ensure that the list is well debated and any required additions to the current Schedule 5 are made.”
He said that other sectors of the industry had been supportive of such a move – adding that now was the time for discussion on what should be added to take place: “While many farms will have renewables these are likely to be listed as tenant’s fixtures at the moment – but increasingly these and other forms of diversification will be viewed as an integral part of a farm business.”