STFA finds ‘increasingly strong desire’ for reform

THIS SEEMS to be the season for surveys.

Yesterday the Scottish Tenant Farmers Association released the controversial results of its most recent members’ survey, just as NFU Scotland called on those who rent out land to respond to a separate questionnaire (see panel).

The flurry of activity is all linked to Richard Lochhead’s Agricultural Holdings Legislation Review Group (AHLRG).

The minister’s is chairing the group himself and, if the STFA response is anything to go by, his panel will have plenty of views to consider.

Essentially the STFA has concluded there is an “increasingly strong desire among tenants to see land and tenancy reform in Scotland”.

Given that the STFA is a single-interest lobby group, that might not be surprising. But, even so, there is a notable 58% support for absolute right to buy (ARTB) for 1991 Act tenants, a measure regarded by most as being very radical.

There was a further 26% support for a conditional right to buy for tenants.

There is no clear guide as to what the conditions might be.

STFA suggests that ARTB would only apply if the move was seen as being “in the clear public interest.”

It is unclear as to who might determine where the public interest lay, but 89% of the 541 respondents agreed that a lands commission should be set up to act as an ombudsman for a range of tenancy issues including ARTB and the thorny issue of assignation of leases.

After meeting the AHLRG to present the survey results, STFA chairman Christopher Nicholson said: “It is clear that the current tenancy legislation is failing to provide a platform which can support the high levels of investment in infrastructure required for businesses to remain competitive in modern agriculture.

“The survey shows that 46% of tenant respondents have had no landlord investment in the last 10 years, and 85% believe that, as tenants, they will not receive fair compensation for their improvements at way-go.

“These results point to an unhealthy state of affairs in the tenanted sector which require solutions beyond tinkering with the existing legislation.

“An analysis of the survey results shows that landlord investment is the key factor that creates healthy tenancies.

“The 13% of respondents with landlords willing to make investments when necessary have attitudes, experiences and relationships which set them apart from the remaining 87%.

“They are four times more likely to have a good relationship with their landlord, twice as likely to have diversified, and three times more likely not to have had a diversification project objected to by their landlord.”

STFA has also proposed that secure tenancies become freely assignable, which the organisation believes would put tenants on a more level playing field with owneroccupiers with regard to ability to invest in their holdings, as well as providing access to holdings with secure tenure for new entrants.

“With an assignable lease the value of the tenant’s improvements would be reflected in the value of the lease which, if freely assignable, could be used as a standard security with a bank.

“This would vastly improve a tenant’s ability to borrow, and for the first time allow a tenant to benefit fully from the value of his improvements.

“Furthermore, instead of relying on compensation for improvements from a reluctant landlord at way-go, the tenant would have the option to assign their leases for value to a third party,” said Mr Nicholson

The survey results also support replacement of the open-market rent test with one which is based on the earnings potential of the farm, with an overwhelming 95% of respondents in favour.

Widening family succession and assignation to all family members was also popular.

Mr Nicholson said: “In the event of the Scottish Government introducing ARTB it is highly likely that not all tenants will buy their farms and there will be a continuing need for a tenanted sector, and so it is vital that we identify and remedy current shortcomings.

“Past efforts at tenancy reform have merely tinkered around the edges, and the time is now ripe for some root-and-branch change.

“The review group have a wideranging remit, backed up by an ambitious programme of evidence gathering.

“We expect that this review will lead to the most far-reaching reform of tenancy legislation since 1949 and it is imperative that we get it right.”

Christopher Nicholson.