Chamber and committees

My amendments 297 and 301 reverse a language change made by the bill. I recognise that concerns were raised about replacing the word “similar” with the word “comparable”. That change was supported by tenant farming stakeholders and was recommended by the Agricultural Law Association.

My amendments 298 and 302 amend the bill provisions to list the matters that should not be taken into account by the Land Court when fixing the rent for a holding. Again, stakeholders have asked for that, as they consider that the equivalent provision in section 13 of the 1991 act, as now in force, is well understood by the sector.

My amendments 299 and 303 amend the 1991 act and the 2003 act by listing elements that the Land Court must have regard to when determining a fair rent for a holding. The amendments make specific provision about the improvements that must be taken into account as part of a rent review and matters to be taken into account when rental value is reduced. Those changes are supported by stakeholders, who consider that they are necessary elements that will enable the court to determine a fair rent for the holding. The amendments take account of the list of matters in section 13 of the 1991 act that require to be taken into account when calculating rent.

My amendments 300 and 304 update a cross-reference in the respective powers of the Scottish ministers to make further provision and regulations in relation to matters that the Land Court is to consider. Failure to make that change would result in a misalignment of the process.

Douglas Lumsden’s amendments 299A and 299B would alter the wording of my amendment 299 to make it use the exact wording from section 13 of the 1991 act. I do not think that they would deliver the outcome that Douglas Lumsden is looking for, but I am happy to give the matter further consideration ahead of stage 3, if he is willing to have that discussion with me.

Douglas Lumsden’s amendment 545 proposes to further amend the Agricultural Holdings (Scotland) Act 1991 to precisely mirror the wording of section 13 of that act. That would mean that the Land Court would be required, when determining a fair rent for a 1991 act agricultural tenancy, to have regard to the open market rental value of any fixed equipment provided by the landlord and used by the tenant for a non-agricultural purpose. The amendment raises some interesting points, and I hope that I can continue the discussion with Douglas Lumsden in advance of stage 3.

Emma Harper’s amendments 536 and 538 seek to amend the list of matters that the Land Court must not have regard to when determining the fair rent of a holding for 1991 act tenancies and 2003 act tenancies, by adding the term

“tenant being in occupation of the holding”

to that list. I ask the committee to support those amendments, because it is important that tenants are not financially penalised because of the very fact that they have a tenancy.

Amendments 537 and 539, in Emma Harper’s name, would require the Land Court to provide to both parties a list of comparable holdings that it had considered when determining the rent for a holding for 1991 act tenancies and 2003 act tenancies. However, I do not think that the amendments would deliver the intended outcome. This is part of an issue that appears to be handled differently north and south of the border. I would like to explore the issue further with Emma Harper prior to stage 3, so I ask her not to move the amendments at this time.

Emma Harper’s amendments 520 and 521 seek to take away the right of a landlord or tenant to refer a legal question about rent reviews to the Scottish Land Court and propose that arbitration be used instead. I completely appreciate the intent behind those amendments, but more development work is needed, including making sure that necessary rights of appeal are in place for ECHR purposes. Again, I would like to explore the issue further with industry so that we can get it right. For those reasons, I ask Emma Harper not to move those amendments.

Finally, Tim Eagle’s amendment 541 would enable the landlord to require an increase in rent if an improvement was required to be made in order for the landlord to comply with the duty conferred on them by any enactment. I understand the issues that tenants and landlords face when there is an increased regulatory burden that results in an increased financial burden, but I think that the amendment goes too far. A landlord who has breached a duty or is at risk of doing so should not simply be able to pass on the compliance costs to the tenant. Indeed, the breach of duty might mean that the landlord is also in breach of the lease agreement. That would be an issue for future legislation whereby we could scrutinise it appropriately. I ask the committee not to support amendment 541.

I realise that we debated the amendments relating to the pre-emptive right-to-buy process for small landholders as well as 1991 act tenant farmers, including amendment 225, last week. It is, of course, amendment 225 that Tim Eagle is seeking to amend through his amendments.

In relation to amendment 225A, it is standard practice that such notices are in writing. That is also reflected by the requirement on the tenant to send a copy of the notice to the keeper, so I do not think that it is necessary to amend section 10 in that way. However, I am more than happy to have a conversation with Tim Eagle in relation to that, and to bottom out any concerns that might persist.

Tim Eagle’s amendments 225B and 225C seek to amend the regulation-making power included in amendment 225, which empowers a tenant to exercise their right to buy when their landlord takes certain steps with a view to transferring land and fails to notify the tenant. The amendment enables the Scottish ministers to make regulations for the timescales in which a tenant will be required to notify their landlord that they intend to exercise that right.

On amendment 225B, while it is the Scottish Government’s intention to engage with stakeholders and to make regulations, it would not be appropriate to amend the power in the way suggested, given that whether regulations are made is ultimately a decision for the Scottish Parliament, in line with the affirmative procedure.

Amendment 225C also seeks to restrict the scope of the power under amendment 225 in a way that would limit its effectiveness and ministers’ ability to make the intended changes. The ability of the regulations to modify section 29 of the 2003 act when providing for a period within which notice is to be given provides flexibility in the drafting approach, including for making any necessary consequential changes.

I cannot support amendment 543, for the reasons that I set out last week in relation to Tim Eagle’s amendment 226. Amendment 543 likewise seeks to limit the powers in the bill for the Scottish ministers to make regulations for how 1991 act tenant farmers can register their interest in acquiring the land comprised in their lease.

I ask the committee not to support the amendments in this group.

I press the amendment.

Again, because it is the approach that was agreed previously. I realise that there has been a lot of discussion about it over the past few years, but because the model was previously agreed, we intend to maintain it.

I appreciate that there is a debate and discussion about the general approach that has been taken. I have listened carefully to members’ views, including those of Fergus Ewing in relation to his amendments, which offer an alternative valuation methodology.

Tim Eagle’s amendment 240 proposes to decrease the amount of time between the landlord serving a notice of resumption to a tenant and the date of that resumption, which would interfere with the valuation process following the serving of a notice of resumption. Given the range of factors at play in a valuation, that would unnecessarily restrict the timing of that part of the process.

I am grateful to Fergus Ewing and others for raising these issues in their amendments, but I have not heard anything to convince me that we need a different approach to the valuation of 1991 act claims. The bill already provides for an affirmative power that enables the Scottish ministers to revise the valuation method for resumptions for 1991 act tenancies, so I am committed to proceeding with the measures that we have set out in that regard.

However, I agree that we need to explore whether a different approach would be better for 2003 act tenancies. It is important that we do everything that we can to reach a consensus about how to value that type of claim. It is also important that we do not kick the issue into the long grass. Accordingly, I reiterate the offer that I made last week in relation to working with Fergus Ewing and other members of the committee and having discussions to enable us to lodge an amendment at stage 3 that would give ministers an appropriate regulation-making power for 2003 act tenancies.

I also intend to lodge a similar amendment at stage 3 to address the points that Rhoda Grant will no doubt speak to in relation to her amendment 382, so that we can deal with concerns about ensuring fair compensation for a tenant who receives an incontestable notice to quit from their landlord. Of course, that is different from resumption, but the concerns were raised as part of this debate.

To conclude, I ask members not to support the amendments from Fergus Ewing, Tim Eagle and Rhoda Grant.

I am happy to, convener. The amendments in my name in this group reflect the commitment that I made at stage 1 to clarify proposed new schedule 5 to the Agricultural Holdings (Scotland) Act 1991, following the range of evidence and information that was provided by tenant farming stakeholders.

Amendment 287 seeks to remove new part 4 of schedule 5 to the 1991 act, which contains a list of improvements that facilitate or enhance sustainable regenerative agricultural production. Amendments 282 to 285 seek to modify parts 1 to 3 of the schedule to rehome the improvements that were included in part 4, which will now be included in the illustrative lists for which the consent of the landlord is required or of which the tenant may be required to notify the landlord.

I support Ariane Burgess’s amendment 286, which seeks to add to part 3 of the schedule two of the improvements that were listed in part 4.

Amendment 271, 275, 276 and 277 seek to modify the provisions on the Scottish Land Court’s determining whether to approve a proposed improvement following the removal of part 4 of the schedule. The court will still be required to consider whether an improvement is likely to facilitate or enhance sustainable or regenerative agricultural production. The corresponding improvements will be set out alongside those provisions rather than in part 4 of schedule 5.

Amendments 272, 273 and 274 seek to set out the process for notifying a landlord or obtaining their consent to carry out an improvement. The changes include requiring the landlord to provide written reasons to the tenant when they have not agreed on the terms of consent for a proposed improvement, or when they object to a proposed improvement following notification by a tenant.

Amendments 268 to 271, 275, 278, 279, 281 and 288 are minor consequential amendments, which relate to those that I have already discussed.

I hope that members will support my amendments.

I turn to Tim Eagle’s amendments. Amendment 544 sets out a statutory process for the landlord to request further information from the tenant about a proposed improvement for which the landlord’s consent is sought—including the timeframe for responding and the effect of failing to do so. That would add unnecessary complexity to the process and place an unreasonable burden on the tenant to respond to a further request for information.

Amendment 535 would permit the landlord to notify the tenant that they will carry out on the tenant’s behalf improvements required by enactments or by the lease. That could have an effect on the rental value, because improvements that are paid for by the landlord are included in rental calculations.

I understand the issue that amendments 544 and 535 are trying to resolve, but what they propose needs further consideration and discussion with the industry. I am not sure that the bill is the right place for what they are trying to do. That would be something for future legislative change, because the range of unintended consequences needs to be fully considered, given the interface of amendment 535 with not only the houses on a tenancy but the rental values of tenancies.

Amendment 276A seeks to modify the list of matters that the Scottish Land Court must consider when it is deciding whether to approve the carrying out of an improvement. The list would include whether sufficient information has been provided to the landlord to enable them to make an informed decision, in line with the new duty that Tim Eagle seeks to create in amendment 544. The Scottish ministers already have the ability to prescribe the information that a tenant’s notice must include. However, there might be cases in which, for various reasons, less information is available. Ultimately, it is in both parties’ interests to provide sufficient information in relation to a proposed improvement, given that the tenant will be seeking the landlord’s consent or hoping that they do not object following a notice. Therefore, I do not think that amendment 276A is necessary.

Amendment 280 seeks to require that the affirmative procedure be used to alter the illustrative activities for the non-exhaustive lists for parts 1 and 2 of new schedule 5 to the 1991 act, and to add any activities to part 3.

In my response to the stage 1 report, I confirmed that we are

“committed to working closely with stakeholders before bringing forward any changes that might be helpful for the sector.”

However, there are technical issues in relation to the drafting of the amendment, and it fails to make a necessary consequential change.

Amendment 540 would restrict the ability of a tenant to object to a proposed improvement detailed in a landlord improvement notice under section 14A, which would mean that a tenant would be prohibited from objecting to an improvement if it related to an item of fixed equipment that was considered by the landlord

“to be an economic requirement for the purposes for which the farm is let”

and the landlord has given the tenant the opportunity to relinquish the item. A tenant would not be entitled to compensation if an item of fixed equipment was relinquished in such circumstances.

Amendment 540 is a significant amendment that would have a range of potential unintended consequences that would place financial burdens on tenants, and there would be no ability to recover costs if the item was relinquished.

Accordingly, I ask members not to support Tim Eagle’s amendments in this group.

I move amendment 268.

I hope that I will be able to shed light—

In relation to the control of deer, those matters are being dealt with and considered through the Natural Environment (Scotland) Bill; that is where matters in relation to control are considered. Here, we are dealing with the impact on the tenant. Ultimately, we are trying to ensure that there is fair compensation to the tenant for damage that comes about through no fault of theirs.

Emma Harper’s amendment 524 reverses a change made by the bill to clarify the law. I do not believe that the amendment is necessary. A tenant who has a right to kill and take game does not require permission from the landlord to do so. They do not need to have a right and permission, which is the effect of the amendment.

Amendments 518 and 519 seek to take away the right of a landlord or tenant to refer a question about compensation to the Scottish Land Court. Instead, there would be compulsory arbitration, which is unusual. It would be left to ministers to make that work, if they could, through secondary legislation. I appreciate the reasons why those amendments have been introduced. I agree that it would be helpful to consider, over the longer term, how alternative dispute resolution processes such as arbitration might help the tenant farming sector. However, we need to be able to explore those issues further in discussions with our wider stakeholders.

I mentioned last week that we would look to consult on the powers of the tenant farming commissioner. We will look to add to that the theme of alternative dispute resolution, so that we can tease the matter out more thoroughly.

I ask the member not to press her amendments.

I absolutely appreciate that. The reason why we are discussing these issues is because they are not necessarily easy to resolve. Some of them have been under discussion for quite some time. However, notwithstanding the issues that relate to amendment 542, I am keen to commit to having wider discussion, engagement and consultation, because there are issues in relation to the Arbitration (Scotland) Act 2010, some parts of which have not been commenced. Ultimately, we want to ensure that we get this right for everybody involved in the process, which is why wider engagement and consultation are so important.

Thank you, convener. I would have to look at that specific point. Other than that, I do not have anything further to add to my comments.

As we have touched on in our debates on previous groupings of amendments, including groups 37 and 38, I absolutely appreciate why Emma Harper has lodged amendment 542 and why we should consider encouraging arbitration for some disputes. However, there needs to be space for alternative dispute resolution more generally. Although the amendment focuses on arbitration, there are other tools that can be considered.

There are also technical issues with the amendment, given that parts of the Arbitration (Scotland) Act 2010 have yet to be commenced, in part because of the challenges of making arbitration work for statutory disputes. At present, under the Agricultural Holdings (Scotland) Act 1991, tenant farmers and their landlords are able to undertake arbitration and still have the right of appeal, on a point of law, to the Land Court. However, that process is not used, because some parties consider that the system does not work and will not be entered into in good faith.

For the reasons that I have outlined in relation to previous groupings, and because of the wider commitment to tease out some matters in more detail and have a wider discussion with industry and stakeholders, I ask Emma Harper not to press amendment 542.