What is happening at Glenree? Land reform and agricultural holdings in microcosm, one year on

Another year, another Martinmas.

As explained in a post roughly a year ago, Martinmas is a traditional date of the Scottish calendar that has some significance in property and rural circles. My post last year was my attempt to explain what was going on when Martinmas 2015 arrived at a farm on the Scottish mainland, namely Colstoun Mains, bringing a complex legal relationship to an end. Once again, Martinmas signals the end of a legal relationship, in this case at Glenree, a farm on the Isle of Arran. There are others in a similar situation, but this farm has become a focal point (see this note in The National and this explanation on Lesley Riddoch’s website).

As lawyers might say when drafting things other than in plain English, my blog post applies in 2016, mutatis mutandis. That is to say, it applies with the necessary changes. Or in other words, it remains relevant (I hope). Those wondering what is happening now should be able to find some insight from that year old post.

To explain very quickly (and as with last year, I have not looked at the documentation) I glean the farmers and landowner here entered into a fixed-term agreement to farm the land via a Scottish limited partnership. This limited partnership model was the industry response to a lack of suitable fixed-term letting vehicle of rural land in Scotland.

The farmers affected this year once again fall into the “no but yes but no” assessment of whether they are tenant farmers.

Why “no but yes but no”?

“No” because at the outset the tenant would have been the limited partnership.

“Yes” because by [defective] law enacted in 2003 the farmer became the tenant outright.

“No” because that law was later struck down and nothing has made the occupants at Glenree tenants in the technical sense of the term since.

This is complicated. The law has not become any easier since Part 10 of the Land Reform (Scotland) Act 2016 hit the statute books. To say the farming industry as a whole is at a crossroads as it awaits full implementation of that legislation (with the added curveball of Brexit to contend with) would be an understatement. To put it lightly.

Situations like Glenree are always difficult to draw wider lessons from. In addition to indulging in Latin, lawyers occasionally note that hard cases make bad law. The micro is undoubtedly challenging here, but what about the macro? Sure, a farming business is coming to a definite end and those involved are facing an uncertain future, but it would also be fair to say landlords are not exactly lining up to let land at the moment, so what steps can be taken that do not tenderise an already tender situation?

With that, I bow out, and indeed cop out. I am not going to offer any solutions. The main point of this blog post is to resurrect my 2015 post and in passing highlight some of the current issues. The Scottish Government has recently announced plans for further new starter opportunities, but there is only so much that can be done with public land. Meanwhile, there are plans to enshrine a right to food into Scots law. If that right to food is going to be sustainable, rural Scotland has to be organised in a way that allows that to happen.


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7 Responses to What is happening at Glenree? Land reform and agricultural holdings in microcosm, one year on

  1. zetorzetor says:

    Limited partnerships were seldom for a fixed period.
    They were usually open ended and following the initial period, they “will continue thereafter from year to year”
    This implication of continuity was necessary to entice the tenant to invest in the holding.
    These holdings were invariably run down and incapable of being run efficiently without such investment.
    Hence the move to let them rather than farm them inhand.

    • basedrones says:

      Thanks for the comment.

      Some limited partnerships did have automatic termination without any need for a notice, and these would not have been affected by the 2003 legislation.

      Other limited partnerships were set up for minimum terms (say 10 years), which (depending on your perspective) could be characterised as a fixed term, but then with the ability to run on if everyone was happy with the scheme. These LPs would have had some kind notice period to bring them to an end at the end of the minimum term or at any subsequent anniversary to that date. Whilst many of them did continue, they were vulnerable to termination by notice, hence there was no true security of tenure.

      There was a model for ongoing security of tenure (a secure agricultural holding, or what is now known as a 1991 Act tenancy, to an individual), but the usage of limited partnerships was quite deliberate to allow the year to year running to be brought to an end.

      • zetorzetor says:

        I dont why you persist with this misinformation.
        Limited partnerships did not have minimum terms, they had “initial terms” which have a very different meaning, implying a much longer period of let was to follow.
        They could not be ended at the end of the intial period as the lease stated that it “will continue” not “may continue”
        Ross finnie should have ended all limited partnerships when he had the chance in 2003

  2. neilking says:

    That’s a misunderstanding zetor. LPs *could* be terminated at the end of their minimum or initial terms (it doesn’t matter what you call it). The “will continue” bit only applied if it had not been terminated at the end of the minimum/initial term or any anniversary thereafter.

    To put that another way, if an LP was expressed as being “for fifteen years [=minimum/initial term] failing which it will continue from year to year thereafter” that means it could be terminated at the end of year 15 (but not earlier), or year 16, or year 17, 18, 19 etc. etc. etc.

    • zetorzetor says:

      It rather does matter what you call the initial period. They were carefully worded that way to imply something that some landlords had no intention of honouring while encouraging the tenant to invest on a false promise.

      • neilking says:

        I can assure you they weren’t. They were worded that way to avoid the legally untidy scenario of the limited partnership ending at a different date in the year from the lease itself. To believe otherwise is the stuff of conspiracy theories.

        It’s the most natural thing in the world for an L and a T (or the parties to any other type of contract lasting for a period of time) to agree “Let’s sign up for an initial period of 15 [or whatever] years to begin with and we’ll see how it goes and if all goes well, there’s no reason why we couldn’t carry on for longer.” You seem to be contending that that ought to be recorded by a legal document giving T the option to remain indefinitely but no L would ever voluntarily sign up to that.

        If T believed he was going to be there for longer than 15 years and invested in improvements accordingly, then he has a statutory right to compensation for improvements that are unexhausted when he has to go. That’s the best the law (always a blunt instrument and never a substitute for people acting reasonably towards each other) can do to square the circle of how to deal with people fairly when they’ve fallen out with each other or events they have no control over intervene such that one of them doesn’t want to continue in the relationship any longer.

  3. Pingback: My 2016 in Review | basedrones

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