News Release Scottish Tenant Farmers Association

News Release

 29th November 2017



The Scottish Tenant Farmers Association has welcomed the commencement this week of Modern Limited Duration Tenancies created in the Land Reform Act 2016. The MLDT, replaces Limited Duration Tenancies on 30th November and will be the new letting vehicle for leases of 10 years or longer.

MLDts are very similar to LDTs although there are some important differences which are designed to make them more attractive to landlords. There is now much 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.

An important innovation is a 5 year break clause for new entrants and a landlord will be entitled to bring the tenancy to an end after the first 5 years if he is not using the land in accordance with the rules of good husbandry or has not complied with provisions of the lease. MLDTs are subject to the same succession provisions as 1991 Act tenancies and improvements are treated the same way as 1991 tenancies and LDTs.  An important caveat remains for prospective tenants to carry forward improvements from a previous tenancy.

Commenting on the new MLDTs, STFA Chairman Christopher Nicholson said; “The provisions in the Land Reform are taking some time to be enacted, largely due to the amount of complex secondary legislation required so we are pleased to see that the new style MLDTs have now become available. We hope that MLDTs will soon become the norm in letting land and we are pleased to note that there are already new tenancies on the point of being signed, some for substantial periods on time.

“Since Limited Duration Tenancies were first created in 2003 there have been a number of changes to address landlords’ concerns. Minimum term lengths have been reduced from 15 to 10 years and the latest reform introduces break clauses to allow landlords to get rid of an unsatisfactory new entrant and a get out of jail card for a new entrant in an unsatisfactory tenancy.  Rent reviews are subject to virtual freedom of contract and so there are now very few reasons for landlords’ not to use MLDTs.

“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.”