Scottish Tenant Farmers Association

News Release

27th January 2021



The Scottish Tenant Farmers Association has welcomed the news today that the Rural Economy and Connectivity Committee of the Scottish Parliament has approved all 3 SSIs to enact the Relinquishment and Assignation provisions in the Land Reform Act 2016. The new provisions will be ready for use from the 28th February.

Tenants wishing to retire now have a new statutory right to realise value for their tenancies and exit farming a time of their choosing with the prospect of a retirement package. The provisions enable an existing tenant to relinquish the tenancy on payment by the landlord of a statutory valuation based on the value of the tenancy and the tenant’s improvements.  Where the landlord does not wish to pay the tenant the statutory valuation to relinquish the tenancy, the tenant can assign it for value to a new entrant or progressing farmer.

Commenting on today’s decision by the REC Committee, STFA Chairman Christopher Nicholson said:

“The tenanted sector will be delighted that, after a long and drawn-out consultation and legal examination, tenants wishing to retire and move on, now have the right to an exit route from farming which will provide them with an enhanced value for their tenancy above traditional statutory waygo compensation. In some cases the landlord will prefer to decline the relinquishment and let the tenant assign his lease to either a new entrant or a progressing farmer. This will create new opportunities and help open up the tenanted sector.

“STFA is aware that there are a number of tenants who have been waiting for years to relinquish their tenancies but we would caution them not to be too hasty, but to plan ahead and to take account of the implications of relinquishment and assignation such as taxation and the tight time scales laid out in the statutory process. The valuation is to be completed within an 8 week period and tenants must ensure that they are able to supply the valuer with all the necessary facts and figures, completion of an amnesty agreement or an agreed list of improvements will be essential in this regard.

“STFA is encouraging tenants wishing to retire to make an informal approach to their landlords before serving relinquishment notices and triggering the statutory process.   A number of informal relinquishments and assignations have already taken place over the past few years and there are a number of agents who are experienced in negotiating fair end of tenancy settlements with a willing landlord. Some landlords have been unwilling to enter into informal discussions, but this may change now that the statutory legislation is in place, we believe that most relinquishment and assignation agreements will take place through informal negotiation but guided by the statutory process

“The Tenant Farming Commissioner is in the process of drawing up detailed guidance on relinquishment and assignation, he is appointing a specialist valuers panel and valuation guidance is being drawn up and will available before the end of February when relinquishment and assignation provisions come into force.”