Relinquishment and Assignation Legislation for Tenant Farmers

17 March 2021

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The highly anticipated Relinquishment and Assignation Legislation from the Land Reform (Scotland) Act 2016 finally came into force on the 28th February 2021. After five years of waiting for the legislation to be put into action, these provisions will help existing tenants to retire or quit the tenancy and will also provide opportunities for young people to enter the profession.

The R&A Legislation will allow a tenant the chance to relinquish the tenancy in return for a payment. The compensation is based on 50% of the difference between the vacant possession value of the holding and the tenanted value of the holding, plus any payment due to the tenant for improvements and less any dilapidation payment due to the landlord.

If the landlord does not wish to buy the tenancy, it can be assigned for value to a new entrant or progressive farmer. There are specific requirements to be classed as a ‘new entrant’ or ‘progressive farmer’, detail can be found on them here.

If the tenant would like to relinquish the tenancy, once this process is initiated it creates a sequence of time limited procedures and a valuation would need to be undertaken, the cost of which is the responsibility of the tenant. Once the Tenant Farmer Commissioner has received a valid notice of intention to relinquish, they will appoint a valuer to assess the compensation payable within 28 days. The landlord and tenant can either agree on a preferred valuer, or the TFC will invite proposals from panel members to provide a quote.

It should be noted that as this legislation requires the provision of a large amount of relevant information, significant financial costs and it can be a time-consuming exercise with no guarantee of that you will reach your expected outcome. Therefore, we advise that tenants have a discussion with a professional advisor to gain a clear understanding of what they are undertaking before entering any formal procedure.

Two of the fbrseed directors, Richard Armitage and Rob Forrest, were appointed to the Tenant Farmer Commissioner’s Panel of independent valuers. Therefore, tenant farmers can either approach them privately to undertake a valuation, or they could be allocated through TFC.

For further information about our farm valuation services you can email or take a look at this webpage.

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