Scottish Government introduces new land reform legislation with major implications for landowners

On 13^th March 2024, the Scottish Government introduced the Land Reform (Scotland) Bill. The aim of this Bill is to reform the law around large landholdings and certain types of leases of land. The controversial Bill includes measures for landholding over 1,000 hectares including potentially prohibiting the sale of the land until Ministers have been consulted and the impact on the local community assessed.

Landholdings of over 1,000 hectares account for over 50% of Scotland’s land so this Bill could potentially have drastic effects on how land is managed. If a sale of a landholding over 1,000 hectares is deemed by the ministers to have a negative impact on local communities, the land could be divided into smaller portions. This would allow for communities to purchase smaller land areas and provide opportunities for other parties who would not be able to purchase land otherwise to have the chance of land ownership.

To tackle climate change and reach net zero, many landowners throughout the country have started work on peatland restoration projects, woodland creation, riparian woodland and more regenerative and environmentally friendly farming practices. If large landholdings are broken down into smaller parcels, there is a risk that these current cohesive and large scale projects will be slowed due to minister intervention and the requirement for agreements to be made between multiple landowners. This will potentially slow down the progress that is already being made to reach net zero.

The Bill also puts legal responsibilities on landowners to demonstrate how their land is being used to address public policy priorities, contributing to nature restoration and reducing the impact climate change. Many landowners are already managing their land in a way to address these issues already. There will be the requirement for landowners to engage with local communities about how they use the land.

The Bill also sheds light on a proposed new tenancy model called a “Land Management Tenancy” which the Ministers will publish, this is to support tenancy to manage the land within their tenancies in ways that meet their needs as well as the nation’s. Measures are also included to reform tenant farming, increase sustainability and productivity and to compensate tenants at the end of their agreements for their investment of time and resources.

The Bill can be read in full here.

The Scottish Government has also published the report on the findings of a consultation held as part of a Strategic Environmental Assessment of agricultural tenancies, small landholdings and land management tenancy proposals. Within this report it is stated that many respondents noted that there needs to be a balance between tenants’ rights and landlords’ long term security. The respondents have also stated that further guidance and consultation is needed regarded a new tenancy model.

The report and findings can be read here.