Agricultural Holdings (Scotland) Act 1991 (c. 55)

(The document as of February, 2008)

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(a) the notice to quit relates to land being permanent pasture which the landlord has been in the habit of letting annually for seasonal grazing or of keeping in his own occupation and which has been let to the tenant for a definite and limited period for cultivation as arable land on the condition that he shall, along with the last or waygoing crop, sow permanent grass seeds;

(b) the notice to quit is given on the ground that the land is required for use, other than agriculture, for which permission has been granted on an application made under the enactments relating to town and country planning, or for which (otherwise than by virtue of any provision of those enactments) such permission is not required;

(c) the Land Court, on an application in that behalf made not more than 9 months before the giving of the notice to quit, were satisfied that the tenant was not fulfilling his responsibilities to farm the holding in accordance with the rules of good husbandry, and certified that they were so satisfied;

(d) at the date of the giving of the notice to quit the tenant had failed to comply with a demand in writing served on him by the landlord requiring him within 2 months from the service thereof to pay any rent due in respect of the holding, or within a reasonable time to remedy any breach by the tenant, which was capable of being remedied, of any term or condition of his tenancy which was not inconsistent with the fulfilment of his responsibilities to farm in accordance with the rules of good husbandry;

(e) at the date of the giving of the notice to quit the interest of the landlord in the holding had been materially prejudiced by a breach by the tenant, which was not capable of being remedied in reasonable time and at economic cost, of any term or condition of the tenancy which was not inconsistent with the fulfilment by the tenant of his responsibilities to farm in accordance with the rules of good husbandry;

(f) at the date of the giving of the notice to quit the tenant's apparent insolvency had been constituted in accordance with section 7 of the [1985 c. 66.] Bankruptcy (Scotland) Act 1985;

(g) section 25(1) of this Act applies, and the relevant notice complies with section 25(2)(a), (b) and (d) of this Act;

and, where any of paragraphs (a) to (f) above applies, the ground under the appropriate paragraph on which the notice to quit proceeds is stated in the notice.

23 Consent by Land Court or arbitration on notices to quit

(1) An application by a landlord for the consent of the Land Court under section 22 of this Act to the operation of a notice to quit shall be made within one month after service on the landlord by the tenant of a counter-notice requiring that subsection (1) of that section shall apply to the notice to quit.

(2) A tenant who has been given a notice to quit in connection with which any question arises under section 22(2) of this Act shall, if he requires such question to be determined by arbitration under this Act, give notice to the landlord to that effect within one month after the notice to quit has been served on him.

(3) Where the award of the arbiter in an arbitration required under subsection (2) above is such that section 22(1) of this Act would have applied to the notice to quit if a counter-notice had been served within the period provided for in that subsection, that period shall be extended up to the expiry of one month from the issue of the arbiter's award.

(4) Where such an arbitration as is referred to in subsection (2) above has been required by the tenant, or where an application has been made to the Land Court for their consent to the operation of a notice to quit, the operation of the notice to quit shall be suspended until the issue of the arbiter's award or of the decision of the Land Court, as the case may be.

(5) Where the decision of the Land Court giving their consent to the operation of a notice to quit, or the award of the arbiter in such an arbitration as is referred to in subsection (2) above, is issued at a date later than 6 months before the date on which the notice to quit is expressed to take effect, the Land Court, on application made to them in that behalf at any time not later than one month after the issue of the decision or award aforesaid, may postpone the operation of the notice to quit for a period not exceeding 12 months.

(6) If the tenant of an agricultural holding receives from the landlord notice to quit the holding or a part thereof and in consequence thereof gives to a sub-tenant notice to quit that holding or part, section 22(1) of this Act shall not apply to the notice given to the sub-tenant; but if the notice to quit given to the tenant by the landlord does not have effect, then the notice to quit given by the tenant to the sub-tenant shall not have effect.

(7) For the purposes of subsection (6) above, a notice to quit part of the holding which under section 30 of this Act is accepted by the tenant as notice to quit the entire holding shall be treated as a notice to quit the holding.

(8) Where notice is served on the tenant of an agricultural holding to quit the holding or a part thereof, being a holding or part which is subject to a sub-tenancy, and the tenant serves on the landlord a counter-notice in accordance with section 22(1) of this Act, the tenant shall also serve on the sub-tenant notice in writing that he has served such counter-notice on the landlord and the sub-tenant shall be entitled to be a party to any proceedings before the Land Court for their consent to the notice to quit.

24 Consents for purposes of section 22

(1) Subject to subsection (2) below and to section 25(3) of this Act, the Land Court shall consent under section 22 of this Act to the operation of a notice to quit an agricultural holding or part of an agricultural holding if, but only if, they are satisfied as to one or more of the following matters, being a matter or matters specified by the landlord in his application for their consent--

(a) that the carrying out of the purpose for which the landlord proposes to terminate the tenancy is desirable in the interests of good husbandry as respects the land to which the notice relates, treated as a separate unit;

(b) that the carrying out thereof is desirable in the interests of sound management of the estate of which that land consists or forms part;

(c) that the carrying out thereof is desirable for the purposes of agricultural research, education, experiment or demonstration, or for the purposes of the enactments relating to allotments, smallholdings or such holdings as are referred to in section 64 of the [1948 c. 45.] Agriculture (Scotland) Act 1948;

(d) that greater hardship would be caused by withholding than by giving consent to the operation of the notice;

(e) that the landlord proposes to terminate the tenancy for the purpose of the land being used for a use, other than for agriculture, not falling within section 22(2)(b) of this Act.

(2) Notwithstanding that they are satisfied as aforesaid, the Land Court shall withhold consent to the operation of the notice to quit if in all the circumstances it appears to them that a fair and reasonable landlord would not insist on possession.

(3) Where the Land Court consent to the operation of a notice to quit they may (subject to section 25(4) of this Act) impose such conditions as appear to them requisite for securing that the land to which the notice relates will be used for the purpose for which the landlord proposes to terminate the tenancy.

(4) Where, on an application by the landlord in that behalf the Land Court are satisfied that by reason of any change of circumstances or otherwise any condition imposed under subsection (3) above ought to be varied or revoked, they shall vary or revoke the condition accordingly.

25 Termination of tenancies acquired by succession

(1) This section applies where notice to quit is duly given to the tenant of an agricultural holding who acquired right to the lease of the holding--

(a) under section 16 of the [1964 c. 41.] Succession (Scotland) Act 1964; or

(b) as a legatee, under section 11 of this Act.

(2) Notice to quit is duly given to a tenant to whom this section applies if--

(a) it complies with section 21 of this Act; and

(b) it specifies as its effective date--

(i) where, when he acquired right to the lease, the unexpired period of the lease exceeded 2 years, the term of outgo stipulated in the lease;

(ii) where, when he acquired right to the lease, the unexpired period was 2 years or less, the term of outgo stipulated in the lease or the corresponding date in any subsequent year, being a date not less than one nor more than 3 years after the said acquisition;

(c) where he was a near relative of the deceased tenant from whom he acquired right, it specifies the Case set out in Schedule 2 to this Act under which it is given; and

(d) where he was not a near relative of the deceased tenant from whom he acquired right, he acquired right to the lease after 1st August 1958.

(3) Section 22(1) of this Act shall apply and section 24 of this Act shall not apply where subsection (2)(c) above applies and notice to quit is duly given in accordance with subsection (2)(a) to (c) above; and in such a case the Land Court shall consent to the operation of a notice duly given--

(a) where the holding was let before 1st January 1984, if they are satisfied that the circumstances are as specified in any Case set out in Part I of Schedule 2 to this Act;

(b) where the holding was let on or after that date and the notice specifies any of Cases 4, 5 or 7 in that Schedule, unless the tenant satisfies them that the circumstances are not as specified in that Case (provided that, for the purposes of Case 7, the tenant shall not be required to prove that he is not the owner of any land);

(c) where the holding was let on or after that date, if they are satisfied that the circumstances are as specified in Case 6 in that Schedule;

except that where any of Cases 1, 2, 3, 6 or 7 in that Schedule is specified, the Court shall withhold consent on that ground if it appears to them that a fair and reasonable landlord would not insist on possession.

(4) Where consent is given because the circumstances are as specified in Case 2 or 6 in Schedule 2 to this Act, the Land Court shall impose such conditions as appear to them necessary to secure that the holding to which the notice relates will, within 2 years after the termination of the tenancy, be amalgamated with the land specified in the notice; and section 27 of this Act shall, with any necessary modifications, apply to a condition imposed under this subsection as that section applies to a condition imposed under section 24 of this Act.

(5) Part III of Schedule 2 to this Act shall have effect for the purposes of interpretation of this section and that Schedule.

26 Certificates of bad husbandry

(1) For the purposes of section 22(2)(c) of this Act, the landlord of an agricultural holding may apply to the Land Court for a certificate that the tenant is not fulfilling his responsibilities to farm in accordance with the rules of good husbandry, and the Land Court, if satisfied that the tenant is not fulfilling his said responsibilities, shall grant such a certificate.

(2) In determining whether to grant a certificate under this section, the Land Court shall disregard any practice adopted by the tenant in compliance with any obligation imposed on him by or accepted by him under section 31B of the [1974 c. 40.] Control of Pollution Act 1974.

27 Penalty for breach of condition

(1) Where, on giving consent under section 22 of this Act to the operation of a notice to quit an agricultural holding or part of an agricultural holding, the Land Court imposes a condition under section 24(3) of this Act, and it is proved, on an application to the Land Court on behalf of the Crown that the landlord--

(a) has failed to comply with the condition within the period allowed, or

(b) has acted in breach of the condition,

the Land Court may impose on the landlord a penalty of an amount not exceeding 2 years' rent of the holding at the rate at which rent was payable immediately before the termination of the tenancy, or, where the notice to quit related to a part only of the holding, of an amount not exceeding the proportion of the said 2 years' rent which it appears to the Land Court is attributable to that part.

(2) A penalty imposed under this section shall be a debt due to the Crown and shall, when recovered, be paid into the Consolidated Fund.

28 Effect on notice to quit of sale of holding

(1) This section shall apply where a contract for the sale of the landlord's interest in land which comprises or forms part of an agricultural holding is made after the giving of a notice to quit and before its expiry.

(2) Unless, within the period of 3 months ending with the date on which a contract to which this section applies is made, the landlord and the tenant have agreed in writing whether or not the notice to quit shall continue to have effect--

(a) the landlord shall,--

(i) within 14 days after the making of the contract; or

(ii) before the expiry of the notice to quit,

whichever is the earlier, give notice to the tenant of the making of the contract; and

(b) the tenant may, before the expiry of the notice to quit and not later than one month after he has received notice under paragraph (a) above, give notice in writing to the landlord that he elects that the notice to quit shall continue to have effect.

(3) Where this section applies, unless--

(a) the landlord and tenant have agreed that the notice to quit shall continue to have effect;

(b) the tenant has so elected, under subsection (2)(b) above; or

(c) the landlord having failed to give notice of the making of the contract in accordance with subsection (2)(a) above, the tenant quits the holding in consequence of the notice to quit,

the notice to quit shall cease to have effect.

(4) Where this section applies and there is an agreement between the landlord and the tenant that the notice to quit shall continue to have effect, the notice shall not be invalid by reason only that the agreement is conditional.

29 Notice to quit part of holding to be valid in certain cases

(1) A notice to quit part of an agricultural holding held on a tenancy from year to year shall not be invalid on the ground that it relates to part only of the holding if it is given--

(a) for the purpose of adjusting the boundaries between agricultural units or of amalgamating agricultural units or parts thereof, or

(b) with a view to the use of the land to which the notice relates for any of the purposes mentioned in subsection (2) below,

and the notice states that it is given for that purpose or with a view to such use, as the case may be.

(2) The purposes referred to in subsection (1)(b) above are--

(a) the erection of farm labourers' cottages or other houses with or without gardens;

(b) the provision of gardens for farm labourers' cottages or other houses;

(d) the provision of small holdings under the Small Landholders (Scotland) Acts 1886 to 1931, or of such holdings as are referred to in section 64 of the [1948 c. 45.] Agriculture (Scotland) Act 1948;

(e) the planting of trees;

(f) the opening or working of coal, ironstone, limestone, brick-earth, or other minerals, or of a stone quarry, clay, sand, or gravel pit, or the construction of works or buildings to be used in connection therewith;

(g) the making of a watercourse or reservoir;

(h) the making of a road, railway, tramroad, siding, canal or basin, wharf, or pier, or work connected therewith.

30 Tenant's right to treat notice to quit part as notice to quit entire holding

Where a notice to quit part of an agricultural holding is given to a tenant, being a notice which is rendered valid by section 29 of this Act, and the tenant within 28 days after--

(a) the giving of the notice, or

(b) where the operation of the notice depends on any proceedings under the foregoing provisions of this Act, the time when it is determined that the notice has effect,

whichever is later, gives to the landlord a counter-notice in writing that he accepts the notice as a notice to quit the entire holding, to take effect at the same time as the original notice, the notice to quit shall have effect accordingly.

31 Reduction of rent where tenant dispossessed of part of holding

(1) Where--

(a) the tenancy of part of an agricultural holding terminates by reason of a notice to quit which is rendered valid by section 29 of this Act; or

(b) the landlord of an agricultural holding resumes possession of part of the holding in pursuance of a provision in that behalf contained in the lease,

the tenant shall be entitled to a reduction of rent of an amount, to be determined by arbitration, proportionate to that part of the holding, together with an amount in respect of any depreciation of the value to him of the residue of the holding caused by the severance or by the use to be made of the part severed.

(2) Where subsection (1)(b) above applies, the arbiter, in determining the amount of the reduction, shall take into account any benefit or relief allowed to the tenant under the lease in respect of the part whose possession is being resumed.

32 Further restrictions on operation of certain notices to quit

(1) Subsections (2) to (5) below shall apply where--

(a) notice to quit an agricultural holding or part of an agricultural holding is given to a tenant; and

(b) the notice includes a statement in accordance with section 22(2) of this Act and paragraph (d) thereof to the effect that it is given by reason of the tenant's failure to remedy a breach of a kind referred to in section 66(1) of this Act.

(2) If not later than one month from the giving of the notice to quit the tenant serves on the landlord a counter-notice in writing requiring that this subsection shall apply to the notice to quit, subject to subsection (3) below, the notice to quit shall not have effect (whether as a notice to which section 22(1) of this Act does or does not apply) unless the Land Court consent to the operation thereof.

(3) A counter-notice under subsection (2) above shall be of no effect if within one month after the giving of the notice to quit the tenant serves on the landlord an effective notice under section 23(2) of this Act requiring the validity of the reason stated in the notice to quit to be determined by arbitration.

(4) Where--

(a) the tenant has served on the landlord a notice of the kind referred to in subsection (3) above;

(b) the notice to quit would, apart from this subsection, have effect in consequence of the arbitration; and

(c) not later than one month from the date on which the arbiter's award is delivered to the tenant the tenant serves on the landlord a counter-notice in writing requiring that this subsection shall apply to the notice to quit;

the notice to quit shall not have effect (whether as a notice to which section 22(1) of this Act does or does not apply) unless the Land Court consent to the operation thereof.

(5) On an application made in that behalf by the landlord, the Land Court shall consent under subsection (2) or (4) above or (6) below to the operation of the notice to quit unless in all the circumstances it appears to them that a fair and reasonable landlord would not insist on possession.

(6) Where a notice to quit is given in accordance with section 66(3) of this Act in a case where the arbitration under that section followed an earlier notice to quit to which subsection (1) above applied, if the tenant serves on the landlord a counter-notice in writing within one month after the giving of the subsequent notice to quit (or, if the date specified in that notice for the termination of the tenancy is earlier, before that date), the notice to quit given under section 66(3) of this Act shall not have effect unless the Land Court consent to the operation thereof.

Part IVV Compensation for Improvements

33 Improvements

In this Part the following are referred to as "improvements"--

"1923 Act improvement" means an improvement carried out on an agricultural holding, being an improvement specified in Schedule 3 to this Act, and begun before 31st July 1931;
"1931 Act improvement" means an improvement so carried out, being an improvement specified in Schedule 4 to this Act and begun on or after 31st July 1931 and before 1st November 1948;
"old improvement" means a 1923 Act improvement or a 1931 Act improvement;
"new improvement" means an improvement carried out on an agricultural holding, being an improvement specified in Schedule 5 to this Act begun on or after 1st November 1948.

34 Right to compensation for improvements

(1) Subject to subsections (2) to (4), (7) and (8) below, and to sections 36 and 39 to 42 of this Act, a tenant of an agricultural holding shall be entitled, on quitting the holding at the termination of the tenancy, to compensation from the landlord in respect of improvements carried out by the tenant.

(2) A tenant whose lease was entered into before 1st January 1921 shall not be entitled to compensation under this section for an improvement which he was required to carry out by the terms of his tenancy.

(3) A tenant shall not be entitled to compensation under this section for an old improvement carried out on land which, at the time the improvement was begun, was not a holding within the meaning of the [1923 c. 10.] Agricultural Holdings (Scotland) Act 1923 as originally enacted, or land to which provisions of that Act relating to compensation for improvements and disturbance were applied by section 33 of that Act.

(4) Nothing in this section shall prejudice the right of a tenant to any compensation to which he is entitled--

(a) in the case of an old improvement, under custom, agreement or otherwise;

(b) in the case of a new improvement, under an agreement in writing between the landlord and the tenant;

in lieu of any compensation provided by this section.

(5) Where a tenant has remained in an agricultural holding during two or more tenancies, he shall not be deprived of his right to compensation under subsection (1) above by reason only that the improvements were not carried out during the tenancy on the termination of which he quits the holding.

(6) Subject to section 36(4) of this Act, a tenant shall be entitled to compensation under this section in respect of the 1931 Act improvement specified in paragraph 28 of Schedule 4 to this Act, or the new improvement specified in paragraph 32 of Schedule 5 to this Act (laying down of temporary pasture), notwithstanding that the laying down or the leaving at the termination of the tenancy of temporary pasture was in contravention of the terms of the lease or of any agreement made by the tenant respecting the method of cropping the arable lands; but, in ascertaining the amount of the compensation, the arbiter shall take into account any injury to or deterioration of the holding due to the contravention (except insofar as the landlord may have recovered damages therefor).

(7) Where under an agreement in writing entered into before 1st January 1921 a tenant is entitled to compensation which is fair and reasonable having regard to the circumstances existing at the time of the making of the agreement, for an old improvement specified in Part III of Schedule 3 to this Act or in Part III of Schedule 4 to this Act, such compensation shall, as respects that improvement, be substituted for compensation under subsection (1) above.

(8) Compensation shall not be payable under this Part of this Act in respect of repairs of the kind specified in paragraph 29 of Schedule 3 to this Act or in paragraph 29 of Schedule 4 to this Act unless, before beginning to execute any such repairs, the tenant gave to the landlord notice in writing under paragraph (29) of Schedule 1 to the [1923 c. 10.] Agricultural Holdings (Scotland) Act 1923, or under paragraph (30) of Schedule 1 to the [1931 c. 44.] Small Landholders and Agricultural Holdings (Scotland) Act 1931, of his intention to execute the repairs, together with particulars thereof, and the landlord failed to exercise the right conferred on him by the said paragraph (29) or, as the case may be, the said paragraph (30) to execute the repairs himself within a reasonable time after receiving the notice.

35 Payment of compensation by incoming tenant

(1) This section applies to compensation which is payable or has been paid to an outgoing tenant of an agricultural holding by the landlord under or in pursuance of this Act or the Agricultural Holdings (Scotland) Act 1923, the Small Landholders and Agricultural Holdings (Scotland) Act 1931, the [1948 c. 45.] Agriculture (Scotland) Act 1948 or the 1949 Act.

(2) Subject to subsection (3) below, any agreement made after 1st November 1948 between an incoming tenant and his landlord whereby the tenant undertakes to pay to the outgoing tenant or to refund to the landlord any compensation to which this section applies shall be null and void.

(3) Subsection (2) above shall not apply in the case of an improvement of a kind referred to in Part III of Schedule 5 to this Act, where the agreement is in writing and states a maximum amount which may be payable thereunder by the incoming tenant.

(4) Where, on entering into occupation of an agricultural holding, a tenant, with the consent in writing of the landlord pays to the outgoing tenant compensation to which this section applies--

(a) in respect of an old improvement, in pursuance of an agreement in writing made before 1st November 1948; or

(b) where subsection (3) above applies,

the incoming tenant shall be entitled, on quitting the holding, to claim compensation for the improvement or part in like manner, if at all, as the outgoing tenant would have been entitled if the outgoing tenant had remained tenant of the holding and quitted it at the time at which the tenant quits it.

(5) Where, in a case not falling within subsection (2) or (3) above, a tenant, on entering into occupation of an agricultural holding, paid to his landlord any amount in respect of the whole or part of a new improvement, he shall, subject to any agreement in writing between the landlord and the tenant, be entitled on quitting the holding to claim compensation in respect of the improvement or part in like manner, if at all, as he would have been entitled if he had been tenant of the holding at the time when the improvement was carried out and the improvement or part thereof had been carried out by him.

36 Amount of compensation under this Part

(1) Subject to subsections (2) to (4) below, the amount of any compensation payable to a tenant under this Part of this Act shall be such sum as fairly represents the value of the improvement to an incoming tenant.

(2) In the ascertainment of the amount of compensation payable in respect of an old improvement, there shall be taken into account any benefit which the landlord has given or allowed to the tenant (under the lease or otherwise) in consideration of the tenant carrying out the improvement.

(3) In the ascertainment of the amount of compensation payable under this section for a new improvement, there shall be taken into account--

(a) any benefit which the landlord has agreed in writing to give the tenant in consideration of the tenant carrying out the improvement; and

(b) any grant out of moneys provided by Parliament which has been or will be made to the tenant in respect of the improvement.

(4) In ascertaining the amount of any compensation payable under section 34(6) of this Act, the arbiter shall take into account any injury to or deterioration of the holding due to the contravention of the lease or agreement referred to in that subsection, except in so far as the landlord has recovered damages in respect of such injury or deterioration.

37 Consents necessary for compensation for some improvements

(1) Compensation under this Part of this Act shall not be payable for--

(a) a 1923 Act improvement specified in Part I of Schedule 3 to this Act;

(b) a 1931 Act improvement specified in Part I of Schedule 4 to this Act; or

unless, before the improvement was carried out, the landlord consented to it in writing (whether unconditionally or upon terms as to compensation or otherwise agreed on between the parties).

(2) Where such consent was given on terms agreed as to compensation, the compensation payable under the agreement shall be substituted for compensation under section 34 of this Act.

38 Notice required of certain improvements

(1) Subject to subsections (2) to (6) below, compensation under this Act shall not be payable for--

(a) a 1923 Act improvement specified in Part II of Schedule 3 to this Act;

(b) a 1931 Act improvement specified in Part II of Schedule 4 to this Act;

unless the tenant gave notice to the landlord in accordance with subsection (3) below of his intention to carry it out and of the manner in which he proposed to do so.

(2) Subsection (1) above shall not apply in the case of an improvement mentioned in subsection (1)(a) or (b) above, if the parties agreed by the lease or otherwise to dispense with the requirement for notice under subsection (3).

(3) Notice shall be in accordance with this subsection if it is in writing and--

(a) in the case of an improvement mentioned in subsection (1)(a) above, it was notice under section 3 of the [1923 c. 10.] Agricultural Holdings (Scotland) Act 1923, given not more than 3 nor less than 2 months,

(b) in the case of an improvement mentioned in subsection (1)(b) above, it was notice under the said section 3, given not more than 6 nor less than 3 months,

before the tenant began to carry out the improvement.

(4) In the case of an improvement mentioned in subsection (1)(a) or (b) above, compensation shall not be payable unless--

(a) the parties agreed on the terms as to compensation or otherwise on which the improvement was to be carried out;

(b) where no such agreement was made and the tenant did not withdraw the notice, the landlord failed to exercise his right under the said section 3 to carry out the improvement himself within a reasonable time; or

(c) in the case of an improvement mentioned in subsection (1)(b) above, where the landlord gave notice of objection and the matter was referred under section 28(2) of the [1931 c. 44.] Small Landholders and Agricultural Holdings (Scotland) Act 1931 for determination by the appropriate authority, that authority was satisfied that the improvement should be carried out and the improvement was carried out in accordance with any directions given by that authority as to the manner of so doing.

(5) If the parties agreed (either after notice was given under this section or by an agreement to dispense with it) on terms as to compensation, the compensation payable under the agreement shall be substituted for compensation under this Part of this Act.

(6) In subsection (4) above, "the appropriate authority" means--

(a) in relation to the period before 4th September 1939, the Department of Agriculture for Scotland;

(b) in relation to the period starting on that day, the Secretary of State.

39 Compensation for Sch. 5, Pt. II, improvements conditional on approval of Land Court in certain cases

(1) Subject to subsections (2) to (4) below, compensation under this Part of this Act shall not be payable in respect of a new improvement specified in Part II of Schedule 5 to this Act if, within one month after receiving notice under section 38(3) of this Act from the tenant of his intention to carry out the improvement, the landlord gives notice in writing to the tenant that he objects to the carrying out of the improvement or to the manner in which the tenant proposes to carry it out.

(2) Where notice of objection has been given under subsection (1) above, the tenant may apply to the Land Court for approval of the carrying out of the improvement, and on such application the Land Court may approve the carrying out of the improvement either--

(a) unconditionally, or

(b) upon such terms, as to reduction of the compensation which would otherwise be payable or as to other matters, as appears to them to be just,

or may withhold their approval.

(3) If, on an application under subsection (2) above, the Land Court grant their approval, the landlord may, within one month after receiving notice of the decision of the Land Court, serve notice in writing on the tenant undertaking to carry out the improvement himself.

(4) Where, on an application under subsection (2) above the Land Court grant their approval, then if either--

(a) no notice is served by the landlord under subsection (3) above, or

(b) such a notice is served but, on an application made by the tenant in that behalf, the Land Court determines that the landlord has failed to carry out the improvement within a reasonable time,

the tenant may carry out the improvement and shall be entitled to compensation under this Part of this Act in respect thereof as if notice of objection had not been given by the landlord, and any terms subject to which the approval was given shall have effect as if they were contained in an agreement in writing between the landlord and the tenant.

Part V Other Provisions Regarding Compensation

Market gardens

40 Market gardens

(1) This section applies to any agricultural holding which, by virtue of an agreement in writing made on or after 1st January 1898, is let or is to be treated as a market garden.

(2) This section also applies where--

(a) a holding was, on 1st January 1898 under a lease then current, in use or cultivation as a market garden with the knowledge of the landlord; and

(b) an improvement of a kind specified in Schedule 6 to this Act (other than such an alteration of a building as did not constitute an enlargement thereof) has been carried out on the holding; and

(c) the landlord did not, before the improvement was carried out, serve on the tenant a written notice dissenting from the carrying out of the improvement;

in relation to improvements whether carried out before or after 1st January 1898.

(3) In the application of Part IV of this Act to an agricultural holding to which this section applies, subject to subsections (5) and (7) below, the improvements specified in Schedule 6 to this Act shall be included in the improvements specified in Part III of each of Schedules 3, 4 and 5 to this Act.

(4) In the case of an agricultural holding to which this section applies--

(a) section 18 of this Act shall apply to every fixture or building affixed or erected by the tenant to or upon the holding or acquired by him since 31st December 1900 for the purposes of his trade or business as a market gardener;

(b) it shall be lawful for the tenant to remove all fruit trees and fruit bushes planted by him on the holding and not permanently set out, but if the tenant does not remove such fruit trees and fruit bushes before the termination of his tenancy they shall remain the property of the landlord and the tenant shall not be entitled to any compensation in respect thereof; and

(c) the right of an incoming tenant to claim compensation in respect of the whole or part of an improvement which he has purchased may be exercised although the landlord has not consented in writing to the purchase.

(5) Where a tenancy of a kind described in subsection (2) above was a tenancy from year to year, the compensation payable in respect of an improvement of a kind referred to in that subsection shall be such (if any) as could have been claimed if the 1949 Act had not been passed.

(6) Where the land to which this section applies consists of part only of an agricultural holding this section shall apply as if that part were a separate holding.

(7) Nothing in this section shall confer a right to compensation for the alteration of a building (not being an alteration constituting an enlargement of the building) where the alteration was begun before 1st November 1948.

41 Direction by Land Court that holding be treated as market garden

(1) Where--

(a) the tenant of an agricultural holding intimates to the landlord in writing his desire to carry out on the holding or any part thereof an improvement specified in Schedule 6 to this Act;

(b) the landlord refuses, or within a reasonable time fails, to agree in writing that the holding, or that part thereof, shall be treated as a market garden;

(d) the Land Court is satisfied that the holding or that part therof is suitable for the purposes of market gardening;

the Land Court may direct that section 40 of this Act shall apply to the holding or, as the case may be, part of a holding, either--

(i) in respect of all the improvements specified in Schedule 6 to this Act, or

(ii) in respect of some only of those improvements,

and that section shall apply accordingly as respects any improvement carried out after the date on which the direction is given.

(2) A direction under subsection (1) above may be given subject to such conditions, if any, for the protection of the landlord as the Land Court may think fit and, in particular, where the direction relates to part only of the holding, the direction may, on the application of the landlord, be given subject to the condition that the tenant shall consent to the division of the holding into two parts (one such part being the part to which the direction relates) to be held at rents agreed by the landlord and tenant or in default of agreement determined by arbitration, but otherwise on the same terms and conditions (so far as applicable) as those on which the holding is held.

(3) Where a direction is given under subsection (1) above, if the tenancy is terminated--

(a) by notice of intention to quit given by the tenant, or

(b) by reason of the tenant's apparent insolvency being constituted under section 7 of the [1985 c. 66.] Bankruptcy (Scotland) Act 1985,

the tenant shall not be entitled to compensation in respect of improvements specified in the direction unless he produces an offer which complies with subsection (4) below and the landlord fails to accept the offer within 3 months after the production thereof.

(4) An offer complies with this subsection if--

(a) it is in writing;

(b) it is made by a substantial and otherwise suitable person;

(c) it is produced by the tenant to the landlord not later than one month after the date of the notice of intention to quit or constitution of apparent insolvency as the case may be, or at such later date as may be agreed;

(d) it is an offer to accept a tenancy of the holding from the termination of the existing tenancy on the terms and conditions of the existing tenancy so far as applicable;

(e) it includes an offer, subject to subsection (5) below, to pay to the outgoing tenant all compensation payable under this Act or under the lease;

(f) it is open for acceptance for a period of 3 months from the date on which it is produced.

(5) If the landlord accepts an offer which complies with subsection (4) above the incoming tenant shall pay to the landlord on demand all sums payable to him by the outgoing tenant on the termination of the tenancy in respect of rent or breach of contract or otherwise in respect of the holding.

(6) Any amount paid by the incoming tenant under subsection (5) above may, subject to any agreement between the outgoing tenant and incoming tenant, be deducted by the incoming tenant from any compensation payable by him to the outgoing tenant.

(7) A tenancy created by the acceptance of an offer which complies with subsection (4) above shall be deemed for the purposes of section 13 of this Act not to be a new tenancy.

42 Agreements as to compensation relating to market gardens

(1) Where under an agreement in writing a tenant of an agricultural holding is entitled to compensation which is fair and reasonable having regard to the circumstances existing at the time of making the agreement, for an improvement for which compensation is payable by virtue of section 40 of this Act, such compensation shall, as respects that improvement, be substituted for compensation under this Act.

(2) The landlord and the tenant of an agricultural holding who have agreed that the holding shall be let or treated as a market garden may by agreement in writing substitute, for the provisions as to compensation which would otherwise be applicable to the holding, the provisions as to compensation in section 41(3) to (6) of this Act.

Miscellaneous

43 Compensation for disturbance

(1) Where the tenancy of an agricultural holding terminates by reason of--

(a) a notice to quit given by the landlord; or

(b) a counter-notice given by the tenant under section 30 of this Act,

and in consequence the tenant quits the holding, subject to subsections (2) to (8) below, compensation for the disturbance shall be payable by the landlord to the tenant.

(2) Compensation shall not be payable under this section where the application of section 22(1) of this Act to the notice to quit is excluded by any of paragraphs (a) or (c) to (f) of subsection (2) of that section.

(3) Subject to subsection (4) below, the amount of the compensation payable under this section shall be the amount of the loss or expense directly attributable to the quitting of the holding which is unavoidably incurred by the tenant upon or in connection with the sale or removal of his household goods, implements of husbandry, fixtures, farm produce or farm stock on or used in connection with the holding, and shall include any expenses reasonably incurred by him in the preparation of his claim for compensation (not being expenses of an arbitration to determine any question arising under this section).

(4) Where compensation is payable under this section--

(a) the compensation shall be an amount equal to one year's rent of the holding at the rate at which rent was payable immediately before the termination of the tenancy without proof by the tenant of any such loss or expense as aforesaid;

(b) the tenant shall not be entitled to claim any greater amount than one year's rent of the holding unless he has given to the landlord not less than one month's notice of the sale of any such goods, implements, fixtures, produce or stock as aforesaid and has afforded him a reasonable opportunity of making a valuation thereof;

(5) In subsection (4) above "rent" means the rent after deduction of such an amount as, failing agreement, the arbiter finds to be the amount payable by the landlord in respect of the holding for the year in which the tenancy was terminated by way of any public rates, taxes or assessments or other public burdens, the charging of which on the landlord would entitle him to relief in respect of tax under Part II of the [1988 c. 1.] Income and Corporation Taxes Act 1988.

(6) Where the tenant of an agricultural holding has lawfully sub-let the whole or part of the holding, and in consequence of a notice to quit given by his landlord becomes liable to pay compensation under this section to the sub-tenant, the tenant shall not be debarred from recovering compensation under this section by reason only that, owing to not being in occupation of the holding or part of the holding, on the termination of his tenancy he does not quit the holding or that part.

(7) Where the tenancy of an agricultural holding terminates by virtue of a counter-notice given by the tenant under section 30 of this Act and--

(a) the part of the holding affected by the notice to quit given by the landlord, together with any part of the holding affected by any previous notice to quit given by the landlord which is rendered valid by section 29 of this Act, is either less than a quarter of the area of the original holding or of a rental value less than one quarter of the rental value of the original holding, and

(b) the holding as proposed to be diminished is reasonably capable of being farmed as a separate holding,

compensation shall not be payable under this section except in respect of the part of the holding to which the notice to quit relates.

(8) Compensation under this section shall be in addition to any compensation to which the tenant may be entitled apart from this section.

44 Compensation for continuous adoption of special standard of farming

(1) Where the tenant of an agricultural holding proves that the value of the holding to an incoming tenant has been increased during the tenancy by the continuous adoption of a standard of farming or a system of farming which has been more beneficial to the holding than--

(a) the standard or system required by the lease, or

(b) in so far as no system of farming is so required, the system of farming normally practised on comparable holdings in the district,

the tenant shall be entitled, on quitting the holding, to obtain from the landlord such compensation as represents the value to an incoming tenant of the adoption of that more beneficial standard or system.

(2) Compensation shall not be recoverable under subsection (1) above unless--

(a) the tenant has, not later than one month before the termination of the tenancy, given to the landlord notice in writing of his intention to claim such compensation; and

(b) a record of the condition of the fixed equipment on, and the cultivation of, the holding has been made under section 8 of this Act;

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