Commentary on Sections Part 10 – Agricultural Holdings Landlord’s objection to tenant’s successor Section 109 – Objection by landlord to legatee or acquirer on intestacy
623.Section 109 sets out a new objection process by a landlord to a legatee or acquirer.
624.Section 11 of the 1991 Act sets out the provisions for bequest of leases for 1991 Act tenancies, including the objection process. Section 12 of the 1991 Act outlines the right of the landlord to object to an acquirer of a lease under a 1991 Act tenancy on intestacy.
625.Section 109 amends sections 11 and 12 of the 1991 Act by repealing the relevant subsections which deal with the objection process and by inserting, after section 12, new sections 12A, 12B and 12C, which outline the procedures that the landlord is required to follow if the landlord wishes to object to a legatee or an acquirer under a 1991 Act tenancy.
626.Inserted section 12A outlines the procedure when the landlord is objecting to a near relative (legatee or acquirer) of the deceased tenant. The Act limits the grounds that the landlord has when objecting to a near relative.
627.Subsections (1) and (2) provide that, if a legatee or an acquirer who is a near relative of the deceased tenant gives notice to the landlord of intention to take on the tenancy, the landlord is entitled, within one month, to serve a counter-notice to that person stating that the landlord objects to receiving the person as a tenant under the lease.
628.Subsection (3) states that the landlord’s grounds of objection to a near relative are limited to three circumstances. The three grounds available to the landlord for objection are: that the person is not of good character, that the person does not have sufficient resources to enable the person to farm the holding efficiently, or that the person does not have adequate training or expertise in agriculture to enable the person to farm with reasonable efficiency.
629.Subsection (4) states that this last ground of objection does not apply where the person is engaged in a course of relevant agricultural training, or will begin such training before the end of the period of six months beginning with the date on which notice was given to the landlord of the acquisition, and also states that the training must be completed within four years of that date. That person is also required to have made arrangements for the holding to be farmed efficiently while the person completes the course.
630.Subsection (5) provides that the landlord has one month after serving the counter-notice to apply to the Land Court for an order, in the case of a legatee, declaring the bequest to be null and void or, in the case of an acquirer, terminating the lease.
631.Subsection (6) states that, if any of the grounds of objection available to the landlord are established to the satisfaction of the Land Court, the Court is required to make an order, in the case of a legatee, declaring the bequest to be null and void and, in the case of an acquirer, terminating the lease, effective from either Whitsunday or Martinmas, as the court specifies.
632.Subsection (7) provides that, if the grounds of objection are not found, the Land Court must make an order declaring that the legatee or the acquirer is the new tenant under the lease and the lease is binding on the landlord from the date of death of the deceased tenant.
633.Subsection (8) states that, where the landlord does not make such an application to the Land Court within the one month period, the counter-notice becomes invalid and the lease is binding on the landlord and the legatee or acquirer from the date of the deceased tenant’s death.
634.Section 12B sets out the procedure for objection by the landlord when the legatee or the acquirer is not a near relative of the deceased tenant.
635.Subsections (1) and (2) provide that, if a legatee or an acquirer who is not a near relative of the deceased tenant gives notice to the landlord of intention to take on the tenancy, the landlord is entitled, within one month, to serve a counter-notice to that person stating that the landlord objects to receiving the person as a tenant under the lease. The landlord has the power in the case of a legatee to declare the bequest to be null and void, and, in the case of an acquirer, to terminate the lease with effect from Whitsunday or Martinmas as the landlord specifies, but which must be at least one year and not more than two years from the date of the counter-notice.
636.Subsection (3) provides that the legatee or acquirer may make an appeal to the Land Court, within one month of receiving the counter-notice.
637.Subsections (4) and (5) state that if the legatee or acquirer can establish on any reasonable ground, to the satisfaction of the Land Court, why the bequest should not be null and void or why the lease should not be terminated, the Land Court must make an order quashing the counter-notice. If not, the Land Court must make an order confirming the counter-notice.
638.Inserted section 12C sets out supplementary provisions for landlord’s objection.
639.Subsections (1) and (2) provide that the legatee or acquirer is to have possession of the holding, pending the outcome of any objection by the landlord under section 12A or 12B. The legatee or the acquirer must have received consent from the executor and there must be no order from the Land Court directing otherwise.
640.Subsection (3) provides that, in the case of a legatee, if the bequest is declared null and void, the right to the lease is to be treated as part of the intestate estate of the deceased tenant in accordance with the Succession (Scotland) Act 1964.
641.Subsection (4) provides that, in the case of an acquirer, if the lease is terminated, that termination is to be treated as termination of the acquirer’s tenancy of the holding for the purposes of the compensation provisions in Parts 4 and 5 of the 1991 Act. Subsection (5) also states that the acquirer is not entitled to compensation for disturbance.
642.Subsection (5) of section 109 of the Act repeals section 25 of the 1991 Act relating to the termination of tenancies acquired by succession. The ability of the landlord to object to an incoming tenant who has succeeded to the tenancy on the death of the previous tenant is replaced by the objection procedure in new sections 12A to 12B. Part 4 of schedule 2 of the Act also contains other amendments and repeals consequential on this change, including the repeal of schedule 2 of the 1991 Act (which contained the grounds on which a landlord could object to a near relative under section 25).