Agricultural tenants’ rights to diversify in Scotland
Produced in partnership with Mike Blair of Gillespie MacAndrew
Agricultural tenants’ rights to diversify in Scotland

The following Property guidance note Produced in partnership with Mike Blair of Gillespie MacAndrew provides comprehensive and up to date legal information covering:

  • Agricultural tenants’ rights to diversify in Scotland
  • Diversification at common law
  • Statutory Diversification
  • Effect of alteration of use on nature of lease
  • Notice and procedure
  • Landlord’s response and options to notice of diversification
  • Application to Land Court
  • Effect of diversification on rent
  • Compensation on termination
  • Diversification and timber planted by the tenant

Diversification at common law

Diversification, ie the use of a holding for a non-agricultural purpose not sanctioned by the lease, would at common law be a breach of the lease, and may in many cases, in addition, incur a conventional irritancy. For further information, see: Tenant's right to diversify: Scottish Law of Leases [15.29].

Statutory Diversification

Part 3 of the Agricultural Holdings (Scotland) Act 2003 (AH(S)A 2003) gives agricultural tenants the right to diversify by using the land for a non-agricultural purpose. The right to diversify applies to 1991 Act Tenancies and to 2003 Act Tenancies other than short limited duration tenancies (SLDTs).

While diversification may at common law be an inversion of possession, and alter the character of the lease from being that of an agricultural holding (subject to the Agricultural Holdings (Scotland) Acts), if (and only if) the statutory procedure is followed, the lease remains agricultural in nature, notwithstanding the change of use.

The legislation does not appear to exclude the possibility that the whole of the land let under the lease could in principle be used for a diversified purpose.

Not all activity that might in general be described as ‘diversified’ is protected. One cannot use diversification applications to cover pre-existing activity, and the business must be the tenant’s own, and not, for example, carried via a wholly