TFC Blog: Housing in Agricultural Tenancies that are occupied by the tenant

Tenant Farming Commissioner Bob McIntosh discusses proposed changes to the required standards for agricultural housing rentals.

Houses which are rented out in the non-agricultural sector are subject to regulations which ensure that the landlord provides a property that meets certain minimum standards. Unless exempt, private landlords are required to register with the Local Authority and Local Authorities have powers to intervene if a rented property is not meeting the required standard.

The Tolerable Standard (TS) is a very basic standard that all houses should meet, including those in agricultural tenancies. It is a condemnatory standard: accommodation which is below the TS is not acceptable as living accommodation and Local Authorities have a duty to ensure that they are closed, demolished or brought up to standard. The Repairing Standard (RS) is the minimum standard that should apply to any property let out on a residential tenancy.

The requirement to meet the RS does not currently apply to most privately rented agricultural housing. Housing on agricultural holdings, including ‘tied housing’, rented crofts and small landholdings that is rented to an individual under an agricultural tenancy is currently not required to meet the same standards as other private rented accommodation. In such cases the farmhouse is treated as an item of fixed equipment like a shed or any other item of fixed equipment. The result is that in most tenancies the landlord has the responsibility for replacing and renewing parts of the farmhouse which are worn out through fair wear and tear and the tenant is responsible for repairing and maintaining the farmhouse. In cases, however, where a post lease agreement may have transferred responsibility for replacement and renewal of fixed equipment in a secure tenancy to the tenant, this will include the farmhouse. The end result of this is that some farmhouses have been improved by the landlord, some by the tenant, some by both and some have hardly been improved at all.

All of this is set to change. The current position arguably puts the agricultural tenant in a less favourable position than someone in a rented house in the non-agricultural sector. Scottish Ministers have indicated that they do not see it as equitable or acceptable that this situation should continue, and intend to make legislation in 2019 to introduce a requirement for rented agricultural housing to meet the RS by 2027. This should give ample time for discussions about what work may be required and where responsibilities lie, and for the necessary work to be carried out.

This change will undoubtedly lead to some difficult discussions between landlords and tenants. The legislation puts the onus for any work required on the landlord but it is not clear whether this will take precedence over existing post lease agreements which transfer responsibilities to the tenant. No doubt too, this will be an opportunity to engage in the age-old pastime of disagreeing over whether some of the work that may  be necessary is due to the landlord’s failure to renew or replace or the tenant’s failure to maintain. Whatever the complexities of agricultural holdings legislation, Ministers have made it clear that they expect these complexities to be addressed, so entrenched positions will not deliver a solution. A summit on this issue has already taken place last month, and all involved in the agricultural holdings sector need to give this issue some serious thought and must come together to agree a sensible way forward that respects the legislation and which is fair to both landlord and tenant. We have the time to do this, and hope that landlords and tenants will work together on this in the same cooperative way they have on other shared challenges.