Land reform legislation is starting to take shape

The Land Reform (Scotland) Bill, aimed at reforming the law relating to ‘large landholdings’ and leases of rural land, has progressed to its final stage in the Scottish Parliament, following significant amendments during the Stage 2 process.

Over 500 amendments were submitted by MSPs from both sides of the debate and considered by the Net Zero, Energy and Transport Committee. The resulting Stage 2 Bill includes notable changes, particularly concerning large landholdings.

A “large landholding” was previously defined as an area of land under the same or connected ownership exceeding 3,000 hectares with special rules for islands (for land management plans) or exceeding 1,000 hectares (for sale restrictions). The Stage 2 Bill makes this threshold consistent across the Bill so it applies to an area of land within the same or connected ownership exceeding 1,000 hectares and removing any distinction for islands. An important change states that when calculating total land size, any land within 250 metres of other land under the same or connected ownership is taken into account.

Rona Macdonald is a Professional Support Lawyer, Turcan Connell

Under the Bill, Scottish ministers will be empowered to make regulations requiring landowners to produce and publicly share land management plans.

The list of those who can report alleged breaches of these regulations has been expanded in the Stage 2 Bill, and maximum fines for non-compliance raised from £5,000 to £40,000. The Stage 2 Bill also gives the new Land and Communities Commissioner (who will be a member of the Scottish Land Commission) greater powers for investigation and enforcement.

The Bill introduces two major restrictions on the sale of large landholdings:

Prohibition on Sales Without Notification: Initially, the Bill proposed a ban on the sale of any part of a large landholding without prior notification to Scottish ministers, regardless of the size of the land parcel. This sparked criticism for potentially blocking small-scale sales. The Stage 2 Bill now permits partial land sales without ministerial notification, provided the area falls below a threshold to be set by ministers through further regulations.

Prohibition on Sales Without a Lotting Decision: A more controversial part of the Bill is the requirement for the owner of a large landholding to obtain a “lotting decision” from Scottish ministers before selling their land. Ministers must determine whether the land should be divided into lots, based on a community sustainability test. Initially criticised for lacking a time limit, the Stage 2 Bill now requires ministers to make a decision within six months. However, it does not say what happens if that deadline is missed, potentially limiting its impact.

Ministers will be required to publish guidance explaining how they will make lotting decisions and how these are expected to work in practice.

Few amendments were made at Stage 2 to the part of the Bill relating to agricultural tenancies and some elements (for example, tenant improvements, right to buy process and resumption compensation) may be reviewed more closely at Stage 3.

The Bill has now reached its third and final stage, and MSPs can submit further amendments before the Scottish Parliament votes on the final version. The timetable for this final stage has not yet been announced and with Parliament in recess until 31 August, there will be no progress before then.

Further changes are expected, and if the Bill is passed, secondary legislation will be required to implement several elements. Transitional provisions are also anticipated to ease the shift to the new framework.

Rona Macdonald is a Professional Support Lawyer, Turcan Connell