What options do you have when ending your secure agricultural tenancies?
If you are a secure tenant farmer with a tenancy under the Agricultural Holdings (Scotland) Act 1991 and are considering听ending听your tenancy, there are several options available to help you plan your next steps and maximise the value of your tenancy.听
Farmers who no longer wish to continue farming and or do not have a successor need to surrender their tenancy.听The Land Reform (Scotland) Act 2016 introduced the right for tenants to relinquish and assign their agricultural tenancies and sets out the steps听required听to do so.听
Future planning听
Before having any conversations with third parties, try and get a plan together as to how you wish to exit your tenancy. Do you have a date you would like to retire by?听How will that fit in with cropping or livestock systems?听
How are you set for a property to move to? Housing, depending听on听where you are听in Scotland, can take months to complete so are you in a position now to buy?听Or do听you intend to rent long-term?听You also need funds to live off, so a budget would be useful when assessing if the value of the tenancy will meet your future needs.听听
There is also the cost of agent and solicitor fees to factor into any decisions. And an important note is that ending a tenancy process has time restrictions, so any major life plans are better discussed before starting the process when there is less pressure on you and your family.听It is also recommended to have a discussion with your accountant to understand any tax implication or obligations that may arise from听future plans.听听
Relinquishment听听
The first route听available to a secure tenant听is the relinquishment of the tenancy.听Providing the tenant has not already been served听a Notice to Quit from the landlord or has failed to听comply with听some or听all of听the provisions of the lease,听they can听relinquish the tenancy.听听This is when the tenant offers the tenancy back to the landlord for a compensatory payment.听If you are considering this, then your first port of call should be appointing a skilled land agent to navigate you through the process.听There is a set procedure, involving serving notices and appointing an independent valuer.听How the tenancy is valued is set out fully in the 2016 Act.鈥疘t鈥檚听worth noting that the tenant听is responsible for听meeting the cost of the valuation.听Guidance on this route can be听sought听on at the 听has published Codes of Practice.
This route can have its issues though, the landlord may not wish to buy back the tenancy, which will then require you to pursue a different听option. Also,听the valuation has a set formula, differing to a market valuation, so understanding that improvements but also dilapidations will be accounted听for. This can prove challenging when a property may听be required听to be听purchased听if moving out of the tenanted farm.听听
Assignation听
If your landlord is not in a position to buy back the tenancy听or the landlord rejects the valuation or withdraws their acceptance,听then your second option听as the tenant听is to consider听assignation听where the tenant instead either assigns the lease to 鈥榥ew entrant鈥� or 鈥榮ells鈥� their lease to a 鈥榩rogressing farmer鈥櫶�听
A new entrant is defined in the 2016 Act as being an individual who does not hold or have a 鈥渞elevant interest鈥� in an existing agricultural tenancy and has not done so within the five years听immediately听preceding the assignation. A progressing farmer is defined as an individual who does not hold two or more 鈥渞elevant interests鈥� in agricultural tenancies.鈥疶he tenancy must be assigned within twelve months of the听initial听valuation following the Relinquishment Notice.鈥�听
If you听don鈥檛听have a someone potentially in mind,听that would wish to take on the tenancy, you can approach an agency to market the tenancy for you.听You will also听need听to instruct a Solicitor, preferably one with experience in agricultural tenancies.听听
The advantage of this route is that there is no specific legislation to restrict the sale value of the tenancy, so in theory you could make more of a financial gain compared to听relinquishment.听听
The value at which the tenancy can be sold to a new entrant or progressing farmer is not specified in legislation, so in theory, this听allows for greater financial gain compared to relinquishment, although this is a matter of听negotiation between the incoming and outgoing tenants.听
There are various challenges associated with this however as听there are听not many听financial lenders prepared to risk on agricultural tenancies听therefore听anyone considering buying a tenancy needs to have capital behind them to be in an eligible position.听
The right to relinquish and assign the tenancy can be seen as an opportunity for retirement, while also paving the way听for younger entrants听into the farming industry.听If you are considering a relinquishment or assignation of tenancy or have听any questions about agricultural tenancies, it is important to seek听appropriate advice听before starting the process of relinquishment and assignation.听听听
Five top tips听
- Start with a conversation with your landlord or factor to gauge if relinquishment听is听an option.听听
- Engage with a qualified land agent to review your options.听
- Prepare for the future 鈥� housing and pension needs.听
- Be aware of听time frames听once notices are served.听听
- Try and keep communication lines open with all parties for a smoother transition.听
Jennifer Galloway, Senior Consultant,听Jennifer.Galloway@sac.co.uk
Posted by SAC Consulting on 17/08/2026
