A Consultation has been published by the Scottish Government on reform to the Law on Long Leases in Scotland. Historically, landowners in certain parts of Scotland created Long Leases, sometimes for 999 years, and the Scottish Government, following recommendations from the Scottish Law Commission in 2006, considers that these long leases amount to virtual ownership and that conversion will simplify property law.
This may affect rural and agricultural clients in the context of leases of land for forestry purposes, golf courses, holiday accommodation or recreation, for example. If this Bill proceeds through Parliament, it will automatically convert the tenant’s interest in a long lease of property to outright ownership. The landlord will be deprived of ownership and will receive a compensation payment. It will be possible for the tenant to opt out of the conversion, in which case the lease will continue. The law will not apply to mineral leases and provision is made for registration to preserve sporting rights.
Long leases are defined as a registered or recorded lease that, on the “Appointed Day” was originally granted for at least 175 years (and this will include a lease for a shorter period but where there is an obligation on the landlord to renew the lease, the total term being more than 175 years) and has at least 100 years to run. Anti avoidance provisions will be introduced to prevent the termination of the long lease by irritancy/forfeiture, even if termination proceedings have commenced.