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					Frequently Asked Questions
For New Community Growing Groups


Part Five: Leases (Scotland)


Introduction
Please Note – Leases and associated law varies throughout the UK. This document applies to
Scotland. There is also a version for England available from CLAS and we hope to have versions
for Wales and Northern Ireland in the future.

The overall aim of this pack of FAQs is to provide general advice to new community groups on
frequently raised issues relating to finding, securing and sustaining land for formal and informal
amenity open space, gardening and food growing. For ease of reference, the term ‘community
garden’ will be used as a generic terms for these activities. This is the fifth in a series of five FAQs
for New Community Groups – see the end of this document for further details.



Q: How do we get a legal right to use land we don’t own or agree a legal right for a community
group to use my land?
A: There are two options available – to buy/sell the land or to lease the land.

Advantages/Disadvantages of buying/selling the land. The advantage of a purchase of the land
for the community group is to give the community control of it, securing it for the future leading
to greater financial self-sufficiency and opening up new avenues of funding.

However it is important to take legal advice on a sale/purchase (see below for finding a lawyer).
For the landowner, although the future benefit of owning the land and any income from it is lost,
they do not have the burden of managing a tenant nor any legal issues arising from the
ownership of land such as the Health and Safety and risk management arising from the SOAC
(Scottish Outdoor Access Code).

If the land is not available for sale then consider a lease which will allow both owner and user to
agree and record the details of how a site is to be used.


Q: Can I just go ahead and use land or let a community group use my land without a formal
legal right to do so?
A: Yes, you can but there are risks in doing so. It would be more difficult for the landowner to
control how land is used, to regulate any development and to recover any costs for damages.




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A tenant might invest time and money and find the owner able to remove them from the site
whilst also being unable to attract funding. Neither party would be protected.


Q: What is a lease?
A: A lease is an agreement between the landowner, usually called a Landlord, and the user,
usually called the Tenant, which allows for exclusive use of a site for a specified period of time in
return for a specified amount of rent.

This agreement can also include many other terms and conditions (such as access, uses,
permitted development or change etc.) and often does but these are the legal basics which must
be present for a lease to exist. Note that they do not have to be in writing, though it is usual and
preferable for a lease to be in writing.


Q: What are the advantages of having a lease for a community group or a landowner? Are
there any disadvantages?
A: A lease protects both the landowner and the tenant, or tenant, by setting out their
responsibilities and benefits clearly. Both parties can rely in law on the agreement contracted by
the other party. In other words, a landowner can rely, amongst other things, on getting the rent,
on getting the land looked after as agreed, on getting the land back when specified and can take
court action to ensure this happens or the lease is ended.

Similarly, a tenant can rely on getting sole and uninterrupted use of the land for the length of
time agreed and can take court action to ensure this happens or that the lease, and their liability
to pay, is ended. The only disadvantage is the potential cost of getting the lease formalised but it
is important to recognise that in paying a lawyer to do this, all the choices, rights and
responsibilities will be explained to you and your lawyer will act to protect your best interests.

There are some aspects of the law which will apply to a landlord and a tenant which are not
obvious from a lease and the effect of which can be influenced by the content of the lease;
taking legal advice allows you to make choices and to be aware of the consequences of those
choices.


Q: Are there different types of leases?
A: Essentially, no. In Scotland a lease is just a contract and it says what the parties agree to say.
There are many different elements that may be included in a lease and these relate to the
complexity of the project and what is included– thus a simple, straightforward rental of ground
to grow on will be covered by a shorter and less complicated lease than a development site with
many buildings.

Therefore different leases will include different provisions and are sometimes referred to by
different names reflecting this, for example if there is a building included in the lease, there will
be a whole section on the repair and maintenance of that building and such a lease might be
called a Full Repairing and Insuring (FRI) lease or an Internal Repairing lease (IR). However, in
reality it is up to the parties to agree on what is to be included and that is not limited by any
general classification of lease names. See below for more on FRI leases.


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Q: Where can I get a lease?
A: A draft form of lease for land is available on this website. This may be used as a template for
beginning negotiations and to optimise the effort and cost of employing a lawyer. It will not
cover every eventuality and legal advice should be taken before it is signed as it will form a
binding contract.


Q: Do I need legal help?
A: Yes. If you enter into a contract, you will be bound by the terms of that contract and to any
relevant legislation relating to it, ignorance of which will not remove your liability. There are
financial and legal implications resulting from signing any contract. A lawyer will explain all the
rights and responsibilities that go with any contract you are considering: you will not be able to
avoid those responsibilities by saying you are not aware of them. Community groups or small
landowners may have concerns about the cost of legal advice but the possibilities for things to go
wrong have cost implications too. See below for how to find and instruct a lawyer.


Q: How do I find a lawyer?
A: See http://www.lawsociety.org.uk/choosingandusing/findasolicitor.law Ask around and see if
anyone you know has a recommendation.


Q: How do I instruct a lawyer?
A: Most lawyers will give you a free initial consultation by telephone to find out the scope of the
job; use that to check what details you will need to send, how much they will charge for what
work and when they can do the work. You will need to give them clear and concise details of who
you are, what you want done and what has been discussed or agreed already.
A plan, copies of any correspondence and your constitution if applicable together with your
contact details will be required. You should receive written Terms of Engagement which set out
in detail what is to be done and how much it will cost.


Q: What might it cost to get a lease?
A: Legal fees vary from company to company and there are also other fees. These include fees
for searches to check ownership of the land, for registration of a lease in the books of Council
and Session to ensure it can be enforced, for Stamp Duty Land Tax if it is applicable (unlikely as
the value of the lease must currently be over £10 000 for this to apply but it is possible) and for
any additional outgoings such as having a plan made, copying and getting extracts from the
books of Council and Session.

It is usual also for the Landlords reasonable legal costs to be borne by the tenant, though you
should seek to cap this at a sum to be agreed in advance. The cost of not putting a formal lease in
place for a community group, however, could be the loss of everything on the site and the
potential to be sued by the landowner for damages for which members of a community group
could be personally liable.

As a landowner the cost of having no formal lease could be in the cost of court action to enforce
the removal of an occupier and action for damages to ensure restoration of the site, all of which
takes time and may prevent other plans going ahead.

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To agree and to formalise the use of land is always preferable. There may be grants available to
help in this process.


Q: What needs to be included in a lease?
A: The minimum in Scotland for an agreement to be a lease is: a date of beginning and length for
the lease and a monetary rent to be stated. There are several other things which are helpful to
include and which ease the relationship between owner and user and these cover things like
insurance, maintenance of any buildings, access, uses, changes to the lease, management of the
land etc.

You should include only those items which are necessary for your particular group and site. A
lawyer will advise you which items are necessary but a template lease, together with some
Heads of Terms (a list of the main items to agree between landowner and tenant) has been
developed which will help you to begin to consider your requirements. You may download these
here and use them to negotiate the terms of your agreement and as a basis for instructing your
lawyer.


Q: I have heard of a licence or a licence to occupy. What is that?
A: It is an English term and does not apply directly in Scotland. Any agreement which has the
three elements of start date, length of agreement and rent in Scotland is treated as a lease in
law. Calling an agreement a Licence gives no special effect or advantage in Scotland, though it is
possible to use that name.


Q: I have heard of a meanwhile lease. What is that?
A: It has no special legal standing but is a commonly used phrase referring to the use of
something “in the meanwhile.” A common example would be a short-term let of land from an
owner seeking planning consent for a development and in the meanwhile allowing some other
use by means of a lease of the site.

By implication, therefore, if you offer, or are offered a “Meanwhile” lease or agreement, there is
a definite intention that the arrangement is not going to continue for long and this will be
reflected in the terms and conditions of the lease.


Q: I have heard of Landshare. What is that?
A: Landshare is a web-based initiative that aims to connect those who have land to share with
those who need land for cultivating food. It was launched in 2009 and has an extensive website
with resources to download. Note the emphasis is on the shared use of land and not exclusive
use.


Q: I have heard of an FRI lease. What is that?
A: FRI stands for Full Repairing and Insuring. It relates to a lease of a building and is simply a
colloquial name for a lease typically containing clauses which require the tenant to fully repair
and insure the premises for the length of the lease and it is usual to find this sort of obligation on

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a long lease, say 15 years plus. There are other conditions relating to the length of an agreement
which would also be included.


Q: I have heard of an IR lease. What is that?
A: IR stands for Internal Repairs. Again, it relates to lease of a building and is a colloquial name
for a lease where a tenant is to make internal repairs only and would usually be found where the
length of the lease is shorter, say 5 years or less. There are other conditions relating to the length
of the lease which would also be included.


Q: There are lots of specialised words in the lease which I don’t understand. Where can I find
out what they mean?
A: CLAS plans to create a “Jargon-buster” page on its website to help with this. In the meantime
you can specific legal advice to ensure you know the implications for you.


Q: Can the tenant stay on after a lease ends?
A: With the exception of the Tenancy of Shops legislation, there are no statutory rights of lease
renewal in Scotland. (This legislation permits the tenant of a shop to secure a court order for a
one year extension of a lease following on service of a notice to quit by the landlord and does not
apply to the lease of ground for growing).

Note that if neither party to any commercial lease, including a lease of land for growing, sends
the other a formal notice to quit before the end of the lease, it will continue for a maximum of
one year, and from year to year after that. This is a principle known as “tacit relocation.”

To prevent the operation of tacit relocation and ensure a lease ends at the date stated, a notice
must be sent from either the landlord to the tenant or vice versa giving 40 days’ notice of the
end of the lease. It must be served even if no such notice is required in the lease and even if such
a notice is specifically excluded under the lease. So, there is no right to renew a lease but by
omitting to send a notice to quit, the lease may be allowed to continue in operation.


Q: Who should sign a lease?
A: The lease should be signed by a legally empowered representative of both the landlord and
the tenant. Who is legally empowered to sign will depend on whether the parties are individuals,
community groups with a constitution, limited companies etc. and you should seek legal advice
to ensure the correct persons sign the agreement. The signatures may require to be witnessed in
certain circumstances.


Q: I have heard of Registration of a lease. What is that and do I need to do it?
A: If the lease is for more than 20 years the lease must be registered in the property register in
order for the tenant to obtain a “real right” enforceable against third parties. This right is
enforceable even if the tenant does not take possession of the premises.

If the lease is no longer than 20 years it is not capable of registration and the tenant must have
taken possession of the premises to obtain a “real right” enforceable against third parties.

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Q: What if the community group stops or falls apart? Can a lease be ended early?
A: If both parties to the lease, the landlord and the tenant, agree, then the lease can be amended
in any way including early termination. However, only if a right to serve notice of termination
early is included in the lease is there any right to end it without the agreement of the other
party.

If no such provision is included then the tenant has the right to continue to occupy the site and
the obligation to continue to pay the rent and perform the other obligations specified in the
lease. The landlord has the right to continue to receive the rent and the obligation to continue
to allow the tenant sole and uninterrupted use of the land.

If either party fails to perform some significant obligation eg failure to pay rent or failure to
provide uninterrupted use of the site, then the other party can take legal action to seek to end
the lease.


Q: Can the landowner visit the site?
A: A lease typically provides the landlord a reasonable right of entry to his land in order to
inspect it or, just before the end of the lease, to arrange advertising. However, such a right of
entry should be done reasonably with due notice and care and any damage to the tenant’s goods
should be compensated for.


Q: Can the landowner raise the rent?
A: Only if there is provision in the lease for the rent to be reviewed can the rent stated be
changed. If there is no provision for review of the rent, both parties could agree to a change of
rent if they chose to do so.

Typically a lease for more than three years would make provision for the rent to be reviewed:
some leases specify that such a review may be upwards only, some make provision for
determining how the rent is to be set and that it is to be reviewed on a regular date (once every
5 years on the anniversary of the date of entry, for example.

In longer, more complex leases, usually but not only involving buildings, there will be significant
clauses detailing what may and may not be taken into account in the review of rent. If a tenant
intends to improve the site, legal advice must be taken to ensure these improvements are
treated correctly for the purposes of any review of rent.


Q: Can the landowner throw a tenant off the site?
A: Not unless the tenant has committed a “material breach” of the terms of the lease. The
purpose of a lease is, amongst other things, to give a tenant protection and a right to the
uninterrupted use of the site. If, however, the tenant fails to perform an obligation, such as
failure to carry out agreed works or failure to pay the rent, this may be a material breach of the
terms of the lease and the landlord could seek to end the lease and remove the tenant.



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Alternatively, it is possible to agree to insert a provision for the early ending of a lease into the
agreement and to specify dates or reasons which allow this. Such a clause can be in favour of
one or both parties.


Q: Does having a lease mean no other permissions to use the land are necessary?
A: No, various other permissions will be required depending on the use of the site. A lease will
typically oblige the tenant to be responsible for obtaining any necessary permissions for their use
of the site. The landlords consent is to the use stated in the lease.

A tenant needs to check whether, amongst other things, any planning consent, building
regulations, employment, insurance and local bye-law or statutory permissions may be required.
Any change in the use of the site may mean additional or repeat consents will be required.


Q: What if the tenant can’t pay the rent?
A: Non-payment of the rent would be a material breach of the lease and the landlord could take
action to a) recover the money due and, b) take the land back and end the lease. Taking/offering
a financial reference before letting land will help to build confidence for both landlord and
tenant.


Q: The site use was agreed when the lease started but now the tenant wants to do other things
too. Can the tenant just go ahead?
A: No, the landlord has consented only to the use specified in the lease. Landlords consent must
be obtained to any changes or this could be a material breach of the terms of the lease and
potentially cause the landlord to end the lease early. Other consents may also be required. A
change of use may have an effect on any rental charge. A landlord is not obliged to consent to
any change in the terms of a lease including a proposed change of use.


Q: We want to change the length of the lease/ rent/ use of the land or other item detailed in
the lease. How do we do that?
A: The formal answer is by the agreement of both parties to signing a Minute of Variation of
Lease. Practically speaking, unless the existing lease provides an option for changes, both parties
must agree to any proposed change.

Neither party has a right to change anything. If both landlord and tenant agree, the details can
be added onto an “extra” page or pages of the lease called a Minute of Variation. Approach the
other party and discuss the change you want, remembering they may want something in return
for agreeing to your proposal.


Q: The tenant wants to build on the site. Can we/ they do that?
A: If the lease provides for building works and all the relevant statutory permissions are
achieved, yes. If this was envisaged at the beginning then the lease should also allow for the
building to be completed to a certain standard and for what happens to the building at any rent
review and/or at the end of the lease.


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If the lease does not provide for building works then the tenant must ask for the landlords
consent. The landlord is not bound to give such a consent but if they do, may attach certain
conditions to it and the matters of what happens at a rent review and at the end of the lease will
again need to be addressed.

You may need planning permission, building control or other consent for the building works or
other changes to the land.


Q: The tenant wants to change something on the land, such as the access, drainage, fencing
etc. Can they/we do that?
A: See the question on wanting to build on site above.


Q: The lease does not say anything about it but an existing, new law or change in the law or
local regulations affects something the tenant does. Is the lease the only thing which regulates
the use of the land?
A: No, the tenant is obliged, as we all are, to operate within the law and to find out what
regulations apply to any activity they carry out. Typically a lease will contain a provision for the
tenant to be responsible for complying with all local and national legislation, existing and future,
which may relate to their occupation and use of the site, whether the actual use is specified or
not. Even if it does not have such a provision, the tenant must comply with the law.


Q: The landlord/tenant wants to raise money and has asked the bank for a loan. Can the
land/lease be used as a surety against a loan?
A: No for the tenant and maybe yes, under certain circumstances, for the landlord. The tenant
has no rights of ownership under a lease so they could not use their occupation under the lease
as security against any borrowing (unless their lease of the site provides them with some income
which goes directly to the tenant.


Q: The tenant wants to pass the lease on to another group to occupy the whole site. Can they
do that?
A: Only if specific provision was included in the lease for the transfer or “assignation” of the
lease, may the tenant do so. Even then it is likely such a provision would require landlords
consent. If no such provision is included, then the tenant would have to get landlords consent for
the idea in principle and the specific group involved.

It is usual for a landlord to require financial and character references for the new group and for
any legal/admin fees involved in documenting the change to be paid by the tenant.


Q: The landowner wants to sell the land. Can they do that?
A: Yes, but subject to the tenancy. In effect, the name of the landlord would change but the
rights of the tenant under the lease would not change.




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Q: The tenant wants to sub-let part of the site to another group. Can they do that?
A: Only if specific provision was included in the lease for sub-letting under the lease, may the
tenant do so. Even then it is likely such a provision would require landlords consent. If no such
provision is included, then the tenant would have to get landlords consent for the idea in
principle and the specific group involved.

It is usual for a landlord to require financial and character references for the new group and for
any legal/admin fees involved in documenting the change to be paid by the tenant.




Further Information

Other FAQs for New Community Groups

This document is the fifth in a series of five FAQs for new community growing groups, which are
split as follows:

    1.   Introduction, Background and Benefits (Version 1, March 2012)
    2.   Hints and Tips on Finding Land (Version 1, March 2012)
    3.   Costs (Version 1, March 2012)
    4.   Permissions & controls (Version 1, March 2012)
    5.   Leases (Version 1, March 2012)

To read other FAQs, and find other information on community land issues, please visit
www.communitylandadvice.org.uk




Feedback: We are keen to get your feedback on this and any of our FAQs. Whether you found the advice useful or
think there are questions to be added, please spare a few moments to help us improve our services by calling your
local CLAS advisor or using the feedback form at: www.communitylandadvice.org.uk



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