Under the provisions of the Land Reform (Scotland) Act 2016, the new style of tenancy known as the Modern Limited Duration Tenancy (MLDT) came into effect on 30 November 2017, replacing the Limited Duration Tenancy (LDT).

Since 30 November 2017 it has no longer been possible to grant a new LDT, however, the Short Limited Duration Tenancy (SLDT), introduced under the 2003 Act, remains as an available letting option.

Existing LDTs (granted prior to 30 November 2017) continue unaffected.

Parties can agree to convert existing LDTs and secure 1991 Act tenancies to MLDT by negotiation.

Term

The MLDT has a minimum term of 10 years’ duration.

A landlord and tenant can agree to extend the MLDT in writing. If this does not occur, and it is not termination, the MLDT continues automatically for a period of seven years.

Subletting

An MLDT can be sublet, but only in so far as the lease expressly permits.

Fixed equipment

Parties entering an MLDT must agree a written schedule of fixed equipment specifying the fixed equipment being provided by the landlord, and the condition of this. This must be completed before the expiry of 90 days, beginning with the commencement of the tenancy, and the cost borne equally by the parties, unless otherwise agreed. If it is subsequently varied, a new schedule must be agreed in writing.

Break clause

A key feature of the new MLDT is the introduction of a break clause provision, which can be exercised by either landlord or tenant at year five of the lease. However, this is only possible for tenancies where the tenant is a new entrant. This has recently been defined as person who has not had within the previous five years:

  • An LDT.
  • An MLDT.
  • A 1991 Act tenancy.
  • A small landholding tenancy.
  • A croft.
  • Within the previous three years:

  • An SLDT.
  • Or is a person who owns more than three hectares of land in aggregate.
  • A landlord can only exercise the break option if the tenant is not using the land in accordance with the rules of good husbandry, or is breaching a term of the lease. A ‘new entrant tenant’ may exercise the break option without having to rely on a reason.

    Termination by landlord

    Termination by the landlord will operate under a ‘double-notice’ system. As such, a landlord is required to serve notice of intention to quite not more than three years and not less than two years before the expiry. This is followed by a second notice, not more than two years and not less than one year before the expiry. Failure to serve the dual notices will result in the MLDT continuing for a further seven years.

    Irritancy

    Parties can agree grounds for irritancy, although this cannot be due to non-residency on the part of the tenant, nor can it be due to a breach in husbandry due to conservation activities.

    The landlord must give the tenant one year’s notice to remedy the breach on which he intends to irritate the lease, followed by a further notice two months before the date on which he intends to remove the tenant.

    Termination by the tenant

    Termination by the tenant will operate under a single notice system. This requires service of a notice to quite not more than two years and not less than one year before the expiry of the term of the tenancy.

    A landlord will only be able to exercise the break option if the tenant is not using the land in accordance with the rules of good husbandry, or is breaching the term of the lease. A ‘new entrant tenant’ may exercise the break option without having to rely on a reason.