Time to plan for autumn farm rent reviews
Farm tenants need to plan ahead for tackling autumn farm rent reviews, the Tenant Farmers Association (TFA) is warning.
Traditionally, autumn is a key time for reviews as it was often the season within which agricultural tenancies started and finished. Reviews tend to take place on the anniversary of lettings.
TFA chief executive George Dunn said: “This autumn, we are expecting no general trend in the direction of farm rent reviews.
“Determining factors will be all about the individual circumstances of each case. For example, in situations where a farm rent has not been reviewed for a considerable length of time, an increase may be justified.
Whereas, a rent more recently changed in an upwards direction might now be ripe for a reduction. Tenants with a live rent review notice should take advice about the way ahead.
For a rent review to take place, it is mostly the case that either the landlord or the tenant serves notice to trigger the review at least 12 months before the anniversary of the tenancy.
“Where tenants have served notices, hoping for reductions, they will need to consider making their case to their landlords, justified with budgetary evidence and information about rents being paid by other tenants on comparable holdings.
“Equally, tenants should expect to hear from their landlords who have served notices about how they might justify an increase. It is also possible for the recipient of the notice to use it to argue for a rent change despite who served it in the first place,” said Dunn.
Where a rent level cannot be agreed at review there is the option of referring the matter to arbitration however, this is a rare occurrence.
“Tenants must not feel pressured to settle rents at unsustainable levels. We often see situations where landlords use the threat of applying for an arbitrator’s appointment as a way of forcing a tenant to agree to a level of rent which is too high, particularly when they are close to the rent review date.
The application for an arbitrator does not mean that arbitration will take place; it merely extends the time available for negotiation.
“Autumn rent reviews come at a very busy time of the year. It is easy to feel rushed into making a hasty decision, but I would urge all farm tenants to take advice from the TFA on any negotiations taking place,” said Dunn.