The Tenant Farmers Association (TFA) is advising all tenant farmers to consider whether they should be pursuing a farm rent review.
Most farm tenancies contain provisions for a rent review that can be used by either landlords or tenants. Michaelmas (29 September or 11 October in certain places), is a key time for farm rent reviews. Whilst rent review activity has been low in recent years, the TFA is suggesting that now is the time for tenant farmers to take the initiative.
With the end of our transition period with the EU looming large, at least in the short term, there could be major disruption in agricultural markets and farm tenants need to be thinking about protecting themselves in that scenario.
TFA Chief Executive, George Dunn, said “Farm tenants are usually understandably nervous about instigating a rent review. In most cases it is landlords who take the initiative. However, serving a formal notice to kickstart the rent review process is a simple procedure which tenants can do for themselves with ease. The TFA is on hand to advise and to provide useful template documentation”.
“The rental position of each farm needs to be looked at and compared with other rents being paid in similar situations to decide whether a rent reduction is a possibility. Landlords are continuing to resist reductions, but we are beginning to see some rent reductions feeding through. This includes a recent arbitration award which provided a rent reduction. In that case, the landlord was advised by a national firm of land agents arguing for a substantial rent increase. Farm tenants must not feel bullied or pressurised into accepting what landlords’ agents argue for,” said Mr Dunn.
“Only a very small proportion of rent reviews end up at arbitration. Arbitration can be an immensely stressful and costly experience. Before serving notices, tenants can take out insurance against the costs of going to arbitration, even when they will serve the notice. Often, having insurance means that landlords settle more quickly and better than they would otherwise have done, knowing that tenants have the means to take reasonable cases all the way if necessary,” said Mr Dunn.
“All farm tenants should consider their position and take advice about how to proceed,” said Mr Dunn.