Say no to farm rent rises

Michaelmas, which falls on 29 September, is a traditional date for farm rents to be reviewed in most cases following rent review notices served at least 12 months previously. A rent review can conclude in one of three ways – a reduction, an increase or a standstill. The outcome depends on the parties either agreeing the level of rent or having it determined by arbitration which has become a very expensive way in which to resolve the dispute costing many times the amount of difference between the parties.

TFA Chief Executive George Dunn said “We are beginning to see an alarming number of cases where landlords are seeking to raise farm rents particularly on tenancies let as Farm Business Tenancies (FBTs) which have open market rent formulas. Too often we see existing operators taking on additional land on FBTs at exorbitant levels of rent with apparent scant regard for the economics involved and landlords are choosing to use these rent levels as comparables for existing situations. Landlords need to realise these levels of rent are unsustainable and in order to preserve good landlord/tenant relationships, which ensure that tenants are able to pay rent and make a profit whilst farming in sympathy with the land, pursuing these increases must stop”.

“There is so much uncertainty at the moment, not least in relation to Brexit. Both landlords and tenants would be better off in agreeing sufficiently long enough tenancy terms building in rent reviews after Brexit in order to adjust matters in a more certain environment in relation to trade, Government policy, regulation and access to labour. What we really need at this time is an element of stability to be available when all else seems to be at sea,” said Mr Dunn.

“Rather than spending tens of thousands of pounds in professional fees in arguing over the level of rent, it would be better if landlords and tenants sat down to agree a longer term strategy which incorporates Brexit at rent levels which give both a return to the landlord and the ability for the tenant to make a reasonable living from farming the land”, said Mr Dunn.