Discussion is key to positive rent agreement
There is much talk about the traditional landlord and tenant relationship in the tenanted farm sector.
Typically it seems to be negative stories which are promoted in the press.
In truth, the vast majority of landlords and tenants conduct their business with the benefit of a positive and forward thinking relationship, resulting in a satisfactory outcome for all. By way of example, of the rent reviews I am aware of this year that have increased the rent payable for a farm or land, the vast majority have been agreed positively, most having involved some form of investment, or similar deal, between the parties.
The positive working relationship benefits from the ability of the parties to understand that both landlord and tenant have businesses to run; hopefully commercially sound and profitable.
A landlord seeking a perceived high rent may be doing so to fund needed repairs, developments or similar; likewise a farmer may wish to defer a rental increase due to the need for investment into the holding to facilitate growth, economy, expansion and profitability.
It is by entering into a dialogue to discuss and understand the requirements, needs and proposals of the respective businesses that the parties may benefit from each other.
In recent dealings for a commercial landlord it was demonstrated that the shrewd and savvy farmers welcome the investment that is only possible from higher levels of rent and equally the commercially astute landlord welcomes the capital investment and proposals from the proactive farmer.
Current facts include costs rising, difficult harvests, openings for niche markets, increased mechanisation and efficiency, renewable technologies and the need to farm with an increasing regard for the environment.
It is the farmers and landowners who wish to work together who benefit most from the increasingly diverse ways to promote their respective businesses and prosper in today's market.
Andrew Liddiment, Balfours Property Professionals
