Following the publication of the Rent Review Working Group report prior to Christmas, the Scottish Land Court has published a Guidance Note on Rent Reviews. The note can be found here: http://www.scottish-land-court.org.uk/rent-reviews.html
Scottish Land & Estates fully supports the sentiment that settlement by negotiation is always preferable to having to resort to expensive litigation and welcomes the guidance that the note provides.
The main points made by the court are:
- While the land Court is an expert court familiar with agricultural matters and valuation principles and can be expected to have a good understanding of the evidence put before it, the members of the court are not experts in current values and cannot simply use their experience to fix a rent. Parties should be in no doubt that they have to make their decisions on disputed matters on the basis of the evidence put before them and not on the basis of any impressions of their own.
- The court strongly encourages negotiation by the parties, both before and after the application is made, with a view to reaching as much agreement as is possible and will freeze an application to allow discussions to proceed.
- Both parties will be required: to co-operate with the court at all times; when it is clear that settlement is impossible, to disclose their cases fully, without delay; to spell out clearly all matters relative to the dispute and their relevance; to lead any evidence relied on to demonstrate what the open market rent should be and to show what adjustment or modification is required to that figure to allow for scarcity.
- The applicant should set out his contentions in sufficient detail to enable the respondent to understand the basis for the rent which the applicant seeks.
- The court’s objective is to ensure that the respondent can answer the applicant’s case fully, contention by contention, in his first response, with a view to restricting the need for adjustment (if at all) after the hearing is fixed.
- No attempt is made by the court to lay down rules as to what materials the parties are expected to provide and it is left to the parties to decide what evidence to present. But, as a general guide, the court will normally expect to be provided with the following, in respect of both the holding itself and any comparables which are relied on, namely:-
- Description of the land – areas and categories of land together with comment on stocking and cropping capacities.
- Aspects of the lease relevant to the rent, including details of any Post Lease Agreement and other conditions. This should include obligations relating to the use of the holding and how responsibility for maintenance etc of fixed equipment is allocated.
- Details of the fixed equipment provided by the landlord.
- Details of tenant’s improvements (on which the tenant will not normally be rented).
- Details of any particular advantages or disadvantages which the various farms have and how these might bear on the rent.