Scottish Land & Estates announced today it has proposed cross-industry talks on rent reviews in an effort to get agreement on one of the most important issues for the tenant farming sector.
The organisation said it had re-visited its position on rent reviews in view of ‘the weight of alternative opinion’ on the issue.
It is now proposing cross-industry discussions which would consider the introduction of productive capacity of a farm as a factor in determining rent levels.
Scottish Land & Estates has put forward the proposal in a second submission to the Agricultural Holdings Review Group.
David Johnstone, Chairman of Scottish Land & Estates, said: “We supported the conclusions of the independent Rent Review Working Group and do not believe that the legislation, as amended, requires major overhauling. However, this issue continues to cause great concern to tenant farmers and we are committed to seeking cross-industry agreement on key issues.
“Scottish Land & Estates would therefore support moves to review section 13 with a view to looking at whether incorporating the productive capacity of the holding as a factor would improve the position and allay concerns about rent review procedures, but we would wish to ensure that comparable evidence (including adjusted LDT rents) is also retained. We also think it appropriate a review addresses investment by landlords in new fixed equipment.
“While the concerns voiced after the Moonzie judgement about vastly inflated 1991 Act rents have not materialised, there appears to be a very real residual anxiety that the legislation now facilitates 1991 Act rents increasing to a rate which is beyond what is affordable for the unit. We remain of the view that this is not what the Moonzie judgement envisaged and this is coupled with the fact that it is not in a Landlord’s interests to seek a rent which would render the unit unviable. However, we acknowledge that there is now a perception that section 13, as interpreted in Moonzie, is a problem and this should therefore be addressed.
“While Scottish Land & Estates is keen to find those areas where cross-industry agreement can be reached, our organisation is also keen that any changes to the current regime do not create new areas of friction between tenants and landowners.
“We accept that most other stakeholders want to see a change and the introduction of greater weighting to the productive capacity of the holding. We are not anti-change and want to make sure that any changes do actually make things better.
“To take this forward Scottish Land and Estates is keen to discuss the detail with NFUS and STFA. We would also want to include RICS in such dialogue as on many occasions it will be their members who will be conducting reviews and applying the legislation in practice.”
Scottish Land & Estates has also identified other areas for discussion with NFUS and STFA, including compensation at waygo and the establishment of an industry ombudsman.