News Release an Behalf of NFU Scotland, Scottish Land & Estates and Scottish Tenant Farmers Association
NFUS, SL&E and STFA’s rent review initiative ready to deal with potential cases
The three main membership organisations representing landowners and tenants in Scotland said today the industry-led rent review initiative, launched in late July, will be ready to deal with any cases that may arise before November’s rent review term date.
NFU Scotland (NFUS), Scottish Land & Estates (SL&E) and Scottish Tenant Farmers’ Association (STFA) have each put forward a representative to sit on a review panel to examine rent review cases where an agreement cannot be reached and assess whether proposed changes to rent pass a ‘reasonableness test’.
The initiative from the three organisations is voluntary but is intended to ensure stability until any emerging recommendations on legislative changes from the Agricultural Holdings Legislation Review Group (AHLRG) can be implemented.
The initiative followed a number of rent determinations in the Land Court which has given rise to some uncertainty about future rent levels. Believing that predictability about future rent levels for tenanted farms is fundamental to a healthy rented sector within Scottish agriculture, the industry bodies want to create the conditions to allow landowners and tenants to plan and invest with a degree of confidence.
On process, rent reviews should continue to be carried out as normal. However, where parties are unable to agree, they are strongly advised to refer to the panel as soon as they can.
The organisations believe that, in the absence of exceptional factors, rent adjustments – whether requested by a landowner or proposed by a tenant - should broadly be aligned with inflation as measured by the Consumer Price Index (CPI) and should reflect changes in the CPI index since the last formally recorded rent review. In cases of long overdue rent reviews additional guidelines have been agreed to ensure that rent increases are implemented in a series of reasonable steps.
Anyone wishing to approach the panel for a view on their particular case should do so through one of the three representative bodies by calling:
NFU Scotland – 0131 472 4000
STFA - 01408 633 275
SL&E - 0131 653 5400
The panel process will be overseen by an independent third party.
Nigel Miller, President of NFU Scotland said:
“The Review panel is a new approach; it provides a real objective sense check as a safety net for either a tenant or a landowner who feels that the rent review process has failed or gone off track.
“The Panel is a simple low cost process that can deliver a rapid ruling based on transparent codes of practice. The process has no basis in law, its power flows from the consensus that forged agreed standards. That consensus means that the three key stakeholders have representatives embedded in the panel under the chairmanship of Andrew Thin.
“It is vital for all of us that this initiative of self-regulation is given space to change the rent review culture. The panel can steer negotiation away from conflict and provide the stability and balance needed by all involved in the tenanted sector.”
David Johnstone, Chairman of SL&E, said: “We recognise that some have concerns about rent reviews and so SL&E has been keen to be part of this initiative that goes some way in dealing with those concerns. Farm rents are, in general, good value and we hope that this initiative will provide a degree of stability for the industry while the Review Group considers the issues in the sector and brings forward its recommendations.
“Rent reviews should continue as normal and the panel is not there to set any artificial rent level, but I would stress that while the initiative is voluntary I would encourage all involved to acknowledge the spirit of the initiative. Our goal is to provide a period of calm so that we can address the issues in the sector in a constructive way.
STFA Chairman Christopher Nicholson said:
“This industry led initiative is a unique measure aimed at resolving the growing uncertainties surrounding rent reviews. It is a voluntary process which has been put in place until new legislation can be enacted and its success will be a test of the resolve of all those involved with rent reviews including tenants, landlords, and their professional advisers.
“Tenants and landlords should familiarise themselves with this joint initiative and related codes of practice. If either party believes that a rent review is not being conducted within the guidelines then the Review Panel provides a cheap and easily accessible complaint procedure capable of arriving at a quick decision.”