Industry bodies representing agricultural landlords and tenants from across Scotland have today launched new guidance aimed at encouraging timely fulfilment of obligations by both landlords and tenants.
The move follows the issuing of similar guidance by the NFUS, SLE and STFA in relation to limited partnerships, rent reviews and tenants’ improvements.
The guidance is based on existing legislation, and creates a framework whereby landlords and tenants can agree a planned approach to fulfilling their respective obligations promptly and on a collaborative basis.
It assumes a typical agricultural lease where the landlord is responsible for replacing and renewing worn out assets, and the tenant is responsible for keeping assets in good order through effective maintenance and repair.
In cases where alternative arrangements have been agreed within the lease or through a post lease agreement, the guidance can be adapted to accord with whatever legal arrangement prevails.
The guidance outlines a number of good practice principles that landlords and tenants are expected to adhere to, and recommends a triennial planning cycle for fulfilling obligations so as to align with rent reviews.
The recommended process for negotiation can also be applied retrospectively if past obligations have been left unfulfilled for any reason.
Welcoming the move NFUS President Allan Bowie said –
“This guidance is a welcome step forward. The productivity of Scottish agriculture depends on farmers having access to land and fixed equipment that are in optimal condition, and landlords or tenants who do not fulfil their obligations promptly risk undermining the success of our industry”.
SLE Chairman David Johnstone emphasised his organisation’s support for the guidance –
“Landlords are in the business of providing capital assets so that tenants can use them to generate an income and pay an appropriate level of rent in return. Any slippage in fulfilling obligations by either party could reduce the income generating capacity of these assets to the detriment of both parties”.
STFA Chairman Chris Nicholson also emphasised the theme of productivity on tenanted farms –
“Despite very high levels of innovation and skill in the tenanted sector, productivity and incomes are sometimes held back by a failure to fulfil obligations promptly leading to dilapidated assets. Both parties have a responsibility to address this issue, and the systematic common-sense approach recommended in the guidance will be welcomed by tenants”.
The guidance was prepared with support from the Scottish Government’s Independent Adviser on Tenant Farming, Andrew Thin. A copy is available from the NFUS, SLE and STFA, or may be downloaded from www.gov.scot/Topics/farmingrural/Agriculture/agricultural-holdings/Tenant-Farming-Adviser