Farm leaders have issued new industry guidance for carrying out rent reviews on tenant farms.
NFU Scotland, Scottish Land and Estates (SLE) and the Scottish Tenant Farmers’ Association (STFA) have updated guidelines for tenants and landlords conducting rent reviews.
The guidelines, which cover 1991 Act secure tenancies, have been compiled in conjunction with the government’s recently appointed independent adviser on tenant farming, Andrew Thin.
The guidance is an interim measure until the Land Reform Bill 2015 comes into force.
It is underpinned by three core principles.
Firstly rent should be charged only on land and fixed equipment provided by the landlord, and should ignore any potential income contribution attributable to improvements or fixtures belonging to the tenant.
Secondly, proposals and counter proposals should be presented in a form that is fully transparent, and they should contain sufficient detail to enable each party to understand and verify the other’s calculations.
Lastly, each party should be afforded sufficient time to give full and careful consideration to proposals (and counter proposals) tabled by the other.
NFU Scotland president Allan Bowie said: “This guidance should ensure that parties undertaking rent reviews have a clear process to follow, and it will go some way to restoring confidence and trust within the let sector.”
STFA chairman Christopher Nicholson said: “Current economic conditions in agriculture means that many tenants now have grounds for rent reductions, and this new guidance should provide a framework to adjust rents downwards in line with falls in overall farm profits.”
SLE chairman David Johnstone said: “This guidance should help resolve any differences quickly and amicably. We firmly believe that there is a lot more that unites the industry than divides it and this guidance shows that when we all work together constructively it reduces the need for continual recourse to legislation which is surely in no one’s interests.”