Tenants urged to take the lead on rent negotiations

Tenant farmers with a Lady Day (25 March) term are being encouraged to be proactive in pushing for a rent reduction.

The Tenant Farmers Association said it was encouraging farmers who were served a rent review notice last year to “take the lead” on rent negotiations as Lady Day approaches.

George Dunn, TFA chief executive, said he suspected many landlords who served a Section 12 notice (Agricultural Holdings Act 1986) for a rent review were sitting back hoping they could maintain the status quo.

See also: How to manage your rent review with your landlord

But given the challenging economic conditions facing tenants they should consider getting “in the driving seat” in order to secure a reduction, he said.

The TFA says on tenancies let under the 1986 Act it has seen some reductions and many more standstills, but it believes there should have been more reductions.

Mr Dunn said tenants under notice should seek advice on the best course of action but they essentially had three options:

• Make the case to the landlord for a reduction, with the option of applying for arbitration if it looked like more time was necessary to keep the discussions alive. (Either party can use a rent review notice served by the other to trigger the arbitration process).
• Do nothing in the hope that no new notice would be served, which would mean the rent would stay the same for the next two years.
• Decide that they might not be able to get a reduction this year but they could serve their own rent review notice with a view to securing a cut next year.

See also: Business clinic: Advice for tenants seeking rent reduction

Louise Staples, NFU rural surveyor, said the union was encouraging any members who were looking to secure a reduction to look at their budget figures now so they could present a convincing case.

Every farm’s circumstances were different because people were all starting from a different base, she said.

“But I absolutely think that some people should be getting a rent reduction. There is a real window to try for it.”

Tony Rimmer, director of Chester-based Rostons, said he had been surprised to discover a flurry of activity around Candlemas Day (2 February), where landlords who had failed to agree rent increases had applied for the appointment of an arbitrator.

One estate had asked for arbitration on eight of its farms, even though there had been no prior discussions with the tenants about what rent increase it was seeking.

“I think this is sign of people being out of touch with what is happening on the ground – all sectors are in a very different place to three years ago.

“How can they really think that rent should go up with current commodity prices? This doesn’t help the landlord/tenant relationship in the long term.”