Agricultural Tenancy Rent Review.

Berrys acted for tenant farmer of mixed livestock and arable farm, circa 400 acres in Shropshire.

What happened:

Client received notice from landlord’s agent under section 12 of the Agricultural Holdings Act 1986, which asks for rent to be determined by arbitration. Notice is formal in appearance. Tenant farmer called Berrys to ask what to do.

Berrys explained the rent review process to the tenant farmer and thereafter handled all communication with landlord’s agent.

Landlord put forward his proposal and evidence for increasing the rent by £20/acre taking into account:

• Character and situation of the holding
• Terms of the tenancy
• Productive capacity of the holding and its related earning capacity
• Current level of rents for comparable lettings

Berrys met with the landlord’s agent to discuss relevant factors and comparable lettings and put forward counter proposal which included a request for the landlord to assist with building a new grain store on the farm. Following the meeting there were further discussions, the amount of investment in the grain store was agreed and the revised rental was also agreed at £4/acre more than the current rent.

Outcome:

Satisfactory result for the tenant. Rent is now agreed for a three year period and he knows the landlord is going to contribute to improving the grain storage on the farm. At the third anniversary of the rent review, the landlord may or may not choose to serve notice requiring the rent to be reviewed again.