A recent rent review arbitration hearing has resulted in a substantial reduction in the rent for the tenant farmer.
The Tenant Farmers Association has welcomed the result.
TFA member Mr Adrian Smith, who farms a rented holding in Monmouthshire, has successfully won his case at arbitration to argue for a substantial reduction in his rent.
The arbitration has now concluded apart from consideration of the costs in the case.
The farm rent was properly reviewed in February 2013, and Mr Smith felt that with the downturn in agricultural returns between February 2013 and February 2016 he was justified to ask for a reduction in his rent in accordance with the rent review provisions of the Agricultural Holdings Act 1986.
Mr Smith’s representing agent, Mr Barry Meade of Davis Meade assessed the rent and put together a case based on his assessment for a substantial reduction in the rent of the holding.
"The arbitration delivered a rent reduction of 13% which is great news.
"This is a 200 acre arable and livestock farm, both sectors where we have seen large decreases in returns over the last three years.
"The same would be true for dairy holdings. I believe this should give other tenant farmers the confidence to argue for rent reductions," said Mr Meade.
'A correct response'
TFA Chief Executive George Dunn said: "I am delighted that Davis Meade was able to put together such a strong case to convince the arbitrator that a rent reduction was the correct response.
"I was particularly pleased that the arbitrator discounted the spurious evidence on Farm Business Tenancy rents presented by the landlord in an attempt to pervert the process.
"The TFA has been advising members for some time that in cases where the rent has been properly reviewed three years ago and the character of the holding along with the terms of the tenancy have not changed, that they will be in a position to present a strong case to argue for rent reductions. This arbitration result supports the TFA's advice," said Mr Dunn.
"The arbitration process can take time to follow through, which is clearly evidenced here as Mr Smith’s rent review dates back to February 2016.
"We are now in October, with Michaelmas reviews in full flow. The TFA has noticed a big change in the attitude of tenants when discussing rent reviews primarily due to the current market conditions for agriculture.
"With cases like Mr Smith’s proving that there is a clear justification for rents to fall, now is the time to properly assess the rent and where justified, not to be afraid to argue for a reduction," concluded Mr Dunn.
