Scotland has introduced a new Code of Practice on Conducting Rent Reviews to encourage productive dialogue between farm tenants and landlords.
The new set of guidelines are designed to help reach agreements via transparent and objective consideration of all the relevant facts and circumstances.
Rent reviews for agricultural holdings should be conducted as a negotiation not as ‘take it or leave it’ approach, the Tenant Farming Commissioner for Scotland says.
The Code includes the key principles that should underpin a rent review, and factors that should be considered alongside those that should be disregarded.
It includes guidelines on how to initiate and conduct a rent review, and a suggested timetable for negotiations.
The Code also includes suggestions on how to resolve disagreements between the parties and how parties can make a complaint about breaches.
Bob McIntosh, Tenant Farming Commissioner said: “If rent reviews are not handled appropriately they can become a source of dispute and disagreement, and can even permanently sour the relationship between landlord and tenant.
“At the end of the day, the aim is to determine the rent at which the holding might reasonably be expected to be let in the open market by a willing landlord to a willing tenant after taking account of certain factors.
“The new Code offers a series of practical steps to follow, to ensure that rent reviews are evidence-based and conducted fairly to reach an outcome that’s reasonable to both parties.”
What's included in the new Code?
The Code aims to ensure tenant farming rent reviews are fair, objective and evidence-based.
It describes the legal basis for rent reviews and provides a practical approach to conducting a rent review:
• The key principles that should underpin a rent review
• Relevant factors that should be considered in rent reviews, alongside those that should be disregarded
• Guidelines on how to initiate and conduct a rent review
• A suggested timetable for negotiations
• Valid sources of evidence that should be used to underpin a review