Advice for tenants

One of the major costs for tenant farmers has always been the annual rent they have to find and, over the past decades, rents have been rising every year in line with increasing prices.

During the course of the past three years, as commodity prices have fallen very dramatically and costs have continued to rise, there has been a change from rent increases to rent reductions - right across the whole tenanted sector of farming. This was before foot and mouth made a bad situation much worse.

In the past, it had been the landlord who instigated rent review proceedings but, in a declining rental market, many landlords are unlikely to be serving notices for rent reviews on their tenants this year. It is now up to the tenants to take the initiative and serve notices asking for a rent review in order to achieve a rent reduction.

This will be a new experience for most tenants and proper advice must be obtained if the rent reduction exercise is to be successful.

The Tenant Farmers Association was formed specifically to deal with tenants' problems, like rent reviews, and the associaton is able to provide help and impartial advice to its members. Even more important is the fact that the group has a list of valuers who are dedicated to working for tenants, rather than landlords. They can be expected to present a much stronger case than a local estate agent who may be representing other landowners as well as tenants. Because most of these agents have worked on a commission basis, it has always been in their interest to achieve higher rents and this factor has always had an upward effect on rental values right across the whole of the market.

The Tenant Farmers Association surveys its members six times a year to gather the level of rents which have been agreed right across the country. This year, once again, the trend is down right across the whole of the tenanted sector, with over 70pc of those farms surveyed showing a substantial decrease. These decreases range from 15pc to 25pc and, with farm incomes continuing to fall because of the effects of foot and mouth as well as other outside factors, this trend is likely to continue as the year progresses.

For tenants this is a new situation and great care must be taken to make certain that every factor is properly dealt with.

Whilst most landlords are well aware of the current situation in farming, many will offer a nominal decrease which will fix the rent for a further three-year period. There is no reason for tenants to accept such changes in the present circumstances. Today the trend is down but you must be able to argue your case and have the facts and figures to prove it.

There are a lot of diversionary ploys which may be used by landlords' agents to minimise the reductions which should be realised in the current market situation and tenants must be aware of this. The landlord-tenant relationship is a purely business arrangement and sentiment does not pay any bills. Remember, if rents come down the landowner's agent's income goes down too. This means he too has a vested interest in your case.

For a tenant in this situation, professional advice is essential and the Tenant Farmers Association was formed especially for this purpose. The TFA can also provide an insurance facility to pay the cost of an arbitration hearing in which landlords or their agents are unwilling to listen to reasonable arguments on behalf of their tenants. Just being a member of the TFA has an effect on certain landlords and the realisation that their tenant has the ability to arbitrate with all the resources of the TFA behind him will often lead to considerable reductions without any fuss. The important message is to take proper advice and take care.

The Tenant Farmers Association can be contacted at 7 Brewery Court, Theale, Reading, Berkshire RG7 5AJ, or tel (0118) 930 6130, where they keep a list of local valuers who are on their list as well as a list of comparable farms on which to base your case for a reduction.

Updated: 08:39 Thursday, January 03, 2002