March: the month of agricultural rent reviews
Mark Neason MRICS FAAV of Stags Professional Services offers his advice about the rent review process and arbitration to landlords and tenants.
“Most tenancies of agricultural land, buildings and farmhouses contain provision for the rent to be reviewed every three years. This does not automatically mean that the rent will vary either upwards or downwards, but it does exercise the minds of landlords and tenants when the occasion approaches.
“March 2019 will be particularly interesting given the current uncertainties over subsidies and exports; Those considering a rent review in March 2020 will need to serve a notice of at least 12 months. This applies to landlords requiring an increase and tenants anticipating a downturn in rents.
“The most simple and cost-effective process is for the landlord and tenant, or their agents, to meet and agree a new rent, however this is not always possible and opinions do become entrenched. If this happens it may be necessary for a decision to be made by an arbitrator.
“The Royal Institution of Chartered Surveyors has now introduced a simplified arbitration process, which has been designed to be faster and with a much lower cost to the parties. The procedure is more informal and relaxed compared to traditional approaches to arbitration.”
Mr Neason, who is a member of the RICS President’s panel of arbitrators, is hoping that the new regime will mean that costs will not get in the way of a proper and fair rent settlement. He continues, “In order for landlords, tenants or their agents to negotiate rents it is important to try and align offers with the likely opinion of an arbitrator because, if all else fails, arbitration will be the long stop.”
If you have any questions regarding market rents, the rent review process or arbitration please do not hesitate to get in touch with Stags Professional Services
department or contact Mark