Rent arbitration case may set precedent for further claims

A substantial reduction in rent for one farmer following a landmark arbitration hearing could set a precedent for other farmers to challenge their rents.

The Tenant Farmers Association (TFA) has welcomed news that Adrian Smith, who farms a rented holding in Monmouthshire, has successfully won his rent reduction case at arbitration.

His farm rent was previously reviewed in February 2013, but Adrian Smith – a TFA member – believed that with downturn in returns from farming between the date of his original review and February 2016 his rent should be amended in accordance with the rent review provisions of the Agricultural Holdings Act 1986.

Barry Meade of Bath-based Davis Meade Estate Agents assessed the rent on Adrian Smith’s behalf and put together a case based on his assessment which called for a significant reduction in rental rates on the holding. Following an arbitration case with the farms owner a rent reduction of 13 per cent was agreed.

“This is a 200 acre arable and livestock farm, both sectors where we have seen large decreases in returns over the last three years,” said Barry Meade.

“The same would be true for dairy holdings. I believe this should give other tenant farmers the confidence to argue for rent reductions.”

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.

“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.”

Posted in ARA.