Jun 16 2014
INSURANCE POLICY BLAMED FOR LAND COURT RENT BATTLE
LAND COURT RENT DECISION BUILDS CASE FOR REFORM
The Land Court’s recent announcement of its decision to raise the rent on a Roxburghe Estate farm has bitterly disappointed Scottish tenant farmers . Yet again the Scottish legal system and tenancy legislation has failed in the setting of a viable farm rent.
Commenting on the case, STFA chairman Christopher Nicholson said: “The Scottish Land Court’s decision to fix the rent for John Elliot’s Roxburgh Mains Farm on the Duke of Roxburghe’s Estate at £48,982, a dramatic increase of over 78%, will deal a devastating blow to Scotland’s tenanted sector.
“Furthermore, in a misleading statement to the press, Roxburghe Estates have inferred that the case was influenced by the STFA legal insurance policy. However, STFA can confirm that John Elliot was not covered by any insurance scheme which could have provided assistance for legal fees, and therefore insurance considerations had no part to play in the decision not to settle out of court. Moreover, the inference that STFA has backed this and other Land Court cases is totally unfounded.
“STFA do operate an insurance policy available to members; it is not designed to encourage tenants to pursue a case through the Land Court, but does provide some safeguard and evens the balance of power between landlord and tenant.
“In this situation, faced with changing demands from his landlord, settling a rent out of court was not an option and John Elliot had no choice but to defend his interests through the courts. The delay in hearing the case resulted from the agreement from both parties to cist (put on hold) the case pending the 2012 Land Court decision on the Moonzie rent review case.
“In making their decision, the Land Court has focused almost exclusively on the evidence of a single open market letting and arrived at an annual rent, which in their own words ‘could not be supported by any budgetary evidence’. By following the strict legal definition of the open market test as set out by Lord Gill in his ruling on the Moonzie case, the Land Court have driven coach and horses through the advice and thinking provided by various professional practitionerss in light of the Moonzie case including the recently published SAAVA ‘Practitioners Guide to Scottish Rent Reviews’, which emphasises the need to ensure that a farm rent is viable by reference to farm budgets and other settled rents.
“Despite other recent lengthy and costly Land Court cases on rent reviews, the process remains extremely uncertain for both parties. If a tenant such as John Elliot, himself an knowledgeable and respected farm arbiter with experience of conducting rent reviews, can fall foul of the system then there is little hope for the rest of Scotland’s tenants. This case clearly demonstrates the need for radical change to the legislation governing rent reviews.
This is a complicated legal judgement and once we have time to digest the detail and matters arising from this decision STFA will be making further comments at a later date.