Oct 17 2018

GUIDANCE CALLS FOR HONESTY AND TRANSPARENCY IN RENT NEGOTIATIONS

Scottish Tenant Farmers Association

News Release

18th September 2018

GUIDANCE CALLS FOR HONESTY AND TRANSPARENCY IN RENT NEGOTIATIONS

The Scottish Tenant Farmers Association has warmly welcomed the latest guidance on negotiating and conducting rent reviews issued today by Scotland’s Tenant Farming Commissioner (TFC), Bob McIntosh. The guidance builds on the2015 guide published jointly with NFUS, STFA and SLE and aims to clarify some aspects of the rent review process, particularly those relating to the provision of evidence and the use of the inflation linked sense check. The guidance is mainly aimed at 1991 tenancies but will also be relevant to some LDTs which have opted to use the same rent test.

Commenting on the latest guidance on rent reviews STFA Director Angus McCall said; “The ways in which rents are determined and rent reviews are conducted have been the subject of some intense debate over the last couple of decades triggering changes in two Acts of Parliament. This guidance seeks to continue reforming the rent system by ensuring that rent reviews are conducted in a fair and transparent manner, with all rent proposals based on sound verifiable evidence and negotiations carried out in a calm and responsible manner where neither side tries to “put one over” the other.

“It is disappointing that STFA is still hearing reports of rent reviews being carried out with scant regard to the guidelines agreed by the industry, albeit by a minority of land agents. Concerns about the scale of proposed rent increases and the lack of transparent evidence which would justify such an increase led to complaints being raised with TFC, Bob McIntosh earlier this year and we are pleased to see some aspects of the recommended rent processes reinforced and clarified in the latest guidance.

“The TFC has explained that the inflationary linked Consumer Price Index “CPI” is not intended as a rent setting prescription, but as a “sense check” and just one of the factors to be taken into account in determining the rent. Many land agents have got into the habit of adopting the CPI as a handy shortcut to justify rent increases without too much work, regardless of other economic or comparable evidence.

“The Guidance has also reinforced the need for transparency and honesty in justifying and explaining evidence put forward by both parties in their rent proposals or counter proposals. Too often rent demands have been based on vague comparable evidence presented with no detail, identification or explanation, making it virtually impossible for the other party to analyse to produce counter proposals.  STFA agrees with the TFC’s conclusion that rent reviews require agreement based on discussion and analysis of evidence provided by both sides. Wherever possible, comparable evidence should not be presented without identifying the holdings to allow adjustments for differences. Rent determination is not an exact science and rent proposals should therefore never be presented on a take it or leave it basis that precludes the opportunity for discussion and negotiation.

“The new rent system will be based on the productive capacity of the holding and whilst we wait for the new system to be finalised, those conducting rent reviews should bear in mind that rents should always be fair and economically justifiable. If agreement cannot be reached, STFA would always recommend the use of expert determination or even arbitration with the Land Court as a last resort.

The Guide is available at https://landcommission.gov.scot/tenant-farming/reviews-and-reports/

By tfadmin • Uncategorized •

Aug 29 2018

TENANTS URGED TO MAKE UP LOST TIME WITH AMNESTY

Scottish Tenant Farmers Association

News Release

28^th August 2018

TENANTS URGED TO MAKE UP LOST TIME WITH AMNESTY

The Scottish Tenant Farmers Association is using this week’s tenants’ amnesty awareness campaign to urge tenant farmers to take advantage of the one-off opportunity for tenants to register improvements they have made on their farms, so they will be eligible for compensation should the tenancy come to an end. The 3-year amnesty has now less than 2 years to run and, with only a fraction of Scotland’s the 5000 or so tenants having made a start and even smaller numbers having completed the process, time is running short.

The amnesty applies to all types of tenancy where improvements have been carried out without the necessary notices and consents which would qualify them for waygo compensation. It will not, however, apply where the landlord objected to the original improvement notice or if the improvement has been carried out in a manner significantly different from the original notice.

The improvement must be judged “fair and equitable for compensation to be payable and the landlord can object if he carried out the improvement in whole or in part or allowed a benefit to the tenant in consideration of his carrying out the improvement.

STFA Chairman Christopher Nicholson commented; “STFA views this as one of the most important reforms to come out of the 2016 Act. It will not only ensure that tenants can receive fair compensation for their improvements, but it will also establish a record of improvements that must be ‘black patched’ or disregarded at rent reviews. Many tenants on secure tenancies may consider that their tenancies will never come to an end and the amnesty not worth bothering about. However, although that may be the case, rents are soon to be based on the productive capacity of the holding and identifying tenant’s improvements so they can be disregarded will be crucial. After all no one wants to be rented on their own improvements.

“It is up to the tenant to initiate the process and this may involve a fair bit of work in looking out evidence, such as invoices and past correspondence, to show the tenant or his predecessors carried out the improvements. The more evidence that can be put together, the easier it will be to prove that it is fair and equitable that compensation should be paid.

“We would advise tenants to cast the net far and wide when making their list of improvements, as the definition of an improvement is broad, being ‘any building or structure affixed to land and any works on, in, over or under land’. As well as buildings, housing, fencing and other obvious items; improvements to land, such as ditches, drainage, removal of stones and other obstacles to cultivation; field boundaries; access improvements; and provision of services should also be included. It is better to include too much rather than too little, as there will be no second chances if any improvements are missed.’

“To cut back on cost, most tenants should try and do the legwork themselves in compiling a list of improvements and looking for evidence, after all they know their own farms best. On the other hand, professional assistance will probably be needed for the more technical tasks, evaluating improvements to judge which will meet the fair and equitable test, and, presenting the amnesty notice to the landlord and negotiating improvements to be registered. The final agreement is a legal document and should also be professionally checked.

“Finally, there are plenty sources of advice available and TFC’s Code of Practice should be read and followed. It should also be noted that, although it is the tenant’s responsibility to initiate the amnesty discussion, thereafter landlords and tenants should jointly prepare an agreed list of improvements and both parties should assemble and be prepared to share relevant documents and other evidence past agreements and transactions relating to improvements. In other words, there is an expectation that this should be a co-operative and consensual process.

“The amnesty has the backing of the whole industry and no tenant should feel nervous about approaching his landlord on the matter, after all, it was originally the brainchild of Scottish Land and Estates and most landlords will be prepared for it.”

For further information contact:

Christopher Nicholson           01988 500429

Angus McCall                          07767 756840

By tfadmin • Uncategorized •

Aug 26 2018

STFA WELCOMES INDUSTRY AMNESTY CAMPAIGN

Scottish Tenant Farmers Association

News Release

26th August 2018

STFA WELCOMES INDUSTRY AMNESTY CAMPAIGN

This Monday sees the launch of a week-long campaign by the industry to raise awareness of the amnesty on registering improvements that tenant farmers may have made to their properties and land. The campaign will be mainly conducted through the press and social media and aims to emphasise the importance of the amnesty period which started on 13 June 2017 and lasts for 3 years. A key message of the campaign will be to highlight that the amnesty is not only essential to gain agreement on improvements for which the tenant can claim compensation at the end of the tenancy, but also for rent reviews. A key principle has always been that a tenant should not be expected to pay rent on his own improvements.

The week-long campaign will feature video interviews with Crown Estate tenant Brian Shaw and his factor Mark Fogden from Savills who will speak about their experiences in conducting the amnesty, and it will also promote the Tenant Farming Commissioner’s Code of Practice.

The amnesty is one of the provisions of the Land Reform Act (Scotland) 2016 and allows for certain past improvements carried out by the tenant to be eligible for waygo despite missing notices or consents. The amnesty will last only for a 3 year period during which a tenant may give notice to his landlord that he intends to claim compensation at waygo for certain existing improvements.

Commenting on the campaign, STFA Chairman Christopher Nicholson said: “We are delighted that the whole industry is getting behind this move to encourage tenants to take part in the amnesty. The clock is ticking fast as STFA and tenants should remember that they are responsible for initiating the process and should do so as soon as possible.

“The fact that this is an industry backed initiative, landlords, tenants, lawyers and land agents as well as the Scottish Government, should give even the most diffident tenant the confidence to approach his landlord and register his improvements. Individuals can do much of the work themselves, but there is plenty of advice and guidance available, so our message is – don’t delay. The nights are drawing in and there will soon be time to devote to compiling a list of improvements and supporting evidence, so no excuses!”

By tfadmin • Uncategorized •

Jul 31 2018

STFA calls for feedstuffs to go to livestock not renewable energy during fodder crisis

Scottish Tenant Farmers Association

News Release

 1^st July 2018

STFA calls for feedstuffs to go to livestock not renewable energy during fodder crisis

The Scottish Tenant Association is appealing to the Scottish Government for assistance in tackling the looming fodder crisis in the livestock sector which has occurred as a consequence of the continuing drought and hot weather.

In a letter to Cab Sec Fergus Ewing, STFA has said that with grass becoming increasingly scarce on most farms there are major concerns about maintaining grazing livestock and providing sufficient fodder for the winter months.  Not only are fodder crops lighter than usual, but many farmers are being forced to graze silage fields and some are already eating into winter feed stores to keep stock going.  STFA has requested an early meeting with the Cab. Sec. to discuss ways to help the livestock sector weather the next few months, especially with the uncertainties surrounding Brexit looming next Spring.

Commenting on the situation STFA Chairman Christopher Nicholson said: “The picture being painted from Shetland to Wigtownshire is one of an impending crisis with grass growth at a virtual standstill, despite some welcome rain last week, and hay and silage crops between half and two thirds of normal. Dairy farmers are having to eat into winter silage rations, buy whole crop silage or face drying off or selling cows to maintain production.  The grass shortage has hit cattle markets and the autumn store lamb sales face uncertain trade.

“Traditionally, in times of fodder scarcity, we were able to utilise arable by-products such as straw, carrots potatoes etc and supplement with concentrates or distillery by products such as draff and pot ale syrup.  These alternative feeds are now difficult and prohibitively expensive to source; draff is in short supply for a number of reasons, straw also looks like being equally scarce and, as we have stated before, the situation is being exacerbated by tens of thousands of acres of crop as well as tons of distillery by-products being diverted towards the renewable energy sector in supplying AD plants and biomass boilers.

“AD plants are also suffering from lighter than expected rye crops and are in competition in in the fodder market with livestock producers who they will invariably outbid. STFA is worried that that this situation will either lead to welfare issues in the coming months or to financial difficulties as producers are forced to off load stock onto a falling market.  Even if we get sufficient rain to get crops moving again over the next few weeks, it will be too late to fill feedstores.   Drought is also evident in other countries so importing feedstuffs may not be an option even if it were affordable.

“STFA will be meeting Fergus Ewing at the Black Isle Show to discuss what measures could be taken to ensure that provision is for adequate food supplies to take our livestock, particularly breeding livestock, through the coming weeks and over the winter.  We are entering a crisis situation and the government will have to intervene if we are not going to find irreparable damage done to the Scottish livestock, especially with the possibility of entering into a Brexit disaster zone in a few months’ time.  In particular STFA will be exploring ways of diverting feedstuffs from renewable energy towards the livestock market to preserve the future of livestock production in Scotland.

“The Scottish Government has had a good track record over the past couple of years in bringing forward loans and STFA will be urging Fergus Ewing to continue to do so ensuring that payments through agricultural and environmental schemes arrive on time. These are exceptional times and the farming community will find budgets and cash flows under extreme pressure over the coming months.”

By tfadmin • Uncategorized •

Jul 18 2018

STFA welcomes Tenant Farming Commissioner’s Review of Buccleuch Estate Agricultural Tenancy Negotiations

Scottish Tenant Farmers Association

News Release

18th July 2018

STFA welcomes Tenant Farming Commissioner’s Review of Buccleuch Estate Agricultural Tenancy Negotiations

The Scottish Tenant Farmers Association has welcomed the recently published Review by the Tenant Farming Commissioner (TFC) on the conduct of the Duke of Buccleuch’s agents tasked with reviewing end of tenancy arrangements for Buccleuch tenants in the South of Scotland.

Following adverse publicity resulting from the end of tenancy reviews for non-secure tenants on Buccleuch’s Bowhill and Langholm Estates, Buccleuch Estates asked the TFC to look into the concerns and allegations which had been raised publicly.

The TFC’s report concludes that although none of the actions by the Buccleuch agents were illegal, best practice had not always been followed by the agents and the principles contained in industry agreed guidance may not have been adhered to.

Commenting on the report, STFA Chairman Christopher Nicholson said: ‘This report has proved to be a valuable exercise in providing a clear example of the need for the cultural changes which the Scottish Land Commission are seeking to achieve. While there are no allegations of acting illegally, the report demonstrates the wider duty of landlords to their tenants and the public. Clearly it is unacceptable in the 21st Century for landlords and their agents not to be following industry agreed best practice and conducting negotiations without sensitivity and without a moral compass. Landlords who operate without regard for best practice will attract damaging criticism, as Buccleuch have discovered, which only stregthens calls for further legislation.

‘The TFC’s report also addresses the need for landlords to be accountable to the wider public. This recent exercise by Buccleuch of reviewing the future of 26 non-secure tenancies and planning for forestry on significant areas of farmland has implications not just for the farm tenants but also the wider local communities. The TFC highlights the need for landlords to seek an appropriate balance between their own business needs and the interests of the wider local community. To achieve that requires good planning, communications and public engagement, plus sensitivity for the needs of tenants and communities.

‘The findings of the Buccleuch Review can only add support to the recommendations made earlier this year in the TFC’s Review of the Conduct of Agents. These included the need for land agency firms to focus on training in interpersonal skills, to seek feedback on the behavioural aspects of agents, and to achieve professional standards that promote an appropriate balance between their duty of care to their client and their duy of care to others including the reputation of their profession.

‘This report shows that land agents are still in the public spotlight, and that there is still room for improvement. It is not enough for agents to simply stay within the law, they also need to act in a fair and reasonable manner with sensitivity for the needs of other parties.

‘Buccleuch Estate deserve some credit for allowing an investigation into the conduct of their agents. There is a clear message to other landlords that they should be prepared to monitor and take responsibility for the conduct of the agents they employ.’

By tfadmin • Uncategorized •

May 13 2018

STFA URGES GOVERNMENT TO PRIORITISE RELINQUISHMENT AND ASSIGNATION MEASURES TO ENCOURAGE TENANCY SUCCESSION

Scottish Tenant Farmers Association

News Release

 10th May 2018

STFA URGES GOVERNMENT TO PRIORITISE RELINQUISHMENT AND ASSIGNATION MEASURES TO ENCOURAGE TENANCY SUCCESSION

The Scottish Tenant Farmers Association is urging the Scottish Government to make every attempt to accelerate implementation of the section of the Land Reform Act covering the relinquishment and assignation of tenancies to encourage tenancy succession. Government officials are concentrating their efforts in favour of finalising the rent test, but STFA is concerned that this is holding up progress with other equally important sections of the Act.

The implementation of the agricultural holdings sections of the Land Reform Act has proved to be more difficult and complex to implement than anticipated and it now appears that it will take more than 3 years before some of the new measures will be enacted. The Relinquishment and Assignation measures which will encourage elderly tenants to retire and to allow tenanted farms to be passed to the next generation have been eagerly awaited and are now causing a logjam in the system. Brexit is also exacerbating the situation as farmers plan for the future.

Writing to the Cabinet Secretary, Fergus Ewing STFA Director Angus McCall said: “Early implementation of the Relinquishment and Assignation section is becoming crucial to an increasing number of tenants who are endeavouring to plan their retirement or exiting from the sector to make way for the next generation.  As you will appreciate agriculture is going through a period of extreme change and many tenant farmers who have been planning retirement but waiting for the legislation to be implemented now feel that they can wait no longer.   We are getting weekly calls from members and their advisers in this position and, bearing in mind the timescale required for relinquishing a tenancy and the need to work with bi-annual term dates, the years are slipping by and many these tenants will be deprived of the opportunity to take advantage of the benefits granted to them through the 2016 Act.

 “This situation is becoming more and more urgent as the months slip by and I would urge you to prioritise the implementation of this section, even at the risk of slippage with the rent test, although I would have thought we are not far away with that.  I understand from officials that work has hardly started on the Relinquishment section and as it requires an affirmative procedure, implementation will still be some way off and, as time goes by, many tenants will not be able to afford to wait.   Although some retirement deals are being brokered we know of many other situations where the tenants are leaving their farms with minimal compensation and the longer implementation takes the less amenable landlords may become to agreeing a reasonable end of tenancy package without the backdrop of imminent new legislation.

 “I hope you will be able to facilitate a faster turnaround of implementing the Relinquishment and Assignation to allow this valuable new piece of tenancy legislation to play its part in encouraging those who wish to leave, a dignified exit from the sector making way for the next generation of tenant farmers. 

“STFA has been reassured by the Cabinet Secretary that he understands tenants’ frustrations and “meaningful work” will take place on relinquishment and assignation and this will be officials next priority. However, STFA is aware that there are a significant number of tenants planning their retirement and time will soon be passing them buy and believes that this section should now be treated with equal importance to the rent test. The Tenant Farming Commissioner has produced guidance to the legislation but it is voluntary and no substitute for the statutory provision.”

By tfadmin • Uncategorized •

May 13 2018

STFA welcomes Tenant Farming Commissioner’s Review on the Conduct of Agents of Agricultural Landlords and Tenants

Scottish Tenant Farmers Association

News Release

10th May 2018

STFA welcomes Tenant Farming Commissioner’s Review on the Conduct of Agents of Agricultural Landlords and Tenants

The Scottish Tenant Farmers Association has welcomed the recently published Review by the Tenant Farming Commissioner on the Conduct of Agents of Landlords and Tenants. The Review was a statutory requirement of the 2016 Land Reform Act and makes some robust recommendations to improve working relationships between landlords, tenants and agents.

Commenting on the review, STFA Chairman Christopher Nicholson said: ‘This review contains no surprises and paints a similar picture to an earlier survey published by the Scottish Government in 2014. We have always recognised that the majority operate in a fair and reasonable manner and that the dissatisfaction stems from the practices of only a handful of agents. However, with the concentrated pattern of land management in Scotland, a few mavericks can have a disproportionate effect on the tenanted sector as a whole and damage the reputation of their profession.

‘The review shows that relationships between landlords and tenants are generally good, with landlords and tenants satisfied with the agents they employ, but unsurprisingly less satisfied with the agents employed by the other party. The reasons for dissatisfaction were as expected, including poor communication, lack of communication, aggressive and insensitive behaviour, a lack of transparency and honesty, and little regard for the importance of preserving good long-term relationships.

‘The review recognises the damage caused by poor behavioural attitudes of some agents, lack of good interpersonal skills and lack of emotional intelligence; all problems that STFA are familiar with from feedback received from tenants. Relationships were found to be better where there were regular face to face meetings between landlords and tenants, and one disturbing statistic from the review is that 46% of tenants meet their landlord once a year or less, and 16% never meet their landlord.

‘Rent negotiations continue to be a cause of poor relationships with some recently conducted rent negotiations demonstrating the lack of regard certain agents have for the core principles contained in the industry agreed guidance on rent reviews. For too long rent reviews have been conducted as a dark art, and the review’s recommendation that guidance on rent reviews is adhered to, with particular insistence on openness, transparency and honesty will be a welcome change.

‘Also welcome is the recommendation that the professional bodies should work with the Tenant Farming Commissioner to produce a guide to professional standards and a complaints system with particular reference to the tenanted sector.

‘The review does not however address the points made by the Law Society, that an agent is not required to act in a fair and reasonable manner or follow the codes of practice providing he stays within the law.

‘Despite the difficulties raised by the Law Society, and the challenges ahead to provide a workable complaints system, the review provides a positive report but with the message that there is room for improvement. It is now up to the Cabinet Secretary to take forward the review’s recommendations.

By tfadmin • Uncategorized •

May 13 2018

SAAVA WARNED NOT TO STOP CLOCK ON RENT REVIEW REFORM

Scottish Tenant Farmers Association

News Release

 5th May 2018

SAAVA WARNED NOT TO STOP CLOCK ON RENT REVIEW REFORM

The Scottish Tenant Farmers Association has cautioned the Scottish Agricultural Arbiters and Valuers Association against being negative in their attitude towards the proposed changes to rent review procedures. The warning followed a recent statement from newly appointed SAAVA President, Ian Austin, criticising the new rent system as being “more procedural and complex” than at present and advocating a re-examination of the proposed approach through an open debate, despite the industry having spent the last 4 years debating the subject.

Reacting to SAAVA’s comments, STFA Christopher Nicholson Chairman said; “It is widely accepted that the current open market rent system is no longer fit for purpose and the time is ripe to move towards a new method of rent setting based on what the holding can produce using the land and fixtures supplied by the landlord, taking proper account of improvements made by the tenant. These principles for the new rent test are patently fair and were a recommendation from the Cabinet Secretary’s Review of Agricultural Tenancy Legislation in 2014.

Tenant farmers have been looking for change for nearly 20 years and cannot continue operating under the yoke of the fear of ever increasing rents from a broken open market rent test with a punitive Land Court battle in the background unless they accede to demands. History tells its own story with only 3 rent cases heard in the Land Court since 2003 at an average cost well into the hundreds of thousands of pounds as tenants prefer to settle rather than fight.

“Reforming the rent review process is obviously a complex task which has occupied a great deal of time, energy and expense. It is now incumbent on those involved to use their knowledge and expertise to make the new rent test work rather than trying to stop the clock and start again, shelving the operation is not an option. STFA is confident that if the will is there, a suitable methodology can be found to deliver a “fair rent”. After all, a very similar rent review process has been operating successfully South of the Border for more than 30 years.

“It has been more than two years since the Land Reform Act became law and we are still waiting for some major elements to be implemented, and we are worried that further talk of delays to implementing the rent test will only hold back the rest of the Act. STFA has already written to Cabinet Secretary Fergus Ewing expressing concerns at the length of time it has taken to activate some crucial sections which look like lingering on well into 2019, if not beyond.”

By tfadmin • Uncategorized •

May 13 2018

STFA WELCOMES NEW CODE AND GUIDANCE ON LATE PAYMENT OF RENT

Scottish Tenant Farmers Association

News Release

 18^th April 2018

STFA WELCOMES NEW CODE AND GUIDANCE ON LATE PAYMENT OF RENT

 The Scottish Tenant Farmers Association has welcomed the publication this week of the Tenant Farming Commissioner’s latest Code of Practice on the Late Payment of Rent and Guide on the use of Alternative Dispute Resolution.

The Code details the importance for tenant farmers of paying rent on time and sets out the risk of losing the tenancy if reminders to pay are ignored. For landlords, it seeks to ensure that landlords behave in a reasonable manner by discussing the late payment with the tenant giving him every opportunity to rectify the situation.

The Guide to Alternative Dispute Resolution outlines the various different ways of trying to resolve disputes without going to court and provides valuable guidance on the suitability of using different methods of ADR in differing circumstances.

Commenting on the new Code and Guidance, STFA Chairman Christopher Nicholson said: “The new Code of Practice on Late Payment of Rent follows real life situations where tenant farmers have lost their tenancies through late payment of rent, in some cases by days. The vast majority of tenant farmers realise the importance of timely payment of rent and there is invariably a reason why mistakes have been made and the rent has been unpaid. For example, it is not unusual for an elderly and confused tenant or one disturbed by mental illness to become forgetful and lax in keeping up with bookwork and settling bills. In this situation it may well be the next generation who pay the penalty of losing their family tenancy.

“That is why it is so important for landlords and their agents, who should know their tenants in any case, to find out why rent payments are late and explain that the danger of losing the tenancy if the rent remains unpaid. If the tenant is possibly confused or mentally instable, the situation should be also be discussed with family before serving final notices to quit. Non-payment of rent is one of the few occasions where a landlord can bring a secure agricultural tenancy to an end, but that should be no reason for regarding it as an opportunity to be seized rather than a sign of something being wrong with the tenant.

“The Code also recommends that the landlord should always invoice the tenant for the rent due rather than following what has become the common practice of not issuing invoices at all which can lead to confusion and term dates being inadvertently missed.

“STFA sees the Guidance on ADR as an important step away from reliance on the Land Court for resolving disputes. The various forms of ADR have valuable roles to play according to the different circumstances. Arbitration and Expert Determination could be particularly important determining rent under the new test, particularly as the Land Court plainly isn’t working for rental disputes – only 3 cases since 2003. In fact, where rental disputes are concerned it is mainly used as a tool of intimidation rather than an forum for settling disagreements.

“However, as the Land Court will remain the court of last resort is becoming increasingly important that it adjusts its procedures to deal with simple rental disputes more cost-effectively and timeously. The TFC is dedicated to improving landlord/tenant relationships and reducing disputes and conflict, but on the occasions where that is not successful the Land Court must be fit for purpose.

By tfadmin • Uncategorized •