Oct 2 2013
SHORT FORM ARBITRATION AND PRACTITIONERS GUIDE TO RENT REVIEWS LAUNCHED BY SAAVA
SAAVA’S ARBITRATION INITIATIVE WELCOME BUT REFORM STILL URGENTLY NEEDED TO RENT SETTING FORMULA
The Scottish Tenant Farmers Association have welcomed today’s launch of the Practitioners Guide to Rent Reviews and the announcement of a new Short Form Arbitration service as a step in the right direction for a cost effective and quick alternative to the Scottish Land Court. STFA recognises the work SAAVA has put into the developing the Guide and the new arbitration system and expects them to be valuable tools in the rent review process.
Commenting on the introduction of SAAVA’s arbitration scheme STFA chairman Christopher Nicholson said: “The Practitioners Guide will provide a much needed rule book governing the conduct of rent reviews. We hope that the Guide will help and encourage an accurate and consistent application of the rent review process throughout the country and remove some of the brinkmanship and pressure tactics that are all too evident at the moment. The concept of short form arbitration was mooted three years ago and I am pleased that it is now ready for use in the rent review process. The success of the new system will, of course, hinge on the members of the panel of arbitrators and the confidence they will inspire.
“This should not, however, be seen as the end of rent review problems. In detailing the rent review process the Practitioners Guide only too clearly emphasises the influence that open market lettings have on sitting tenants rents, inevitably causing rents to escalate with little prospect of future reductions in times of falling profitability. Rent reviews will continue to be contentious, expensive and stressful as long as rents are driven by a scarce and over-heated open market which takes little account of what the farming business can actually stand.
“The evidence is there to substantiate this and we will be pressing the Cabinet Secretary to revisit the way in which rents are set during the Agricultural Holdings Review. By contrast, in England where rents are based on the productive capacity of the holding our sister organisation, the TFA, is urging tenants to serve rent notices on their landlords to reduce rents following the last few years of falling farm incomes. This is not an option in Scotland with our market driven rent system.
“The rent rack will continue unless decisive action is taken. Tenant farmers cannot continue to farm with the spectre of regular rent hikes over-shadowing and threatening their businesses. The overwhelming view of tenant farmers is that this one-sided rent formula must change. Rents must reflect the reality of farm economics, particularly as we approach a new CAP regime of considerably reduced support payments.”