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Rent reviews – N’er the twain shall meet?

Rent reviews – N’er the twain shall meet?

I wonder if a recent Court ruling in Scotland will impact on English decisions next?  They often have done in the past.

Ever since 1995 there has been a disparity between AHA tenancy rents and FBT rents.  FBT rents are judged on the evidence in the open market where land to let is competed for. These tend to show a premium above established AHA sitting tenant rent levels which are based more often on budgets and production figures and costs.  The recent decision of the “Capital Investment Incorporation of Montreal Limited versus Elliott” case in Scotland may indicate a change - if market rent evidence will now be allowed in the negotiations for AHA reviews.

It might seem inconsistent to a layman that a similar piece of agricultural land can have such a wide range of rental value just because it is an AHA or an FBT tenancy.  There are tried and tested reasons but nevertheless the disparity would seem ‘odd’.  In spite of this recent Court case it may be unlikely that the two levels will merge as there are genuine reasons for one being higher than the other. Nevertheless, farmers and professionals alike might wish to note the potential change in the air following the decision from the Scottish Courts.

 

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