Court unravels farm tenancy confusion
20 Apr 05
Land Court removes the doubt surrounding timing of rent review applications
A Scottish Land Court decision, which is thought to signal the first of many, has clarified a key part of the Agricultural Holdings (Scotland) Act 2003.
According to agricultural law specialist Alasdair Fox, the court has cleared the confusion surrounding an important provision relative to the review of agricultural rents by confirming that the same situation applies as it had before the passing of the Act.
Doubts arose after the 2003 Act amended the Agricultural Holdings (Scotland) Act 1991 by transferring primary responsibility for rent reviews from arbiters to the Scottish Land Court. The amendment was drafted in such a way that it was difficult to know whether or not it was necessary for the party seeking review to give notice to the other party before making an application to the court, and from what date the court was required to fix the rent. Some even argued that the defects threw into doubt whether rent reviews for 1991 Act leases were possible at all.
The Land Court has now made it clear that the party wishing to initiate the rent review is required to give not less than one nor more than two years' notice of his intention to do so, before the date from which the review is to become effective. It also clarifies that the review date is to be the day after a notice to quit takes effect; and that it is necessary for the Land Court application to be made before the review date, otherwise the ability to have the rent determined by the court will fall.
Mr Fox, Head of Land Resources at Edinburgh solicitors Anderson Strathern, said: “We suggest that this welcome clarification of the law will be the first of many decisions required by the Land Court to interpret provisions of the 2003 Act which are not clear. The error in the drafting of the rent review provision was, without doubt, the most confusing.”
He added that there is nothing to prevent parties negotiating rent by agreement or having it fixed by arbitration, which can now be in such form and according to such rules as the parties may agree.