Rent reviews under agricultural tenancies
There are different rent review provisions for 1986 Act Tenancies and Farm Business Tenancies.
1986 Act Tenancies
For tenancies under the Agricultural Holdings Act 1986, at least three years must pass from the start of the tenancy - or the previous rent change - before either the landlord or tenant has the right to a rent review.
Prior to the Regulatory Reform (Agricultural Tenancies) (England and Wales) Order 2006 (RRO), if land was added to a holding, it would create a new tenancy and a new three-year rent review period.
Changes to the law now mean that where land is added to, or removed from, a holding and there has been no change in rent - other than an increase or reduction due to the adjustment in the size of the holding - the next rent review must be at least three years from when the original tenancy began or from the date of the previous rent review for the original tenancy.
Farm Business Tenancies
The Agricultural Tenancies Act 1995 allows landlords and tenants to opt out of the default rent review arrangements. They can negotiate their own rent review arrangements, providing this does not rule out a rent reduction. Parties can also ask that a rent review should be referred to an independent expert, but cannot demand arbitration under the default provisions of the Act if they have already agreed to use an independent expert.
If the parties do not wish to make their own arrangements on rent, then the existing default provisions will apply, and either the landlord or tenant will be able to ask for a rent review every three years.
If the issue of rent reviews goes to an arbitrator, there are no restrictions on the criteria that an arbitrator can take into account, other than any which would preclude a reduction in rent.
This content is subject to Crown Copyright
- Business Link