One of Scotland’s best known pedigree cattle and sheep breeders has been left facing a 78% increase in farm rent following a decision made by the Land Court.
John Elliot will- unless he appeals the finding- have to pay a rent of £48,982 (£77.20 per acre) on his 640-acre tenanted farm at Roxburgh Mains near Kelso backdated to 2009.
The rent on the farm had not been increased from the £27,500 ( £42.96 per acre) agreed in 1996 until this review which dates back to 2009.
Roddy Jackson, factor of the Roxburghe Estates, said:“We are relieved that, barring an appeal by the tenant, this long-running case is now at an end. We made every effort to avoid this process, which has incurred significant time and cost. It is regrettable that our various offers to settle which were made, both before the start of the Land Court proceedings and others also during the case itself, were not accepted. Those offers were all at a level which was well below the rent set by the court.
“Whilst the rent fixed by the court represents a significant increase on the existing rent, the Land Court states that the rent is realistic, and is based on the evidence of the open market rent of one comparable farm and the agreed rents negotiated with the tenants of five other comparable farms.
“The case has taken a long time to settle due in large part by the court agreeing to a motion from the tenant to postpone the hearing. A further concern which we have in cases of this type is whether the decision not to settle was influenced by the Scottish Tenant Farmers Association (STFA) insurance scheme for legal costs. This scheme provided cover only in the event that a case ran until conclusion. Such a condition positively discourages out-of-court settlements and makes little sense.”
This assertion was however hotly disputed by Mr Elliot who insisted that he had no insurance cover himself and had not used any insurance scheme available through the STFA. As to other matters relating to the case he said he would make no comment until he had decided whether to appeal. His costs so far have been estimated at between £120,000 and £150,000.
Mr Jackson claimed this was the first ever occasion that it has not been possible to settle a farm rent on the Roxburghe Estates by negotiation.
Commenting on the case, STFA chairman Christopher Nicholson said the Roxburgh Mains decision would deal a “devastating blow” to Scotland’s tenanted sector.
He said: “In making their decision, the Land Court has focused almost exclusively on the evidence of a single open market letting and arrived at an annual rent, which in their own words ‘could not be supported by any budgetary evidence’.
“By following the strict legal definition of the open market test, The Land Court have driven coach and horses through the advice and thinking provided by various professionals in light of the Moonzie case including the recently published SAAVA ‘Practitioners Guide to Scottish Rent Reviews’, which emphasises the need to ensure that a farm rent is viable by reference to farm budgets and other settled rents.
“If a tenant such as John Elliot, himself an experienced and respected farm arbiter with experience of conducting rent reviews, can fall foul of the system then there is little hope for the rest of Scotland’s tenants.”
He said the case demonstrated the need for radical change to the legislation governing rent review.
“Contrary to a misleading statement from Roxburghe Estates, John Elliot was not covered by any insurance scheme which could have provided assistance for legal fees, and therefore insurance considerations had no part to play in the decision not to settle out of court,” added Mr Nicholson.
“Faced with changing demands from his landlord, John Elliot had no opportunity to settle a reasonable rent out of court. The delay in hearing the case resulted from the agreement from both parties to cist (put on hold) the case pending the 2012 Land Court decision on the Moonzie rent review case.”