Winds of Change for the Agricultural Rent Review Process
Date of Article
Sep 28 2010

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Morrison-Low v Paterson is the first major case on agricultural rent review law since Childers v Anker in 1996 and may signify change for the rent review process under the Agricultural Holdings Act in England.  Concerned with Moonzie Farm in Fife, Scotland, the case falls under the Agricultural Holdings (Scotland) Acts and considers, among other issues, the treatment of the Single Payment under a proposed rent review.   

It was held by the court that neither entitlements nor the Single Payment are attributes of the holding in question and should therefore not be treated as part of the farm’s income when considering the rent payable in relation to the productive capacity of the holding.  The judgment served to illustrate the shift in government policy of de-coupling subsidies from production.  However, this judgment relies heavily on the buoyant Scottish market for ‘naked acres’ and the subsequently high value of entitlements, compared with those in England and Wales. 

Perhaps more immediately relevant for English rent review cases, it was ruled that tenancies of a different nature from that of the subject holding could be used for comparable evidence in this case, provided that appropriate adjustments are made for the differences in terms.    This could perhaps signal a move towards using Farm Business Tenancies as comparable evidence for rent reviews under the Agricultural Holdings Act in England. 

Furthermore, it was ruled that the economic conditions surrounding a rent review should be assessed looking forward over a period of time, rather than using a snapshot of the current situation, as an incoming tenant would who was taking a longer term tenancy.  This would seek to negate the effect of a volatile commodity market on the productivity of the holding. 

These judgments are specific both to the case and to the Scottish legislation that governs the agricultural holding in question.  However, they represent a significant benchmark in case law in Great Britain as a whole and may set a precedent for change in the rent review system for Agricultural Holdings Act Tenancies.