Positive changes to disputes of agricultural tenancies but will they be embraced?

19th June 2015

For those that own or occupy land under secure AHA 86 act tenancy, there was a significant and much welcomed change in March, aimed at trying to ensure better long lasting relationships between Landlords and Tenants.

 

Previously, disputes particularly over rent, game damage, written tenancies and model clauses, have had to be decided by the arbitration process, but this has changed to allow third parties to determine the dispute; whether that be family friends in family disputes or experts if it is a matter of rent for example.

 

So why the change? Well the arbitration process is particularly lengthy and as a result ends up in significant cost. Invariably, there is often a winner and a loser, and it’s often the loser that ends up picking up the costs for all the parties. Therefore, there is risk associated with the process, which may go on for many months if not years if it is a complicated matter. The issue of costs is particularly damaging for both parties, as it’s used as a bargaining tool to achieve an outcome in the first instance. If the matter does proceed to arbitration, this often leaves a bitter lasting memory with the loser, which is often irreparable. Of course there are insurance policies to help cover costs but it is the damage to relationships that the use of an expert may help to prevent.

 

It’s important to note, that the third party needs to be appointed before the relevant term date and has to be agreed by both parties; if one fails to agree to such a proposal, then the only recourse is arbitration. Once the third party is appointed, you then can’t go back to the arbitration process and therefore needs to be embraced at the outset of the dispute.

 

There is a fundamental difference between the two processes; an arbitrator has to make a decision based on the facts and evidence presented to him, whereas the expert can use his expertise to help make that decision and therefore it is important to use someone with the necessary expertise to ensure clarity over the dispute and appointment.

 

I see this move as a real positive in helping ensure that relations between Landlord and Tenant remain in a business-like manner and don’t end up in bitter disputes which are costly and often end up being driven forward on matters of principle, rather than a focused business decision. The key will be whether landlords, tenants, agents and lawyers, see this is a positive and embrace the process and I do hope that it now becomes a discussion before needlessly appointing arbitrators. Of course it also requires good experts, which I suspect may also be difficult to find those that are impartial!

 

Another positive and much welcomed change is that from the 1st October, clarification over model clauses on repair and replacement liability comes into force. This will hopefully clarify certain grey areas over the past years that have caused too much debate and cost to both parties.

 

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