22 March 1996

Tenants urged to take advice

TOO many tenants are agreeing to rent rises without taking advice and without paying sufficient attention to the likely pattern of future income.

In many instances tenants are settling rents on the basis of what cash is in the bank, says the Tenant Farmers Association. But there is a high risk of a squeeze on margins, as product prices are unlikely to continue rising, while input costs are going up steeply.

"Too often a tenant compares the altered rent with farm business tenancy rents and then settles," says TFA director general, John Rennie. He argues the two are not comparable, as farm business tenancies are supposed to reflect open market value, while Agricultural Holdings Act tenancies are based on the earning capacity of each specific farm.

TFA valuers also warn that, in some cases, notices of a rent review are being issued asking the tenant to sign and return a confirmation of agreement, only mentioning as a subsidiary point that negotiation is possible.

Where a tenant agrees to a rent rise on this basis, and he is part of a large estate, this could be used as a benchmark by the landlord in other rent reviews with his neighbours.

"The best way of holding rents down is by tenants acting together, taking professional advice and ensuring there is no chance of being picked off one by one," advises the TFA. &#42