Opinion: Landlords and tenants should build closer ties
© dvlcom-stock.adobe I feel like I’ve woken up in a game of Monopoly, except someone’s taken away the “Go” square.
When things aren’t going your way in Monopoly, at least there’s the prospect of a role of the dice taking you past Go again and that precious £200 getting you round the board again until your luck changes.
It doesn’t feel much like our luck is about to change as farmers.
See also: Opinion – Shifting responsibility is deadly in farming
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Often in agriculture, landowners and tenants feel very different magnitudes of pain.
This time I believe we are all in it together, so landlords can be forgiven for trying to squeeze rents when their diversified incomes are struggling. However, what can feel like a quick win can sometimes become a costly mistake.
In previous generations, there was often a direct and close relationship between tenant and landlord, but the rise of land agency firms in the 1970s saw many of these relationships distanced and both sides lost touch with each other and their goals.
Over the decades, pleasantries over the farm gate became summons to boardrooms, often without the landowner present, and now the distance is “normal” and the relationship broken, at a time in British farming when it is needed most.
Neither tenant nor landlord will benefit from aggressive stances on rent reviews or tenants/estate improvements right now.
Too often we’re seeing a good tenant chosen as they will improve the asset – they implement drainage, upgrade grain stores to comply with Red Tractor standards, put in new tracks, fencing and water infrastructure, only to be turfed out when the going gets tough due to “a change in farming policy” (which translates to “we think we can squeeze a few more shillings out of the place”).
The landlord and the agent assume they can keep all the improvements without compensating the tenant.
Usually this is under the guise of “we think you used a grant” or “we didn’t grant explicit permission” – which many don’t as they understand exactly where that leaves the tenant.
But if the tenant’s only option is to implement the improvements to utilise the asset for farming purposes it doesn’t seem very fair.
And as for the grant argument, it goes with the SBI, so what business is it of landlord or agent? If you buy a drill with some grant funding, you don’t sell it with that amount discounted. It’s a ludicrous argument.
The grant is there for the farming activity, not the landlord’s uplift in capital value.
And the most common problem with these situations is that the landlord can’t afford to reimburse the tenant for the improvement as their distance often means they have no comprehension of what has been done and what it has cost.
So their attempt to raise a few extra shekels often results in a big bill to settle or infrastructure having to be removed – which benefits no one, least of all the poor soul they’ve re-let the farm to.
Landlords need to take back control of these relationships and discussions need to precede negotiations.
It’s so easy to say tenants are fools for investing in other people’s farmland, but the need to comply with Red Tractor standards and health and safety legislation often dictates they don’t have a choice.
And as for the agents, I think they should “Go to jail, do not pass Go and do not collect £200”!