LANDOWNERS leader David Johnstone has been accused of demanding 'excessive' increases from his tenants – as high as 40% – on his Annandale Estate near Lockerbie.

Scottish Land and Estates chairman Lord Johnstone has been blasted by the Scottish Tenant Farmers Association for going against industry agreements which, it claimed, limit the amount by which rents should be increased.

But the landowner rejected any accusation that his estate had ignored the joint guidance on rent reviews, and retorted that the STFA was 'deliberately misinterpreting' the agreed rent review framework.

The Annandale Estate rent review was first announced on the SL and E website, where Lord Johnstone said: “Rent reviews invariably attract debate and commentary and, given my position as chairman of SLAE, I felt it right that the estate should be transparent in that it is conducting its own rent reviews.”

It has now emerged that, although the rent reviews are at an early stage, Lord Johnstone’s opening bid is for rent increases of between 20% and 40%, despite rents having been reviewed only four years ago.

STFA responded by highlighting joint industry guidance, agreed by SLaE, NFUS and STFA in 2015, aimed at minimising conflict around rent increases for tenanted farms via a 'systematic and transparent' process incorporating a 'sense test' based on published data for UK inflation. Although not compulsory, rent reviews conducted over the last few years have largely relied on this methodology to agree rents.

One tenant involved in the row, Billy Lockhart, of Greenbeck Farm, Johnstonebridge, told The Scottish Farmer: “The girl from Galbraith’s who came to see me was very nice, but what they are doing is totally wrong and against what was agreed back in June 2015.

“Mr Johnstone is looking for a 23% increase from me, way above the guidelines which he was a signatory to. Had he stuck to what was agreed there would be no problem with any increases based on the current rate of inflation.”

The STFA has been monitoring the rent review and been in contact with tenants on the estate – leading it to express concern to both David Johnstone and Tenant Farming Commissioner Bob McIntosh, regarding the scale of the proposed rent increases and the lack of transparent evidence to justify such an increase.

“If the factoring agents, Galbraith, had followed industry guidelines and been able to justify an increase in rent it would have been limited to no more than the rate of inflation since the last rent review," said STFA director Angus McCall. "This would in practice be 6-7% over the last four years and in common with many other reviews, the rent review would have taken place without any fuss, and kept rents in line with comparable farms in the neighbourhood.

“Tactics of the past must not be used to force an unreasonable rent rise in advance of the new rent test which will deliver fairer rents based on the productive capacity of the holding,” he added.

Responding in turn, the SLaE chairman insisted that his review had followed the joint guidance by producing comparable evidence from across the sector, and the estate had since agreed with the Scottish Land Commission to provide further information on the data that had been used in that research.

"Following the estate providing its written evidence, the guidance makes clear that it is incumbent on the tenant or their agent to provide their comparable evidence as part of their counteroffer to the estate," said Lord Johnstone. "This has not yet happened, but we are still within the guidance timescales and we await that response which would then allow us to make progress towards finding a mutually agreeable outcome.

"Everyone involved in rent reviews knows that there is a negotiation process, with both parties providing evidence, and the estate's opening correspondence is part of presenting that evidence and should not be distorted by some as the estate issuing a final new rent bill," he said.

“At this stage, only two reviews of 15 in total have been completed, one of which has seen no increase in rent and the other which has seen an increase which both the tenant and the estate is content with. We remain in dialogue with other tenants and the estate has been clear that we are happy to see larger increases phased in over a period of time."

Lord Johnstone rejected the STFA's suggestion that the guidance prevents an increase beyond the Consumer Price Index Inflation rate: "The STFA is deliberately misinterpreting the joint guidance which states that CPI is not to be used as a limit but instead to be used as a sense check during this process to ensure a fair market rent."