Dispute resolution toolkit: rural property
Rural property disputes
19 July 2017
This feature is part of a series of information sheets on different types of alternative dispute resolution and the processes involved in resolving them. The whole series can be viewed and downloaded from the RICS dispute resolution toolkit
There are two statutory codes that apply to agricultural tenancies and leases in England and Wales. The Agricultural Holdings Act 1986 applies in England and Wales to all agricultural tenancies let prior to 1 September 1995 and to most tenancy successions to those tenancies. The Agricultural Tenancies Act 1995 applies to all agricultural tenancies let after 1 September 1995, except those to which the 1986 act still applies as set out in section 4(1) of the 1995 act.
It should be noted that changes to the repair and maintenance regulations brought in by the Agriculture (Model Clauses for Fixed Equipment) (England) Regulations 2015 (SI 950) only apply, as the title suggests, in England, at the date of writing this toolkit, so there are differences in how repairing and maintenance obligations are dealt with depending on the side of the Welsh border on which the farm sits.
Arbitration features under both codes, and while many cases are related to rent reviews that can be downward as well as upward, quite a large percentage deal with the other factors set out below.
Not just rent review
Following a Regulatory Reform Order in October 2006, the arbitration code applicable to both types of tenancy is the Arbitration Act 1996. Before October 2006, 1986 act tenancies came under their own code. Different agricultural holdings legislation applies in Scotland and Northern Ireland.
Commonly, disputes that can be referred to arbitration under the Agricultural Holdings Act 1986 include the following: rent reviews, compensation and dilapidations at the end of tenancy, notices to quit, game damage claims and Dispute Resolution Toolkit Rural property disputes notices to remedy. There are very strict time limits and the parties must adhere to these.
Following the Deregulation Act 2015, certain disputes under the 1986 act can now be resolved by third-party determination, including rent reviews, end-of-tenancy compensation and compensation for game damage.
Under the Agricultural Tenancies Act 1995, disputes can also be resolved by arbitration or in other ways such as by a chartered surveyor acting as an independent expert, provided that the procedure allows for a decision that is legally binding on the parties. There is a provision in the Agricultural Tenancies Act 1995 for consent to tenants’ improvements to be dealt with by arbitration.
Apart from other matters that have to be referred to arbitration as provided under the statutes, the parties can also refer any other dispute to arbitration by consent. These can cover valuations under option agreements, partnership disputes, matrimonial dispute valuations and livestock valuations.
Chartered surveyors are key
There is a panel of arbitrators appointed by the President of RICS and drawn from chartered surveyors who have undertaken appropriate training and have been accredited through examination to have sufficient knowledge and expertise. The RICS Dispute Resolution Service holds the list and applications are made to the President of RICS for appointments.
It is also possible to try to resolve disputes by mediation and chartered surveyors are beginning to do so more frequently. Where statutory arbitrations are necessary then the arbitration procedures must be followed in the first instance so that an arbitration can proceed if the mediation is unsuccessful.
There should be no reason why a properly prepared surveyor cannot effectively represent their client at arbitration. Some arbitrations can turn on specific legal issues, particularly those relating to notices to quit, and it may be sensible to consider employing the services of a suitably experienced solicitor or taking advice from a barrister in these circumstances.
Specialist skills required
The legislation governing agricultural property tenancies and leases is very specialised, and the training of the chartered surveyor is extremely detailed to cover all aspects of the problems that arise in practice.
Chartered surveyors must be familiar with the Civil Procedure Rules (CPRs) and apply them to their practice, then undertaking the role of an expert witness before arbitrators, tribunals and in the courts. They must follow the RICS practice statement and guidance note entitled Surveyors acting as expert witnesses, which closely follows the requirements of the CPRs and imposes a primary duty of the expert witness to the arbitrator, tribunal or court as opposed to the client.
Arbitrators and chartered surveyors also need to be aware of other practice statements and guidance notes including those dealing with rural arbitrations, direct professional access to the bar, conflicts of interest, and acting as advocates.
When acting for one of the parties, the chartered surveyor should ensure that the arbitrator has all the facts and evidence they need in order to come to a proper award.
The Arbitration Act 1996 also dictates that the object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal without incurring unnecessary delay or expense, and the parties have a duty to participate in and conduct the proceedings as far as possible while giving due consideration to these principles.
The Arbitration Act 1996 also allows an arbitrator to cap costs at the request of one of the parties, and in any event all parties should ensure that costs should be proportionate to the amounts or matters in dispute.
The statutory procedures are often complicated and invariably depend on a prior correct notice being served in most situations. In all cases the emphasis will be on resolving differences by agreement with arbitration as the last resort; but where arbitration is invoked, a surveyor should be aware of the key principles of the act and should use all reasonable endeavours to comply with them.
- The RICS Rural arbitration guidance note published in May and is available to download on isurv.
- This feature is taken from the RICS Land journal (May/June 2017)