When to Renegotiate Rent
If you are a landowner with a lease agreement that has been in place on your land for five years or more, you may wonder if the rental payments you receive are fair and in keeping with current rates.
The amount of annual rent paid to landowners may be renegotiated following the fourth anniversary of the most recent agreement between the landowner and the company.
Rent for the occupation and use of private land for a resource activity is to compensate the landowner for actual ongoing loss, not to compensate for the operator’s use of the land. Payment for use of the land would have been included in the first year payment.
How to Pursue Rent Review
Landowners are encouraged to begin the rent review discussion directly with the company. If no response is received, the following steps should be followed to pursue the renegotiation through the Surface Rights Board (SRB):
Step 1:
As a landowner, you can initiate the review and renegotiation process by completing SRB Form 2 – Notice of Rent Review and sending it to the SRB and to the company. Form 2 can be found on the SRB website and is designed to notify the company there is reason to renegotiate rental amounts.
Step 2:
If 60 days have passed since you sent a copy of Form 2 to the company and no response has been received, or you and the company are not able to agree on a rental amount, you have the option to complete an application to the SRB to enter into mediation or arbitration. The application process can be started using SRB Form 1A, noting in section C that the dispute is about rent review.
Step 3:
When the SRB receives an application, it will begin the mediation process through telephone or virtual meetings. If a landowner and company are not able to agree on new rental amounts during the mediation process, the SRB will refer the case to its Arbitration services.
Additional Tips and Considerations as You Begin Renegotiations
- Revised rent amounts are payable for the period following the effective date, not for past losses.
- The onus is on the landowner to establish that an increase to the rental payment is warranted to compensate for ongoing losses.
- A landowner should be prepared with information to demonstrate a loss of income or ongoing loss. The value per acre or analysis of probable future use and probable future losses are examples of evidence to provide to the company or to the SRB.
The Farmers Information Service is available to step you through this process and answer questions on the information required.
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