Agricultural tenants warned over withholding rent

Posted by LindaStenner on May 21, 2020

Agricultural tenants warned over withholding rent

May 21, 2020 at 9:40 AM

Tenant farmers adversely affected by the coronavirus pandemic are being advised that they must still pay their rent if they have been served with a two months’ notice to pay despite adjustments made to possession legislation in the Coronavirus Act.

Addressing an online seminar organised by The Royal Institution of Chartered Surveyors (RICS) Philip Meade of Davis Meade Property Consultants said Civil Procedure Rules (CPR) 55 amended by Practice Direction 51z to stay any possession proceedings by a landlord for at least 90 days will not remove the risk of not paying rent for an Agricultural Holding Act (AHA) tenancy after a notice to pay has been served.

Mr Meade was a panellist on the RICS seminar looking at considerations for agricultural tenancies and longer-term impacts for the agricultural sector from COVID-19.

He pointed out that the Practice Direction strongly advised landlords however, not to commence new proceedings.

Non-payment of rent for a Farm Business Tenancy (FBT) is usually dealt with by forfeiture which may be harder during the Covid crisis.

He also said agricultural rent levels had not noticeably been affected by Covid yet, as Brexit is still the main concern although Covid may feed in later in the year following the drop in some commodity prices such as potatoes and fall in demand for milk and beef.

“The long term effects are yet to be seen but we are aware that some applications for arbitration have already been made following rent notices served Lady Day (March 25) and there is considerable uncertainty where these reviews may end up,” Philip Meade said.

He also explained that Covid 19 restriction will have an impact for accessing holdings. Normally landlords are permitted to access holding “at all reasonable times” under section 23 of Agricultural Holdings Act 1986 (AHA) and although access under FBTs will usually be contractual, reasonableness will nearly always be a criteria here as well.

“Vulnerable tenants, either due to age or medical conditions, can reasonably expect landlord not to insist on access during Covid 19 lockdown especially onto farmyards or into the farmhouse,” Mr Meade said.

Inspecting land, with usual prior notification, is unlikely to be such an issue as long as done sensibly, but travelling long distances to inspect holding may not be considered an essential journey by the authorities and should probably be avoided.

“It is also clear that tenants may struggle to get tradesmen on site during the lockdown which could have implications for Notices to do repairs/notices to remedy etc.

In such instances the AHA does allow for an arbitrator to extend time for a notice to remedy where work is required such as repairs, but tenants will still need to apply for an arbitrator,” he said.

With regards to Alternative Dispute Resolution Covid had not yet affected appointments or Interlocutary matters (preparations for hearings etc) but this is starting to happen.

“It is difficult to get witness statements, experts reports and preliminary hearings arranged, although telephone hearings are possible,” he said.

“Hearings are unlikely to take place before social distancing relaxed although they will be possible in theory with proper precautions.

“In the majority of ongoing cases I am involved with as an arbitrator, the parties have asked for an extension of time, so delays will be inevitable and in the current climate, it would be unusual not to grant such a request, although every case is different,” he added.

Philip Meade can be contacted via the Oswestry office of Davis Meade Property Consultants telephone 01691 659658 email philipmeade@dmpcuk.com

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