The COVID-19 pandemic itself won't stop the Whitsunday rent review dates arriving in May and the current amnesty for tenants' improvements coming to an end on 12 June, but there has been recognition from Bob McIntosh, the Tenant Farming Commissioner, that these events do not sit particularly well with social distancing and self-isolation.
The TFC (in association with NFUS and SLE) has advised that face-to-face farming meetings should be avoided to comply with current COVID-19 regulations and Government guidance.
Instead, landlords and tenants are encouraged to use other communication methods (such as phone calls and video-conferencing) and if these are not appropriate, to delay rent review and tenants' amnesty discussions until after the restrictions have been lifted or relaxed.
The challenge of course, is that an inspection or on-site meeting may be required.
Spring rent review
The TFC recommends that only the most straightforward of Whitsunday rent reviews should be conducted and face-to-face meetings should not take place.
The 2020 spring rent review was underway long before the COVID-19 pandemic arose, with notices being issued a year ago to initiate the process.This is however, only a recommendation and parties may nevertheless wish to proceed as the legislation permits.
One difficulty is knowing what impact these extraordinary events may have on agriculture and rents. That in itself may be an argument for postponing. A lot will depend on where rent currently sits and how much time and effort parties have invested in the current rent review process.
Most spring rent reviews will be agreed well in advance of the 28 May deadline, with parties able to move on to complete the rest of their spring work without giving it further thought.
However, in instances where parties have not settled reviews before 28 May (or the relevant Whitsunday date in some older leases) and are failing to find common ground, the issue may need to be referredto the Land Court under the Agricultural Holdings (Scotland) Act 1991.
This is always a last resort and negotiations often continue in tandem with the application to the Land Court.
If rent reviews are not agreed before the Whitsunday rent review date and no application is made to the Land Court for determination, the legislation is clear – the rent review notice that was served will be treated as spent and a rent review cannot be conducted until next year.
It is not within the power of the TFC to extend the Whitsunday rent review deadline and any landlords and tenants who have not yet reached agreement on this should keep the legislative backdrop in mind and act in accordance with this and the guidance published by the TFC.
For parties who decide to abandon the current rent review and re-serve notices to preserve the opportunity for next year, be aware of potential postal disruption. If necessary, service by Sheriff Officers may be the most reliable way to deal with it, unless the parties are able to come to an arrangement between them to deal with personal service, which is acknowledged by the other party.
Tenants' amnesty
Landlords, tenants and their agents are encouraged to take a reasonable approach to finalising amnesty discussions – especially where a farm inspection is needed to complete these – and to do so in line with Government guidance on social distancing and self-isolation.
The TFC recognises that this means a schedule of improvements may not be agreed until after the end of the amnesty period. Landlords and tenants are asked to agree in writing that they will work to finalise any amnesty claims after 12 June if necessary. If this extension cannot be agreed, it should be reported to the TFC.
Given the terms of the amnesty legislation (set out in the Land Reform (Scotland) Act 2016), the amnesty period will end on 12 June.
The legislation is clear that either an amnesty agreement must be entered into or an amnesty notice served before that date, or the opportunity provided by the 2016 Act is lost.
The TFC is recommending the parties consider putting in place a contractual agreement to comply with the amnesty provisions beyond 12 June. However, this is a non-statutory approach; contractual agreements are personal to the parties and do not bind successors.
Even with the strongest drafting will, the remedies available to the parties - should negotiations fail - will be limited to the terms of this contract.
Short of legislative intervention, landlords and tenants may be vulnerable to the limitations of contract and we recommend that this is taken into account by parties looking to achieve successful resolution of ongoing amnesty discussions (if they are to extend beyond 12 June).
With that in mind, the only guaranteed steptowards obtaining the full benefit of the statutory process is to put an agreement in place or serve a notice by 12 June.
Notably, the Scottish Tenant Farmers Association has asked Cabinet Secretary for Rural Economy and Tourism Fergus Ewing to extend the amnesty period for a further six months.
Legislative options are being explored but approval of any extension is not guaranteed.
What should you do?
Parties affected by the TFC's latest recommendations on Whitsunday rent review and the tenants' amnesty should be aware that this does not change the terms of the legislation that set out the rules on these topics.
At the time of writing, there has been no legislative change to these deadlines and procedures. For parties dealing with these processes at this difficult time, seek professional advice to ensure that deadlines are not missed and the procedures followed are robust.
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