Landlords and tenants must communicate and work together to ensure rent payments are made, as government support looks set to wane.
The latest guidance allows tenants to move residences and landlords to put empty properties back on the market, although all viewings and moves must take place safely and in line with current social distancing measures.
The change has left tenants who are still struggling from the financial effects of the pandemic concerned they could be vulnerable to rent demands.
The Coronavirus Act 2020, published in March, prevented landlords from evicting tenants struggling to pay rent because of the pandemic for a period of three months.
This protection is due to end in June and an extension has not yet been granted, even though ministers have extended the three-month mortgage holiday for homeowners.
As the government has also not acted on plans to abolish “no-fault” evictions, some tenants fear landlords could issue a Section 21 notice to end their agreement.
Farm tenancy issues
The Coronavirus Act will not protect Agricultural Holdings Act (AHA) tenants after a notice to pay has been served, says Philip Meade of Davis Meade Property Consultants.
Non-payment of rent for a farm business tenancy is usually dealt with by forfeiture, the legal process a landlord has to go through if the rent has not been paid.
This may be harder during the coronavirus crisis because it is a court procedure and the courts have either been closed or are operating on a limited basis.
“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 on Lady Day [March 25] and there is considerable uncertainty about where these reviews may end up,” Mr Meade said.
Meanwhile, tenants, especially vulnerable ones, should reasonably expect their landlord not to insist on access to the holdings during the lockdown, he said.
However, inspecting land, with the usual prior notification, is unlikely to be an issue.
“It is clear that tenants may struggle to get tradesmen on site during the lockdown, which could have implications for notices to do repairs or notices to remedy,” Mr Meade said.
“In certain instances the AHA does allow an extension, but such an extension can only be granted by an arbitrator so the tenant will still need to apply for an arbitrator and make their case.”
Arbitration hearings are unlikely to take place before social distancing rules are relaxed further, and while Mr Meade said it would be unusual for an extension request to be denied in the current climate, delays were inevitable.
Calls for rent reductions in Scotland
Tenant farming commissioner Bob McIntosh has advised landlords and tenants in Scotland to think carefully about the timing of rent reviews, given the coronavirus lockdown constraints and uncertainty over the sector’s future economic condition.
“Landlords and tenants are advised to postpone rent reviews, unless these are likely to be straightforward and can be concluded without the need for a face-to-face meeting,” Mr McIntosh said.
“It is important that no one feels pressurised to hold such a meeting until the lockdown arrangements are appropriately relaxed. If this means that a rent review has to be delayed, this is a small price to pay to ensure the continued health of the parties involved.”
Also concerned about a looming economic recession, the Scottish Tenant Farmers Association has asked Scottish Land & Estates to encourage landlords to withdraw existing rent notices, consider rent reductions and call a temporary moratorium on rent increases.
The association has already urged the Scottish government to progress a new rent test, based on the productive capacity of the farm, which would allow rents to be adjusted in light of economic conditions.
In response, Scottish Land & Estates said rent reviews should be conducted in line with sector guidance from the tenant farming commissioner, adding that communication between landlords and tenants was more important than ever before.
Sarah-Jane Laing, its chief executive, said: “We have evidence from landlords that they have been taking the impact of the Covid-19 pandemic into account in relation to rent reviews. In some circumstances, that has meant reviews being deferred or rents held at current levels. Any allegation of landlords acting unreasonably should be supported by transparent evidence and brought to the attention of the tenant farming commissioner.”