News In Focus
26 July 2007
Rent failure enforced against farm tenant
A tenant farmer has lost his appeal against termination of his lease for non-payment of rent.
The Court of Session ruled today that a clause allowing his landlords to end the lease "forthwith" if "the tenant... allows one half year's rent to remain unpaid for one month after it has become due", was not void under the Agricultural Holdings Acts.
Robert Downie of Leswalt, Wigtownshire, had allowed his rent due at Martinmas (28 November) 2004 to remain unpaid as at 28 December. His landlords, who had given him a warning after he was late with his previous rent payment, then terminated the lease by notice of irritancy.
The Scottish Land Court ruled that there was no reason why the clause should not be given effect. Mr Downie appealed, arguing that the clause was void because it would prevent a tenant claiming compensation for "high farming" - as notice of a claim has to be given a month before the end of the lease - even though there was no prospect of his making such a claim.
Lord Justice Clerk Gill, who gave the leading judgment, said that as termination under the irritancy did not exclude or curtail any claim for compensation by the tenant, Mr Downie could only succeed if the clause was void from the outset.
Mr Downie relied on section 53(1) of the Agricultural Holdings (Scotland) Act 1991 as protecting rights to compensation unless there was express provision to the contrary. However in Lord Gill's opinion the section should be read as meaning that the clause was valid, but if a landlord tried to enforce a clause so as to prevent a tenant claiming compensation, the clause would be unforceable to that extent only.
Lord Gill added that although the clause gave the landlords the power to terminate the lease forthwith, it did not prevent them from terminating it at a deferred date so as to preserve any claim to compensation.
The court's decision can be read at http://www.scotcourts.gov.uk/opinions/2007CSIH62.html .