Shropshire Farming Talk: Notice to Quit Following Notice to Pay – Agricultural Holdings Act 1986
Where a tenant, with a tenancy agreement governed by the Agricultural Holdings Act 1986, has failed to pay his rent on the due date, a landlord can serve a notice to pay.
Following two months from the service of the notice to pay, if the rent due remains unpaid, a landlord is entitled to serve a Case D Notice to Quit.
The notice to pay should only demand the rent that is due and not any other sums owing. Set-off is permitted if the tenant has a valid claim and therefore the landlord should consider whether set-off applies when determining the sum demanded.
The sum should be due and owing as at the date that the notice to pay is served. If the notice to pay is served before the sum demanding is owing, then the notice is not valid.
If the notice is however dispatched before the date that the rent is due, but received and as such served, after the rent has become due then the notice is valid.
The notice to pay should be in the prescribed form or a form substantially to the same effect, including the accompanying notes.
The notice must clearly demand payment within two months, be given by or on behalf of the landlord and in the case of joint tenants be addressed to all of them and also served on all of them.
If the tenant can show that the landlord has been willing, in the past, to accept payment via a cheque, then as long as the cheque is posted on or before the due date, even if it is received later, the payment is deemed to suffice. Payment in this case will be deemed to have been made from the moment of posting as long as the cheque is honoured when presented.
The validity of a notice to pay cannot be disputed by a tenant. The tenant must either comply or run the risk of disputing the validity at the notice to quit stage. Failure by a tenant to defend his position at this stage will result in the notice to quit being upheld and the loss of the tenancy.
The notice to quit must state that it has been given due to the tenant’s failure to comply with the notice to pay. If a tenant wishes to dispute the validity of the notice to quit he must give a demand for arbitration within one month. Failure to do so results in the tenant being statute barred from challenging the notice to quit. The only challenge he can then make is in relation to the common law validity of the notice. Within 3 months from the demand for arbitration the tenant must also then secure the appointment of an arbitrator.
In light of the above, it is advisable for a tenant to seek advice in relation to a notice to pay as soon as the notice is received. It is best practice to comply with the notice to pay and to then seek to recover costs rather than running the gauntlet with the challenge in relation to a notice to quit. If the tenant is aware that the rental sum demanded is correct, payment should be made as early as possible and in a manner that ensures the payment is received and acknowledged by the landlord. If a tenant is posting the payment, accurate receipts and documentation to record the method of service should be retained.
For further information and guidance in relation to a notice to pay or notice to quit under Case D please contact me at kathrynwilliams@dmpcuk.com
Kathryn Williams, Davis Meade Property Consultants.
