Law commission

Scottish Law Commission recommends review of rules to end commercial tenancies

The Scottish Law Commission has recommended a new set of rules for the termination of leases of commercial property in Scotland, replacing the existing common law of tacit relocation.

Today, the tacit renewal – automatic continuation of a lease at the end of the period for which it was granted if appropriate notice has not been given (or if the tenant remains without moving procedure) – falls under of common law.

The parties to a lease may be unaware that the law requires notice for the lease to end when this period expires.

It is unclear whether the current law allows parties to contractually waive the obligation to give notice. The current law also does not provide clear and certain answers to the questions relating to the form that such notice must take or to the effect of a sublease on the tacit move and the need for notice.

The commission recommends replacing the common law of tacit resettlement with a modern, statutory code of automatic continuation. The new code sets out clear rules on whether notice is required, the required content and timing of notice, and the effect of automatic continuation of a lease. It also clarifies that the parties to a lease can agree that the lease will end on a specific date without the need to give notice.

In addition, the commission is recommending a number of technical changes to the requirements for service of other documents that have the effect of terminating a lease, including irritability notices.

David Bartos, lead curator of the project, said: “The common law of unspoken relocation is unclear and uncertain. Our new Automatic Continuation Scheme will bring clarity and certainty to landlords and tenants and increase the attractiveness of investing in commercial property in Scotland.