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What to Know About Scottish Commercial Property Leasing

If you have bought and leased property in England before, you might think that it is a similar process to do so in Scotland. However, Scots property law is a different discipline, and anyone wishing to buy property or to lease a commercial property will need to know some of the variations in the law that could apply to them here. Let’s take a closer look at some of the main differences between Scots and English property leasing that you might encounter.

No Exchange of Contracts

In Scotland, the terms of the lease being agreed are done by an exchange of letters – known as missives – between the solicitors of the parties rather than the exchange of contracts that we typically see in England. The missives will consist of an Offer to lease (Issues on behalf of the landlord) which incorporates the agreed form of the lease and a concluding letter (Issued on behalf of the Tenant.  The concluding missives will set out the date from which the terms of the lease will come into full force and effect.

While both parties will still need to sign the lease, the terms of the lease are fully legally binding even if this does not happen once the missives have been concluded.

Security of Tenure

Commercial landlords in England will no doubt be familiar with the Landlord and Tenant Act 1954, as this gives their business tenants security following the contractual expiration of their lease. When moving to Scotland, it is important to remember that this Act does not apply. There are few automatic renewal rights awarded in Scotland to tenants.  Generally, there is no common law or statutory right to renew a Scottish commercial lease.  Once valid notice has been given in accordance with the lease (generally 40 clear working days) the lease will come to an end.

Landlords, however, must be aware of tacit relocation. If neither party has served a notice period prior to the contractual expiration date of the lease, the lease will automatically continue using the same terms and conditions for another year.

Forfeiture

In Scotland, a landlord of a commercial property forfeit (bring to an end) the lease for a monetary breach unless it has first given fair warning and the debt has still not been paid.

The law requires the landlord to serve notice on the tenant which:-

·       requires the tenant to pay the sum due, together with any interest on that sum in terms of the lease, within 14 days; and

·       states that if the tenant doesn’t comply, the lease may be terminated.

Only if the sum demanded has not been paid within the notified period can the landlord proceed to terminate the lease

In the event of a non-monetary breach it is even less likely that you can bring the lease to an end especially if it is deemed that a fair and reasonable landlord would not do so.

Find a Qualified Solicitor

These are just some of the differences that can be seen between the commercial leasing systems in England and Scotland. If you are more familiar with the English system but wish to enter the Scottish markets, it is important that you find an experienced solicitor to work with. MM Legal has a team of experts with years of knowledge and experience in Scottish commercial leasing and many other aspects of property law. Get in touch today for advice in this sector.