When a Landlord and a Tenant enter into an agreement to lease a commercial property in Scotland one of the key elements is the duration of the lease, or the ‘term’. There will always be reference to a term start date (or ‘Date of Entry’) and a term end date (or ‘Expiry Date’) within the lease agreement.At the start of the Lease, the end date may seem like a distant event, but a Tenant (or a Landlord) may be caught out at the end date, due to the unusual doctrine in Scots Law known as ‘tacit relocation’. This doctrine provides that commercial leases will not automatically end on the end date specified in the lease.
In fact, the principle of tacit relocation is quite the opposite and works on the presumption that if neither party indicates to the other of their intention to end the lease, (and the original lease term was for one year or longer) then the lease will automatically renew for another year on the same terms and conditions, and from year to year thereafter until one of the parties serves notice on the other party of their intention to bring the lease to an end.
Bringing a lease to an end is not as simple as emailing the other side a week before the end date of the lease. There is a lot more to consider.
There are certain timeframes which, depending on the length of your lease, you must follow to ensure a valid notice is served on the appropriate party, at the appropriate address within the appropriate amount of time.
It is therefore crucial for any party entering into a lease, that they seek the right advice at the onset from a specialist commercial law practitioner who can assist in providing the right legal knowledge and expertise on all leasing matters and particularly on how to avoid the pitfalls of tacit relocation.
Call our team to discuss further if this applies to you.
Our experienced team are here to provide you advice and guide you through the often complex area of business contracts, in a simple and straightforward manner.
Our experienced team are on hand to advise you how to structure your company and can also assist you with ongoing company administration.