3rd April 2020

Commercial property law update: Part 2 – Changes to irritancy provision in commercial leases

The Scottish Parliament have now introduced The Coronavirus (Scotland) Bill (intended to supplement the Coronavirus Act 2020) which brings into force some temporary measures, the purposes of which are to protect tenants (commercial, private and social tenants) as a result of the COVID-19 outbreak.

Whilst it is acknowledged that both commercial landlords and tenants alike are facing many challenges as a result of the COVID -19 outbreak, the current provision are in place to protect the position of the tenant.

It is common practice that standard commercial leases in Scotland will include an “irritancy” clause. The Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 is the current legislation that deals with Irritancy and provides that, where a landlord seeks to irritate the lease, at least 14 days’ notice must be given to the tenant before enforcement action can be taken.

The provisions of the Coronavirus (Scotland) Bill have extended this notice period and landlords will now be required to give at least 14 weeks’ notice to tenants before they will be in a position to terminate a commercial lease as a result of a tenant’s failure to pay the rent.

This new notice period (14 weeks) will apply regardless of whether or not a notice has already been served (but only as long as the 14-day period has not already expired, if the period has expired then this notice will still be valid). This means that where a landlord has served a pre irritancy notice for non-payment and the 14 day period has not expired then the landlord will not be able to serve a final irritancy letter bringing the lease to an end after 14 days but would have to wait for the 14 week period to expire.

The Bill does not prevent landlords irritating leases for non-monetary breaches and also does not prevent landlords from pursuing tenants by other means to recover arrears. The landlord will be required to act reasonably if they do wish to irritate the lease for these reasons, and give the tenant a reasonable amount of time to remedy such breach. In light of the current Government restrictions in place it would be wise to consider whether any such steps to irritate would be reasonable. It is also the case that the Courts are open on a very restricted basis and so from a practical point of view this would be something for a landlord to consider before pursuing.

So, subject to the above, irritancy notices could be issued but enforcing these by the usual process of an action of eviction, if the tenant did not vacate, would not be possible during the shutdown. It also would not be possible to instruct Sheriff Officers to pursue summary diligence for rent arrears during the shutdown.

Jennifer Davidson
Associate Solicitor

Commercial Property
Blackadders LLP

www.blackadders.co.uk

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