10th February 2014

Commercial Leases in Scotland

If you are considering entering into a commercial lease in Scotland, you may have a few queries that need answering. To help you find the information you are looking for, we have compiled some of the most frequently asked questions encountered by our solicitors:-

1. What is a commercial lease?

A commercial lease is when a landlord (the lessor) allows a tenant (the lessee) to rent his premises for business purposes. The lease is the contract which sets out the terms and conditions of the agreement, clarifying each party's rights and responsibilities.

2. How long does a commercial lease last?

Details such as the duration of the lease will be included within the terms of the lease itself; it may, therefore, be anything between a few months to twenty years. The maximum amount of time is 175 years. However, it is important to remember that there are ways of terminating a lease early, should you wish.

3. Who is responsible for repairs?

Again, this will be defined by the terms of the lease. Typically, a tenant will be responsible for general maintenance and repair works.

4. Does a tenant have any other responsibilities or costs?

A tenant may also have to pay a service charge to cover the costs of maintenance elements such as cleaning. They may also be obliged to ensure health and safety regulations are enforced, while it is likely a tenant will have to pay a sum for dilapidations at the end of the lease.

5. How do you end a lease?

If you wish to end your lease on the specified date, you need to give the agreed amount of notice. Otherwise your lease could be automatically renewed. Alternatively if you wish to terminate the lease early, a tenant has a number of options available. For example, you can ask the landlord to surrender the lease or wait until there is a break clause which offers you the chance to end the lease before the specified date. Or you can explore the possibility of assignation or subletting. A landlord on the other hand cannot terminate a lease early unless the tenant has broken the terms of the contract.

6. What is assignation and subletting?

Assignment of the lease sees the tenant transfer the remainder of the lease to a third party. A sublease on the other hand is when a tenant leases their interest in the property to a third party, thereby becoming a 'mid-landlord'. This differs to assignment as the original tenant is still bound to the terms of the lease, as there become a hierarchical chain between the landlord (the owner), the tenant and the subtenant.

7. Can a tenant be evicted?

If your tenant breaks a clause of the lease - for example, by failing to make rental payments in full and on time - then it can be possible for the landlord to forfeit the lease and evict a tenant from the premises.

8. Where can I find further advice?

If you would like further advice from a legal professional, contact us at Blackadders and speak to one of our specialist solicitors.

For more information, simply call us on 01382 229 222 (Dundee) or 0131 222 8000 (Edinburgh) or complete the enquiry form on the right of this page and we will be delighted to help you.

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