Aspects of leases: Termination

Commissioner

David Bartos

Team members

Alastair Smith, Project Manager
Daniel Buchan, Legal Assistant

Latest News

We published our report on Aspects of Leases: Termination (SLC No 260) in October 2022. This was accompanied by a final draft Bill. A Business and Regulatory Impact Assessment, a summary and news release are also available.

In a letter from the Scottish Government dated 5 September 2023 the Commission was advised that officials within the Government would begin detailed work on the 2022 Report. The response of the Chair of the Commission can be seen here.

The Leases (Automatic Continuation etc.) (Scotland) Bill has now been included in the Scottish Government's Programme for 2024-2025. The Bill is intended to implement the recommendations made by us.

Background

The reform of proprietary aspects of leases was included in our Tenth Programme of Law Reform (paras 2.10-2.16). The project is proceeding in stages, focusing on those areas of the law which are most in need of reform. We have concentrated primarily on commercial leases, since residential, agricultural, crofting and allotment leases are already subject to significant statutory regulation.

Following an initial scoping exercise, assisted by contributions from members of our Advisory Group at a meeting in September 2017, we have considered issues relating to the termination of leases.

A Discussion Paper was published in May 2018. It includes chapters on tacit relocation, notices to quit, apportionment of rent, the Tenancy of Shops (Scotland) Act 1949, irritancy, and the doctrine of confusio. The consultation closed on 14 September 2018, and we are very grateful to all those who contributed. The responses received were both valuable and varied, and have helped us to formulate our policy as to how a commercial lease ought to be terminated at its ish (termination date) and the circumstances in which the law should automatically extend its duration. With the help of our Advisory Group, we had drawn up provisional recommendations, and Parliamentary Counsel had prepared a draft Bill to give effect to them.

A version of the draft Bill was published for consultation in December 2021, together with a consultation document and explanatory notes. Comments were invited by 28 January 2022, and again we are grateful for the responses received. These helped us to refine our policy in certain important respects and required us to instruct adjustments to the draft provisions consulted on.

As well as informing policy decisions, our analysis of responses to the Discussion Paper helped us to identify areas of the law which will require further consideration. With respect to the doctrine of confusio, a lack of consensus emerged as to both the existing law and the measures of reform required. With the assistance of our Advisory Group, we have worked on developing a scheme which would allow a “shadow lease” to survive in limited circumstances where the tenant acquires the landlord’s interest in the let property. However, any future law reform project will require to carry out further consultation before making any recommendations in that regard.

Similarly, responses to both the Discussion Paper and a mini-consultation carried out amongst retail stakeholders highlighted a lack of consensus surrounding the Tenancy of Shops (Scotland) Act 1949. While respondents to the Discussion Paper generally favoured its repeal, retail stakeholders did not support this approach, and suggested that the Act should either be reformed to bring it into line with its original objective of protecting small businesses or remain as it is. It was evident that further work is necessary in order to come up with effective law reform proposals. Due to constraints on time and resources, it was not possible for us to carry out that work at this stage.

For those reasons, our 2022 report does not contain recommendations in relation to either confusio or the Tenancy of Shops (Scotland) Act 1949. We are working on recommendations in relation to the 1949 Act which might be added to the Bill implementing the 2022 Report. Further information is on a separate project page.

Contact

If you require further information about this project, please email info@scotlawcom.gov.uk.