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Commercial leases in Scotland: What happens at expiry of the term?

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Published 29 September 2023

Overview

The status of a lease in Scotland at term expiry can be quite different to the position in England and Wales as there is no statutory renewal process north of the border. 

The default position is that a Scottish commercial lease automatically continues after its original contractual expiry date on the same terms, from year to year until either party gives notice.  This is known as "tacit relocation" and is rooted in the presumption that parties have impliedly consented to continuing the lease on a rolling annual basis. 

Either landlord or tenant can displace that presumption by serving notice ("notice to quit"), which  typically needs to be given at least 40 clear days before the lease expiry date (or the next annual rolling expiry date, if the lease is already rolling on tacit).  

It is common to see Scottish commercial leases continuing by tacit relocation for several years. Maintaining the status quo, with the flexibility of an annual rolling lease term, can be advantageous for both parties particularly in fluctuating market conditions. 

Commercial landlords and tenants who have an interest in bringing a lease to an end do however need to be mindful that the stated expiry date in a Scottish commercial lease should not be taken at its word.  If they want to avoid the lease continuing (and avoid being bound by the same terms for at least another year), then notice to quit should be served in order to trigger termination on that date. 

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