On 31 March 2020, the Scottish Parliament announced the introduction of The Coronavirus (Scotland) Bill.
Intended to supplement the Coronavirus Act 2020, which was passed by the UK Parliament on 25 March 2020, the Bill introduces temporary, proportionate measures designed to relieve the financial pressures faced by private, social and commercial tenants because of the COVID-19 outbreak.
Irritancy in Scotland: Update for Commercial Landlords
Most standard commercial leases will include an “irritancy” clause entitling the landlord to terminate or ‘forfeit’ the lease in the event of non-payment of rent or other monies due. Irritancy protection provisions are contained in the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 and provide 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.
As part of a series of protective measures introduced by the Scottish Parliament, the new Coronavirus (Scotland) Bill will extend this notice period so that landlords will now be required to give at least 14 weeks’ (as opposed to 14 days’) notice to tenants before being able to terminate a commercial lease for non-payment of rent. In terms of the new legislation, this extended notice period will apply irrespective of whether a notice has already been served, provided the original 14-day period has not already expired.
Position in England & Wales
The introduction of these new measures comes after the announcement of the UK Government’s suspension of a landlord’s ability to exercise its right of forfeiture against a business tenant that is unable to pay rent because of Coronavirus. This equivalent protection, which applies to England, Wales and Northern Ireland, will last until 30 June 2020, subject to any further extension by the government, and will ensure that no commercial tenant is evicted over the next three months because of non-payment of rent.
While these new measures are intended to provide reassurance to business tenants struggling with rental liabilities, the UK Government is also actively monitoring the impact on commercial landlords’ cashflow and intends to continue its dialogue with them.
Alyson Shaw is a solicitor in Shepherd and Wedderburn’s property and infrastructure disputes team. For more information, contact Alyson on 0131 473 5695 or at alyson.shaw@shepwedd.com.