When a landlord requires to terminate a lease because of a tenant’s failure to comply with its obligations under the lease, the landlord needs to follow the procedures for irritating leases set out in the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985. Compliance with the statutory provisions about the drafting and service of irritancy notices is essential, and the recent case of Stephen and Susan Scott v Graham Muir and Maureen Bain in Edinburgh Sheriff Court serves as a salutary reminder to landlords of the importance of strict observance of the statutory requirements.
Pre-irritancy notice
The case related to a pre-irritancy notice issued by the landlord’s agents to tenants in February 2010. The notice made two requirements of the tenants. It required the tenant ‘to make payment… of such rent and other monies totalling £7,800 together with interest thereon as provided for in the said lease’. The notice also stated that if “the tenants, do not comply with [the first requirement] said lease may, without in any way prejudicing our clients’ whole rights and remedies, be terminated on 11 March 2010.” (emphasis added)
The tenants claimed that the notice contravened the statutory requirements for a valid irritancy notice set out in the 1985 Act in three respects:
- The notice failed to specify the rental payments which the tenants had failed to pay;
- the notice also failed to specify the timeframe in which the tenants required to remedy their breach of the lease in order to prevent the lease from being irritated; and
- the tenants also argued that the notice was in breach of the statutory requirements by failing to break down the amount of rent due, with the reference to interest leaving the tenant unable to calculate the full amount of the payment required to avoid the lease being irritated.
For their part, the landlords argued that the notice did comply with the statutory requirements, and that in any event the notice passed the “reasonable recipient” test – in that a reasonable recipient of the notice would have understood and been able to act upon the requirements of the notice, particularly in light of the knowledge the tenants had of the amount of rent that was due.
The statutory requirements considered
The sheriff looked at the provisions of the 1985 Act and considered each of the tenants’ three arguments.
First, the Court found that the notice failed to meet the statutory requirement to specify the rental payments which the tenants had failed to pay. From the circumstances of the case, it was clear that there was confusion between the landlords and tenants in this case as to exactly what the rental arrears were, and what time periods they related to. As a result, it should have been made clear to the tenants by the landlords from the terms of the notice what arrears they required to pay to avoid irritancy, but this had not happened.
The sheriff then went on to consider the lack of a specified time period within which the tenants were required to make payment of the arrears. While the landlords argued that the second part of the notice provided a date – 11 March 2010 - by which the recipients would understand they must comply with their monetary obligations, presenting the notice in this way did not comply with the prescriptive requirements in the Act. Any notice must specify a period by which the tenant must make payment of the arrears, not just the date on which the lease may be terminated if they fail to do so.
Finally, the failure to break down the amount of interest due in the notice was also in breach of the Act, and another feature of the general lack of specification in the notice. There was no genuine prospect of the tenants being able to properly calculate the amount of interest due with the information provided in the notice.
As a result, the case was decided in favour of the tenants, concluding that the pre-irritancy notice was invalid. The sheriff was critical of the ‘somewhat formulaic approach of the notice’, and made clear that the courts will take a dim view of unspecific statements such as ‘together with interest thereon’.
Clear and precise information required
This case therefore provides a clear reminder of a landlord’s obligations when issuing a pre-irritancy notice, and the crucial importance of ensuring the notice complies with the statutory requirements.
In summary, pre-irritancy notices must contain certain elements and should:
- Set out clearly what specific periods of rent are in arrears;
- Provide a clear date by which payment must be received; and
- Break down the amount of arrears and calculate exactly the amount of any interest which is due in respect of each amount.
To read the decision in Stephen and Susan Scott v Graham Muir and Maureen Bain click here.