Aspects of leases

Commissioner

David Bartos

Team Member

Alastair Smith, Project Manager

The reform of proprietary aspects of leases is included in our Tenth Programme of Law Reform (paras 2.10-2.16). The project has proceeded 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.

Aspects of Termination

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 have drawn up provisional recommendations, and Parliamentary Counsel has 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 have helped us to refine our policy in certain important respects and required us to instruct adjustments to the draft provisions consulted on.  We anticipate that our final Report, including a final draft Bill, will be submitted to the Scottish Ministers and published on our website in late summer 2022.

As well as informing policy decisions, our analysis of responses to the Discussion Paper has 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 is evident that further work is necessary in order to come up with effective law reform proposals.  Due to constraints on time and resources, it is not possible for us to carry out that work at this stage.

For these reasons, our report will not contain recommendations in relation to either confusio or the Tenancy of Shops (Scotland) Act 1949.  We hope to return to both topics in a future phase of our work on leases.

Contact

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