All commercial leases will have a natural end date. If you have a commercial lease that states its last day is, for example, 31 July 2022 you might assume that on 31 July you can simply hand the keys back to the landlord/collect the keys from the tenant and the lease will automatically end. 

In Scotland, in order to bring a commercial lease to an end a notice needs to be served to the other party that the lease will end. This notice is referred to as a notice to quit, and is required to prevent tacit relocation. The concept of tacit relocation is unlikely to be familiar to non-solicitors or solicitors from outside Scotland given it is a peculiarity of Scots law, but essentially it means if no notice to quit is served then tacit relocation will apply and the lease will continue for a further period of time beyond the end date. The length of the continuation depends on the length of the original lease but in most cases the lease will continue for a further year. If a notice to quit is again not served during the extension, the lease will be extended again and so forth until a valid notice to quit is served.

The lease is unlikely to specify that a notice to quit is required, nor how much notice needs to be given (in contrast to a break option which will set out exactly how much notice to exercise the break is needed). The absence of the information in the lease makes it easy to forget that a notice to quit is required in advance. The rules on the minimum notice required varies but for most commercial leases the notice period will be 40 days (which in reality means 42 days to allow for postage) and the notice provisions in the lease should be carefully checked to ensure that the notice is delivered in the correct manner. The current complicated nature of the rules on notice to quit and tacit relocation mean that parties often fall foul of the requirements and end up with the lease continuing beyond the end date. 

The Scottish Law Commission are carrying out a review to simplify the rules on notice to quit and tacit relocation and their final report is expected in late summer 2022.


Calum McKenzie