Serving a notice under a commercial lease in Scotland (whether it be a break notice or another type of notice with consequences for landlord and tenant) can be a somewhat nerve-racking experience for managing agents and solicitors. Disputes about whether notice has been validly given can, and frequently do, arise. This is especially true in difficult market conditions.
The detailed notice provisions found in commercial leases are supposed to help. In Scotland, unlike in England & Wales, there is little in the way of legislation governing the service of notices under commercial leases (certain exceptions aside – such as the rules in relation to service of pre-irritancy warning notices). In most instances, parties must look, first, to the common law and, secondly, to the terms of their lease.
At common law, actual physical receipt of a notice is required. Putting a notice in the post, for example, is insufficient. The risk that a notice is not received by the recipient is assumed by the giver. Most commercial leases will seek to reverse this by including 'sufficient service' and 'deemed service' provisions. The general purpose of these provisions is to place the risk of non-receipt onto the recipient of a notice rather than the giver.
A typical 'sufficient service' provision will say that it is sufficient for the giver to send a notice by recorded delivery post to the recipient's registered office or some other specified address. To prove that service has occurred, the giver need only establish that the notice was indeed sent by recorded delivery post to the specified address. It need not prove that it was actually received.
Similarly, a 'deemed service' provision will provide the parties with certainty as to when service is deemed to have taken place. This is typically 48 hours after the date of posting. If a deemed service provision is engaged, it is not open to either party to argue that service has actually taken place at some other time (whether earlier or later).
Beware of 'sufficient service' or 'deemed service' provisions which are said to apply "unless the contrary is proven". Provisions of this type create uncertainty and can give rise to disputes about if and when a notice was actually received.
Finally, in many instances it is not actually a mandatory requirement of a lease that the giver of a notice follows the 'sufficient service' or 'deemed service' provisions - but a party which fails to do so runs the risk of having to prove that a notice has actually been received. And that is rarely straightforward.
If you require advice in relation to a notice under a commercial lease, please do not hesitate to get in touch with our Real Estate Disputes team or your usual Brodies' contact.