Covid-19: Commercial Leases – Irritancy

Business

5 years ago

Rollos Commercial team explain the changes to irritancy provisions within commercial leases under the current circumstances.

Irritancy provisions are included in the majority of Scottish commercial leases and outline the requirements which must be satisfied before a landlord can terminate the lease in the event of a breach of tenant obligations i.e. for non payment of rent.  

The Coronavirus (Scotland) Bill, passed by the Scottish Parliament on 1 April 2020 and granted Royal Assent on 7 April 2020, has extended the irritancy notice period for termination of commercial leases because of non-payment of rent from 14 days to at least 14 weeks. The Government also has the power to further amend these notice periods as they see fit during the Coronavirus pandemic.  

The extended period also applies to any notices which have already been issued but for which the 14-day period has not yet expired. In this case, 14 weeks’ notice must still be given before an eviction can take place.  

The irritancy rules for a non-monetary breach of the lease remain unchanged but require that a landlord act fairly. Accordingly, a “reasonable” period of time must be given to a tenant in order to remedy the non-monetary breach. It is therefore likely that the reasonable landlord would take the effects of Coronavirus measures into account before issuing an irritancy notice. In any event, under the current circumstances, landlords are unlikely to terminate a lease where rent continues to be paid as securing a new tenant at this time could prove difficult.