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Lawbite: The clocks change but darker days for tenants in Scotland

  • United Kingdom
  • Real estate
  • Real estate dispute resolution
  • Real estate litigation - LawBite

30-03-2022

The end of March signals an end to the pandemic-related protections in place for commercial tenants in Scotland. From 1 April 2022 landlords will be able to employ any of the pre-pandemic options to recover arrears under a lease. This means:

  • the period of notice required before a landlord can irritate (terminate) a lease for a financial breach reverts from 14 weeks to 14 days (unless a longer period is specified in the lease)

  • the full range of summary diligence options are available, enabling landlords of properly registered leases to arrest (freeze) assets held by a third party, such as bank accounts, to attach and sell goods owned by the tenant and to attach and remove cash

  • court actions can be raised in the usual way

  • there are no additional restrictions on winding up and insolvency of tenants

Whether landlords will rush to use the newly regained powers remains to be seen but having more options than has been the case for what feels like a long time will no doubt be welcome. However, the Commercial Rent (Coronavirus) Bill will not apply in Scotland, so there will be no compulsory arbitration for covid-related arrears.

Key points

  • landlords can now seek to irritate a lease if arrears remain unpaid for 14 days after service of pre-irritancy notice

  • summary diligence has not been restricted recently and is often the go-to option for landlords; that is likely to continue

  • the new English legislation for dealing with covid arrears will not apply in Scotland