Sean Fraser, an Associate in Holmes Mackillop solicitor’s commercial property team, says that the proposed repeal of the Tenancy of Shops (Scotland) Act 1949 will have implications for landlords and tenants.
The Act enables shop tenants served with a notice to quit to apply for a lease renewal for up to a year with no limit to how many times this can be exercised. The proposed repeal of the Act would remove statutory protection for shop tenants.
Fraser said that, from a landlord’s perspective, the repeal would give the landlord a greater ability to regain possession of the premises at the end of the lease term, by serving a notice to quit, without the need to have regard to the provisions of the Act, or indeed, to strengthen a landlord’s bargaining position in the case of negotiating terms for a lease extension with the tenant.
“The repeal may enhance the appeal of commercial properties to investors who are looking for greater control and flexibility in terms of a lease,” he said.
“Tenant’s will no longer have a right of renewal at the end of the term, which may impact long-term business planning, as tenant’s will be left to negotiate extension terms with their landlord.”
Fraser recommended that tenants should consider negotiating stronger, more favourable lease terms at the outset of a deal to minimise any risks associated with the absence of statutory renewal rights.
Holmes Mackillop regularly advises retail landlord and tenant clients in negotiating commercial leases.
