Coronavirus: protection from termination of commercial leases in Scotland - update

Landlords hoping for protections for commercial tenants that were introduced by the Coronavirus (Scotland) Act 2020 (see our article from April 2020) earlier this year to be lifted are set to be disappointed.

The Act protects commercial tenants who lease property in Scotland from termination for non-payment of rent by extending the usual pre-irritancy notice period set out in the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 from 14 days to 14 weeks.

The provisions are contained in Part 1 of the Act which is due to expire on 30 September 2020. However, the Act allows for this period to be extended by regulations approved by the Scottish Parliament, if required, first to 31 March 2021 and then to 30 September 2021.

Government set to extend protection for commercial tenants

The Scottish Government has taken the decision that, subject to the agreement of the Scottish Parliament, Part 1 of the Act should be extended to 31 March 2021. The Scottish Government has laid draft regulations to amend the expiry date of the Act. However, this extension will not include all provisions in the Act which are currently in place.

Alongside the regulations to extend Part 1 of the Act, the Scottish Government also laid a separate set of regulations to expire certain provisions on 29 September 2020 so they will not be covered by the extension. The extension regulations have not yet been made into law but the expiry ones have and the provisions extending the usual pre-irritancy notice period set out in the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 from 14 days to 14 weeks are not going to expire early on 29 September and will therefore be extended to 31 March 2021 when Parliament pass the extension regulations.

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Landlords and tenants should seek advice if they are concerned about what this means for them so that their rights and responsibilities can be explored.