One less irritation for landlords? New decision reconsiders requirements for Pre-Irritancy Notices

A Sheriff Principal has recently departed from a previous court decision that notices served on tenants threatening irritancy for non-payment of financial obligations required to specify the periods during which the payments had fallen due.

In Inverclyde Council v McCloskey, the pursuers sought an order declaring that a commercial lease had been terminated by service on the defender of pre-irritancy and irritancy notices, and thereafter recovery of possession of the relevant commercial premises. After the pursuers obtained decree to that effect, the defender appealed to the Sheriff Principal on various grounds, including the purported invalidity of the pre-irritancy notice.

In the case of Scott v Muir 2011 S.L.T. (Sh. Ct.) 179, Sheriff Principal Stephen held that section 4 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 required that a notice served on a tenant following a non-payment irritancy event, in addition to specifying the sum not paid, a period within which the sum is to be paid (being not less than 14 days following service of the notice) and warning that the lease may be terminated if payment was not made, must specify the periods during which the rent arrears accrued. Her apparent reasoning was that a tenant cannot know what the landlord’s understanding of the arrears is unless the tenant knows the dates from which rent is said to be due and not paid.

However, Sheriff Principal Murray has departed from that view. His opinion is that a pre-irritancy notice simply requires to specify the bare essentials set out in the Act. Sheriff Principal Murray concluded that section 4 of the Act set out the minimum requirements for a notice to be served on a tenant by a landlord prior to irritating the lease, which were that the notice specified:-

1. the sum due but not paid;
2. that the tenant required to make payment within a period of not less than 14 days after service of the notice; and
3. that if the tenant failed to make payment within that period then the lease may be terminated by the landlord.

The purpose behind the Act was to prevent landlords taking advantage of an innocent omission by a tenant to pay a sum properly due under a lease by requiring notice of the non-payment to be given. That, in Sheriff Principal Murray’s view, is the clear finding by the Scottish Law Commission in their report number 75, “Irritancies in Leases”, which gave rise to section 4 of the Act.

He concluded that in order to extend the requirements of the Act further Parliament would require to legislate, and that it is not for the courts to create such further requirements. He did, however, express a view that there would be merit in including additional detail as to the calculation of arrears in pre-irritancy notices, also describing that as “best practice”.

The net result is that there are now competing decisions at Sheriff Principal level on the requirements for notices of irritancy. Whilst Sheriff Principal Murray’s decision draws a distinction between “requirement” and “best practice”, the existence of Sheriff Principal Stephen’s decision and the lack of a conclusive finding on the matter means that pre-irritancy notices not specifying the periods of arrears will, at least for the time being, remain open to challenge.

Given the importance of irritancy notices, and the potential ramifications of invalid notices, the lack of absolute clarity on this issue means that landlords should continue to take a “belt and braces” approach to pre-irritancy notices by specifying the periods during which the arrears accrued.

The full judgment of Sheriff Principal Murray can be read here on the Scottish Court Service website.

In the meantime, if you require any advice or assistance in relation to commercial tenancy disputes, please contact Andrew Upton on 0141 227 9522 or email [email protected].