In a recent decision, the Outer House of the Court of Session found in favour of the landlord in an action against their tenant, Amazon UK Services Ltd (“Amazon”). The Court held that the notice to quit issued by the landlord (M7 Real Estate Investments Partners VI Industrial Propco Ltd) was valid, terminating the lease between the parties and requiring Amazon to remove from a warehouse in Gourock which they occupied under the lease.
Was one year or 40 days’ notice required?
Amazon challenged the action on the basis that the notice to quit had been issued approximately 6 months prior to the end of the lease. Amazon argued that under Section 34 of the Sheriff Courts (Scotland) Act 1907* (“the 1907 Act”), at least one year’s notice was required. The landlord contended that under the common law only 40 days’ notice was required and thus the notice was valid.
*Note - Section 34 of the 1907 Act only applies to leases concerning land in excess of 2 acres
The decision
The point at issue before the Court was whether Section 34 of the 1907 Act materially altered the common law of tacit relocation (i.e. a Scottish legal concept by which a commercial lease automatically renews unless terminated by 40 days’ written notice) or merely sits alongside it.
Amazon argued for the former position. However, finding in favour of the landlord, Lord Ericht held:
“In my opinion the well-established common law on tacit relocation is not substantively replaced by such unclear statutory drafting. Rather, the proviso supplements the common law of tacit relocation by setting out how tacit relocation is to apply when the new statutory procedure is used.”
What can be taken from this decision?
In the short term, the decision lends support to commercial landlords or tenants who find themselves issuing a notice to quit less than one year prior to the end of the lease. However, it remains good practice to give one year’s written notice where possible.
It is anticipated the decision is likely to be appealed.
If you require advice in connection with any of the topics raised in this article, please contact our property litigation team (and best not ask Alexa).
