review a commercial lease
The single most important difference between Scotland and England is that a Scottish commercial tenant has no statutory right to renew. When the lease ends, it ends, and the premises go back.
No security of tenure
The Landlord and Tenant Act 1954, which gives business tenants in England and Wales a right to a new lease, does not apply in Scotland. A Scottish commercial lease confers no right of renewal at all. Whatever goodwill or fit-out you have built up in the premises, the landlord may simply refuse to renew. Everything about how you negotiate the term follows from that.
Tacit relocation
If neither party gives proper notice before the end of the term, the lease continues automatically on the same terms, usually for a further year. This doctrine is called tacit relocation and it operates whether or not anyone intended it.
The notice periods are technical, they depend on the type of subjects and the length of the lease, and a defective notice is simply ineffective. Tenants have been landed with an unwanted further year through nothing worse than a late letter. A Bill to reform this area was introduced and then withdrawn in 2025, so the old common law rules continue to apply, technicalities intact.
Full repairing and insuring
Most Scottish commercial leases are full repairing and insuring. The obligation is usually to keep the premises in good and substantial repair regardless of their condition when you took them, which can mean handing back a building in better order than you received it. A schedule of dilapidations at the end of the lease is the moment this becomes expensive.
The protection is a schedule of condition, photographed and annexed to the lease, limiting your obligation to the recorded state. Negotiate it before you sign, because you cannot negotiate it afterwards.
Irritancy
Irritancy is the landlord’s right to terminate for breach, and it is the Scottish equivalent of forfeiture. For non-payment of rent the landlord must give a pre-irritancy warning of not less than fourteen days. For other breaches the landlord must act as a fair and reasonable landlord would.
Irritancy is drastic: the lease ends, and any premium or investment in the premises is lost. Scots law gives the tenant much less relief than English law does. The practical answer is to take advice the moment a warning notice arrives, not after the deadline in it has passed.
The clauses worth arguing about
Land and Buildings Transaction Tax on leases
Commercial leases in Scotland attract LBTT on the rent, and Scotland is unusual in requiring further returns every three years throughout the lease, on assignation and at termination. These returns are compulsory even where no additional tax is due, and penalties follow from missing them. Very few tenants know about the three-yearly return until a penalty arrives. Diarise it on the day you sign.
What to do now
- Send the draft lease to a solicitor before signing anything, including heads of terms.
- Photograph the premises before entry and ask for a schedule of condition.
- Diarise the notice date for the end of the term and the three-yearly LBTT returns.
- Check what any guarantee you are being asked to give actually commits you to.
A note on this page
This is general information about how the law works in Scotland. It is not advice about your situation and it cannot be, because we do not know your circumstances. Nothing here should be relied on as a substitute for speaking to a solicitor about your own case.
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