Emergency measures have been put in place to protect tenants from having their commercial leases terminated as a result of late payment of rent.
Currently, in Scotland landlords must give tenants written notice before terminating a commercial lease for non-payment of rent or other sums due. The notice period is usually set out in the lease but it must be at least 14 days. If the tenant fails to make payment within the specified notice period then the landlord may proceed to terminate the lease and take enforcement action to evict the tenant.
Under the Coronavirus (Scotland) Act 2020, landlords must now give at least 14 weeks’ written notice to tenants before being able to terminate a commercial lease for non-payment of rent, rather than 14 days. The 14 week period applies irrespective of whether the tenant was already in breach of its payment obligations before the Coronavirus (Scotland) Act 2020 came into force.
These emergency measures will automatically expire on 30 September 2020. However, the Scottish Ministers may extend the expiration date for two further periods of six months. The Scottish Ministers also have the power to alter the new 14 week period if required.
The emergency legislation does not provide rent relief for tenants. Rent and other arrears will continue to accrue as usual. Landlords will be able to terminate a lease and take enforcement action to recover possession of the premises as usual once the extended notice period has expired.