Overview
The Scottish Government has withdrawn the Leases (Automatic Continuation etc.) (Scotland) Bill, which aimed to modernise the law surrounding the termination of commercial leases in Scotland. The Bill was introduced in December 2024 and proposed replacing the common law doctrine of tacit relocation with a statutory framework. It also revised the existing requirements for serving notices to quit and notices of intention to quit, establishing a statutory system for the automatic continuation of leases that reached their termination date.Why was the Bill withdrawn?
A letter from the Minister for Victims and Community Safety, Siobhain Brown, confirmed the decision in a formal letter to the Committee (visit www.parliament.scot for more information). This indicates the Bill was withdrawn due to a lack of consensus among stakeholders, and a risk that amendments during the legislative process could significantly alter its original intent. It appears the Scottish Government will now reflect with a view to considering options for moving forward.The status quo
The withdrawal of the Bill means that the current legal framework on commercial lease termination —particularly the doctrine of tacit relocation—remains in force. This has several implications:
- Continued Risk of Unintended Lease Renewal: parties must remain vigilant about serving proper notices to quit. Failure to do so could result in commercial leases continuing under common law, potentially leading to financial and operational complications.
- No Statutory Clarity: The anticipated simplification of lease termination procedures will not proceed at this time.
- Contractual Flexibility Remains Limited: The Bill would have allowed parties to opt out of automatic continuation. Without it, lease terms remain subject to traditional constraints.
- Uncertainty Around Future Reform: While the Scottish Government has indicated a willingness to revisit the issue, there is no confirmed timeline for reintroducing reform.
Conclusion
Parties therefore need to continue to work within the current legal framework, with the complexities of lease end dates, notice periods and irritancy provisions.
If you have any questions or you would like us to help you navigate this tricky area of law, please contact our Real Estate or Real Estate Litigation team or your usual DWF contact.
