Landlord and Tenant

Landlord & Tenant

Landlord and Tenant

Leasing or renting a commercial property in Scotland is very different from leasing/ renting a residential property. The former is mainly a matter of contract and case law with a few areas covered by legislation, whereas the latter is mainly governed by legislation.

Residential Letting

Given the costs involved residential landlords tend to issue their own tenancy agreements or have their appointing letting agent deal with it. Letting agents usually include the cost of tenant due diligence (credit checks and references) as well as dealing with any deposit and the tenancy agreement as part of the management fee, although some charge a separate fee for these services.

General information regarding leasing or renting a residential property in Scotland can be found on the following pages:

https://rentingscotland.org/

https://scotland.shelter.org.uk/get_advice/advice_topics/finding_a_place_to_live/renting_privately

Also, the Scottish model tenancy agreement can be found here if landlords wish to prepare the agreement themselves.

https://www.mygov.scot/tenancy-agreement-scotland/#!/summary/summary/

While preparing a new tenancy agreement is relatively straight forward and can be dealt with by non-solicitors, the eviction of non-paying or otherwise defaulting tenants is something that Pollock Fairbridge Schiavone Solicitors can assist with.

Commercial Letting

Pollock Fairbridge Schiavone Solicitors can advise you on all matters concerning your proposed or existing lease of a commercial property. Whether you are a Landlord or a Tenant, it is important that any lease, licence to occupy or occupancy agreement is completed correctly and both sides understand their respective rights and obligations under the relevant contract.

Leases

Commercial leases can vary in duration, from a couple of years to 20 years or more. The majority of leases are either FRI (full repairing and insuring) or IRI (internal repairing and insuring). Whether FRI or IRI, the tenant is essentially taking over responsibility for the property from the Landlord and would be liable to pay all insurance costs incurred by the landlord, as well as the rent, rates, utilities and any service (or common) charges. With the foregoing in mind, a tenant should treat the lease transaction as they would a purchase and undertake much of the same legal due diligence.

As well as the lease itself, lease transactions may also involve ancillary documentation such as an Agreement for Lease (an offer to enter into the lease), a Licence for Works Agreement (detailing the tenant’s proposed fit-out works and how they’ll be completed), a Rent Deposit (a sum held in security of the tenant’s payment obligation) and/or a third-party Guarantee (usually from an individual or an associated company).

Additional documentation may also be required throughout the duration, at rent review for example, or the tenant may wish to sublet the property and the Landlord’s consent is required. Legal advice should be sought before entering into any of these ancillary or additional documents.

Licences to Occupy

Licences are usually used for the short term occupation of commercial property in Scotland (a few months to a year or two at most). The document is usually much shorter than a Lease and the tenant’s obligations thereunder tend to be less burdensome (as you’d expect in a shorter arrangement). This generally means that the legal costs associated with a Licence to Occupy are less than with a Lease.