Alistair Drummond
Alistair heads up DLA Piper's Litigation and Regulatory practice in Scotland, and specialises in all aspects of Commercial Property and Commercial Lease disputes and Contentious Construction issues. He advises on wide ranging matters including dilapidations, keep open clauses, landlord's consent, irritancy, lease interpretation, servitudes, enforcement of missives and agreements for lease, amongst others.
Recognised by his peers and clients alike as having extensive and comprehensive knowledge of his area of practice, Alistair is frequently requested to lecture and present seminars and training events on the subject.
12 Contributions by Alistair Drummond
PRACTICE NOTES
Assignation and Subletting in Scottish Commercial Leases: Consent, Reasonableness, Financial Standing, Reverse Premiums, Disputes, Remedies and Continuing Liability
This Practice Note explores the difference between assignation and subletting of commercial leases in Scotland, the requirement for a landlord’s consent, and the respective remedies available to a landlord and a tenant where the other party breaches its obligations under the lease concerning assignation or subletting. It relates exclusively to commercial leases in Scotland and does not deal with residential or social housing tenancy arrangements.
Assignation and subletting
Assignation and subletting are two avenues a tenant may use to introduce a new tenant into the lease arrangement. The tenant might opt for these avenues because it no longer needs to occupy the premises (or a portion thereof) yet is not entitled under the lease terms to terminate. This Practice Note considers the contentious issues that can arise when a tenant asks its landlord to approve an assignation or a sublease. The principal difference between assignation and sublease is the degree to which the tenant’s responsibilities under the lease are transferred. As further addressed in this Practice Note:
assignation—normally transfers all of the tenant’s obligations under the lease to the assignee. In this way, an assignation can offer a tenant a clean break from its responsibilities under the lease, and the assignee steps into...
Property Disputes
PRACTICE NOTES
Commercial lease rent reviews in Scotland: drafting, notices, time limits and waiver, valuation assumptions/disregards, dispute resolution (arbitration v expert), and alternatives (turnover rent and indexation)
This Practice Note sets out how rent review clauses operate in commercial leases. It also summarises the processes for resolving rent review disagreements by arbitration or expert determination. It does not address agricultural rent reviews; for those, see Practice Notes: Rent review under 1991 Act agricultural tenancies in Scotland and Rent review under 2003 Act agricultural tenancies in Scotland.
Need for rent review
Rent reviews enable commercial rents to be aligned with market conditions at the review date. They appear most often in longer commercial leases. Reviews occur at the intervals agreed in the lease’s rent review clause, typically every three to five years, though this may differ.
In addition to specifying the dates, the lease should set out the method to be used for the review. Several approaches are available, discussed below; however, the open market rent basis is the most prevalent. For further detail, see: Different types of rent review: Stair Memorial Encyclopaedia [481]. Care is required when drafting rent review clauses to ensure that...
Property Disputes
PRACTICE NOTES
Enforcing standard securities: residential properties regime, calling-up/default notices, possession, sale and court processes (Scotland)
This Practice Note examines the enforcement of standard security over heritable property in Scotland.
Legal framework
The regime governing enforcement of standard securities sits in, and is derived from, Part II of the Conveyancing and Feudal Reform (Scotland) Act 1970 (CFR(S)A 1970). The statutory framework originally set out in the CFR(S)A 1970 has been significantly modified for securities over properties used for residential purposes, principally by the following:
Mortgage Rights (Scotland) Act 2001, and
Home Owner and Debtor Protection (Scotland) Act 2010
When considering enforcement of any standard security, the reference point is the security instrument itself and, in particular, the operation and application of the ‘Standard Conditions’ contained in CFR(S)A 1970, Sch 3. From an enforcement standpoint, normally the key Standard Conditions to note in practice are:
Standard Condition 9—which defines the circumstances in which a debtor is to be treated as being in default, and
Standard Condition 10—which describes the creditor’s suite of rights once default has arisen, including power to sell the property, enter into possession, let the property and effect repairs
CFR(S)A 1970, ss 19–25 address the detailed mechanical steps that need to be taken to establish default for enforcement purposes within the meaning of the Standard Condition...
Property Disputes
PRACTICE NOTES
Irritancy in commercial leases (Scotland): legal and conventional grounds, statutory procedure, defences, impact on sub-leases and charge-holders, and proposed reforms
Background
This Practice Note explores the law of irritancy within the sphere of commercial leases in Scotland. It examines the distinction between legal and conventional irritancies, the procedure for exercising irritancy, available defences, and the consequences for sub-leases and charge-holders. It does not cover:
human rights challenges to irritancy
the interaction of irritancy with the corporate insolvency regime
irritancy in the context of residential property, see Practice Note: Residential tenancies in Scotland—bringing to an end
irritancy in the context of agricultural property, see Practice Note: Irritancy of agricultural tenancies in Scotland
Irritancy is a landlord’s remedy that permits termination of a lease following a tenant’s breach. It is equivalent to the English remedy of forfeiture. An irritancy may arise by operation of law or be conventional.
Legal irritancy
An irritancy arising by law is known as a legal irritancy. Under Scots common law, the sole recognised legal irritancy is for non-payment of two successive years’ rent. In that circumstance, on the expiry of the two-year period, the landlord may terminate the lease and, if the premises are not vacated, commence proceedings to evict the tenant...
Property Disputes
PRACTICE NOTES
Landlord and tenant remedies in Scotland: interdict, specific implement, payment and damages actions, rescission, retention, irritancy, hypothec and recovery of heritable property
Main remedies in Scottish landlord and tenant disputes
The principal remedies available in the context of landlord and tenant disputes in Scotland are:
Interdict
Specific implement
Payment action
Damages action
Rescission
Retention of rent
Irritancy
Hypothec
Action for recovery of heritable property
Interdict
Interdict is a court remedy used to restrain an actual or threatened breach of contract by a party; for example, a landlord may seek it to stop a tenant using the premises for a purpose other than that for which it is let. It is the counterpart of the English remedy of injunction. An interdict can be obtained in the Court of Session (by petition or summons, see: Introduction: Stair Memorial Encyclopaedia [88]) or in the sheriff court (by initial writ, see: Form of writ: Stair Memorial Encyclopaedia [382]). If brought in the sheriff court, proceedings must be raised where the defender is domiciled or where the alleged wrong is occurring. The sheriff may nevertheless grant an interdict effective beyond the sheriffdom. There are six Sheriffdoms in Scotland, including Glasgow and Strathkelvin and Grampian...
Property Disputes
PRACTICE NOTES
Nuisance in Scottish property disputes: common law principles, statutory nuisance under the EPA 1990, remedies and defences, overlap with other regimes, public places, recent cases, and comparison with English law
The most frequent delicts arising in property disputes are negligence, nuisance and trespass; see Practice Notes: Property disputes in Scotland (delictual and statutory) and Property disputes in Scotland—negligence and trespass. Nuisance describes any use of land that interferes with a neighbour’s enjoyment of their property. Situations where a nuisance remedy may apply include uses that:
generate offensive smells or odours
produce noise
cause flooding to a neighbour’s property
In Scotland, nuisance is classified as either common law or statutory nuisance.
Common law nuisance—invasion of interest in the use and enjoyment of private land
At common law, nuisance is broadly characterised as ‘an invasion of an interest in land’. Liability is assessed by the ‘reasonable tolerability’ test, which is context‑dependent and may vary with factors such as locality, impact, frequency, and the utility of the conduct in question; see The nature of the test for determining liability for nuisance: Stair Memorial Encyclopaedia [37].
The test of reasonable tolerability
Case law reveals differing approaches to the test applied by the courts when determining liability for nuisance, see...
Property Disputes
PRACTICE NOTES
Property disputes in Scotland: negligence (professional and construction) and trespass—tests, defences, remedies (damages, interdict) and access rights under the Land Reform (Scotland) Act 2003
This practice note examines property disputes arising from negligence and trespass. For statutory liability connected to property and the law of nuisance, see Practice Notes: Property disputes in Scotland (delictual and statutory) and Property disputes in Scotland—common law and statutory nuisance.
Negligence
Negligence claims in property contexts frequently stem from inadequate property advice given by a professional—such as an architect, surveyor or conveyancer—or from substandard construction work undertaken by a contractor, for example a builder, roofer or plumber. Negligence creates liability for loss or injury caused by carelessness or a failure to exercise reasonable competence by the relevant professional or contractor.
What is the test for negligence?
Negligence is assessed by a three-part test considering whether:
a duty of care exists
that duty has been breached
the breach of duty brought about the loss or harm complained of
See further: The rise of the concept of duty of care: Stair Memorial Encyclopaedia [257], The importance of Donoghue v Stevenson: Stair Memorial Encyclopaedia [258] and Duty of care: meaning: Stair Memorial Encyclopaedia [259].
The test for a duty of care
Whether a duty of care arises involves considering whether there is:...
Property Disputes
PRACTICE NOTES
Recovering Commercial Rent Arrears in Scotland: landlord options, court and summary diligence, statutory demands, guarantees, deposits, hypothec, and key considerations including irritancy, time bar and insolvency
Rent
Rent is the amount payable by a tenant to the landlord for occupying or using the premises. The rent figure must be capable of being worked out from the lease; it need not be fixed for the whole term, but the starting rent must be identified together with a method—typically a rent review clause—to determine later rents. Rent is usually expressed as exclusive of VAT, payable without deduction and without the need for demand. See Practice Note: Rent and rent review in commercial leases in Scotland.
Commercial rent is ordinarily paid in advance by equal instalments on the quarter days, namely:
28 February, May, August and November
or, where English parties prefer, 25 December, 25 March, 24 June and 29 September
Monthly payment is increasingly common. Where rent is payable quarterly in advance, the entire instalment falls due on the quarter day. This can be significant where a tenant seeks to exercise a break clause with a termination date between quarter days. See Practice Notes: Break options in commercial leases—disputes—Scotland and Break options in commercial leases in Scotland...
Property Disputes
PRACTICE NOTES
Renunciation of Leases under Scots Law: Express and Implied Routes, Sub-lease Effects, Land Registration, LBTT, Tacit Relocation and Insolvency
Default position
Bilateral surrender—termed renunciation under Scots law—describes how a tenant relinquishes rights arising under a lease. This may occur by express agreement between the parties, or through the landlord’s acquiescence, which carries an implied discharge of claims against the tenant. The framework applies to both residential and commercial leases. For Agricultural tenancies, see Practice Note: Resumption of agricultural holdings in Scotland and partial notices to quit. Under Scots law, neither party is able to renounce unilaterally.
Renunciation is distinct from:
abandonment where the tenant justifiably rescinds the contract owing to a material breach by the landlord (see: Rescission or abandonment: Stair Memorial Encyclopaedia [200])
abandonment where the tenant unjustifiably repudiates the contract and deserts the subjects (see: To Remain in Possession: General: Stair Memorial Encyclopaedia [175])
Where renunciation does not arise by agreement but instead amounts to abandonment, the landlord is presumed not to have waived any claims (see: Bidoulac v Sinclair’s Trustee), and is entitled to recover rent for the period after repudiation without seeking to enforce the...
Property Disputes
PRACTICE NOTES
Repairing obligations and dilapidations in Scottish commercial leases: interpretation, extraordinary repairs, interim schedules of dilapidations, remedies, and terminal payment versus damages clauses
This Practice Note reviews repairing duties in Scottish commercial leases, covering how such obligations are interpreted, extraordinary repairs, interim dilapidations, remedies for breach by landlord or tenant, the scope of duties, and payment obligations for repairs at lease termination. For the principal judicial and non-judicial remedies in Scottish landlord and tenant disputes generally, see Practice Note: Remedies in landlord and tenant disputes—Scotland.
Interpreting repair obligations in commercial leases
A lease’s repairing clause allocates the respective responsibilities of landlord and tenant for the let subjects and any shared parts of the property of which they form part. In practice, parties and their solicitors negotiate how repair risk is divided, and unambiguous drafting is required to shift responsibility from landlord to tenant. Care is also needed in defining the let subjects and the extent of common parts so that liability is aligned accordingly; see Practice Note: Repair clauses in commercial leases in Scotland—Contracting out of the common law—the full repairing and insuring lease. Landlord’s common...
Property Disputes
PRACTICE NOTES
Scots law property disputes: delict (negligence, nuisance, trespass), occupiers’ liability, defective premises, consumer rights, and time limits under the Prescription and Limitation (Scotland) Act 1973
This Practice Note examines property disputes in Scotland arising:
in delict
under the Occupiers’ Liability (Scotland) Act 1960 (OL(S)A 1960)
under consumer rights legislation
concerning defective premises and the time limits for claims under the Prescription and Limitation (Scotland) Act 1973 (PL(S)A 1973)
It does not address statutory repair duties for agricultural or residential tenancies.
Broadly, obligations connected to property may arise:
by force of law (statutory—see further: Obligations arising by force of law: Stair Memorial Encyclopaedia [2])
from a wrongful act (delictual—see further: Obligations arising from a wrongful act: Stair Memorial Encyclopaedia [3])
voluntarily (eg unilateral and contractual undertakings—see further: Voluntary obligations: Stair Memorial Encyclopaedia [4])
Delictual obligations arising from a wrongful act
Delict governs legal wrongs. It is the counterpart of ‘Tort law’ in England; see: Differences between Scots and English law: Stair Memorial Encyclopaedia [166] and Practice Note: What is a tort? In contrast to contractual liabilities, which are fixed by the parties’ agreement, delictual liability has evolved through common law principles and case law, and in some circumstances is supplemented by legislation...
Property Disputes
PRACTICE NOTES
Scottish commercial lease break notices: strict compliance on form, service and parties, agent authority, withdrawal, and legislative context—key case law and pitfalls
Break clauses
A break clause is a provision in a lease that allows the landlord or the tenant to bring the lease to an early end. The Practice Note: Break options in commercial leases in Scotland examines break clauses in depth and covers:
who is entitled to exercise the break
the timing for exercising the break clause
any pre-conditions to using a break clause
the implications for sub-leases
For sample drafting, see Precedents: Break clause for commercial lease in Scotland—landlord option—style, Break clause for commercial lease in Scotland—tenant option—style, and Break clause for commercial lease in Scotland—mutual option—style. For practical guidance on exercising a break option, see: Break options—exercising break clauses in Scotland—checklist.
Break notices
Break options are operated by serving a break notice. The break clause often specifies the requirements for the notice, including its form, the date and method of service, and the correct parties to be served. These details may alternatively appear in a general service clause within the lease, or in both.
Mandatory Requirements
Any mandatory provisions relating to the notice must be observed to the letter...
Property Disputes
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