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Commercial Leases – Failing to Notify Properly

One area where it always useful to remind tenants and landlords alike of the potential pitfalls in doing things incorrectly, particularly as it would seem to be the most simple of tasks, is providing notice to under a lease.  Whether it is issuing a notice to quit, exercising a break option or a rent review, or demanding payment from a tenant, failing to provide notice in the proper way can be a costly error.

By operation of law a lease will continue unless a specific form of notice (served within the required timescale) is given bringing the lease to an end.  The usual period of notice is 40 clear days, but different rules apply for the lease of an area over 2 acres, for crofts, residential properties, for specialist agricultural tenancies, or if the lease is less than 4 months in duration.

Even when the period is clear and notice is made in time, a notice can easily be served on the incorrect party due to the age of the lease and a change in legal personality or company name, or the lease itself might contain particular rules to be complied with.  In addition, the wrong form of words might be used making a notice’s intention dubious and open to challenge or a pre-condition in the lease might not be properly complied with.  What is or is not acceptable practice however is not clear given the case-law which, although it is meant to provide guidance, is often contradictory.  Some courts have taken the view that a strict approach is to be applied when scrutinising a notice and have ruled minor of errors to be fatal, whilst others have taken a much more relaxed approach.  Either way, the greatest of care must be taken. If any of the above renders a notice invalid, you may not find out until it is too late.

Add to all of this the fact that specific legal procedures, which are not even contained in the lease, will apply when the landlord is seeking to enforce obligations following non-payment of rent or the breach of an obligation.  Specific notices and notice periods need to be observed and a whole set of obligations unknown to the landlord will apply.

Parties do not ascribe the service (or checking upon receipt) of a notice huge value in terms of legal advice.  This reflects the fact that the legal position is much more complicated than common sense might suggest.  It needs to be remembered however that whether you are a landlord seeking to enforce your rights or terminate a lease, or you are a tenant having been served with a notice, obtaining proper legal advice is critical and may save you significant expense at a later date.

If you would like some further advice on this subject please contact our Commercial Property Department on 01383 721621.

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