On the face of it, a lease will state the date of expiry, or termination date under the lease. So, why should you bother with a termination notice? In Scotland, a lease does not automatically terminate at the expiry date, it requires notice to be served by either party in advance of the intended expiry date. For a tenant, if notice has not been properly served by either party within sufficient time of the expiry date, the lease will continue for a further year by tacit relocation. If the term of a lease is less than 1 year, e.g. 6 months, the lease would instead continue for a further 6 months. The lease would continue on this basis, year in, year out, until either party serves sufficient notice (or until the lease was brought to an end by other means, such as irritancy). For a tenant, that may be less than desirable to find that you are obliged to pay rent etc. under a lease for a further year. For a landlord, that may scupper any imminent plans to redevelop the subjects or to sell onto a third party with the benefit of vacant possession.
How much notice is required?
Unless the lease states otherwise, 40 clear days is the required period. The significance of the word “clear” is that, at the very least, you can discount the date of service of the notice and the date of delivery from your 40 day period. Also, a lease may also state in some cases, that a notice will be deemed to be delivered to the other party, 48 hours after the service of such a notice. So, unless there is sufficient time to obtain written confirmation from the other party that the notice has been validly served, you should add at least further 4 days to this 40 day period in advance of the expiry date.
In the case of a break option or early termination date under a lease, the length of notice will vary, but a typical commercial lease with a break option will normally state that no less than 6 months prior written notice is required prior to the break date. The terms of the lease should be checked thoroughly however, to ensure any such notice is served correctly and well in advance of the relevant time limit.
Does the notice require to take a certain form?
Yes and no. While a notice of termination doesn’t need to adhere to a certain style, it must comply with the terms of the lease and must not contain any incorrect information, or that could invalidate the notice. It is always advisable to take advice from your solicitor and instruct them to prepare and serve any such notice. The notice provisions within a lease have to be complied with to the letter, e.g. sending the notice to the correct tenant and to their current registered office, not to their solicitor’s or agent’s address.
Can the notice be served at any time?
Yes, provided the minimum required notice is given, notice can be served as far in advance as you like. If a lease is due to expire on 31 December 2016, then written notice of the party’s intention to bring the lease to an end on that date can be served in July (or earlier in the year for that matter). The best practice is to allow sufficient time for the notice to be prepared, checked, served and crucially, acknowledged by the party receiving the notice. If there is then an objection to the validity of the notice at a later date, you will then have your acknowledgement signed by the landlord stating that the notice was validly served.