Whyte Fraser & Co defends action to irritate lease
“To irritate a lease for arrears in Scotland, landlords must first issue a pre-irritancy warning notice giving tenants at least 14 days to pay arrears. If unpaid, the landlord can then serve an irritancy notice to terminate the lease immediately.
In Lujo Properties Limited v Gruve Ltd, a pre-irritancy warning notice was sent by recorded delivery but was not received by the tenant.
Whyte Fraser & Co Solicitors successfully acted for the tenant in this dispute.
The full judgement can be found here:
The lease included a deemed service clause, stating notices are deemed served after a specified time post-delivery, regardless of actual receipt. The court had to decide if service occurred under statute and the lease. The court ruled that under statute service was deemed to have taken effect upon posting, but under the lease, it required actual receipt. Thus, service under the lease was invalid since the tenant didn’t actually receive the notice.
Gruve marks a departure from traditional views on ‘sufficient service’ and ‘deemed service’ in leases. The Sheriff emphasised the lease’s requirement that notice be “given,” implying actual delivery, which contrasts with common commercial lease practices where notices are deemed served based on the clause. Additionally, the court’s interpretation that notice under statute is served upon posting, irrespective of receipt, is contentious.
Prior cases have typically aligned service under statute with the lease’s service timing.
Of note, in this particular dispute, the Sheriff found the landlord’s irritancy oppressive since it knew the notice wasn’t received and didn’t inform the tenant (of the notice having been issued) by other means, risking tenant confusion over payment deadlines and lease obligations.
Gruve impacts on what is an already complex legal area, stressing the need for landlords and tenants to seek specialised legal advice before invoking irritancy (or ensuring that no notices have been received, particularly when disagreements arise) under commercial leases to ensure compliance with notice requirements.