New measures to protect business tenants

The notice period before a commercial lease can be terminated for non-payment of rent has been extended, as part of new measures to help businesses introduced in the Coronavirus (Scotland) Act.

Minister for Public Finance Ben Macpherson has written to business leaders to promote new powers in the Act, which was passed unanimously by the Scottish Parliament last week.

Previously commercial tenants served with a warning letter for non-payment of rent would have 14 days to pay outstanding rent.

This period has now been increased to 14 weeks. It applies to all commercial property leases, including those where a warning notice has already been issued and has not already expired.

Mr Macpherson said:

“This new emergency measure is designed to support commercial tenants, who may be facing financial difficulties outwith their control during these extraordinary times.

“Many businesses are experiencing a sudden drop in income and this part of the new Act will help them to reduce costs and prioritise maintaining jobs and productive capacity. It will help commercial tenants to focus on assisting their employees, and retain the ability to resume productivity and pay rents again as normal once this crisis has passed.

“The Act gives Scottish ministers powers to extend the period beyond 14 weeks if necessary, and it’s important to recognise tenants could still be in a difficult financial position even after these next 14 weeks. Therefore, I encourage landlords and tenants to engage constructively with each other about how best to manage their specific situations.”

Head of UK Government Relations and City Strategy at the Royal Institution of Chartered Surveyors (RICS) Hew Edgar said:

“These are exceptional circumstances, and the Scottish Government has introduced many necessary measures to support those who operate and participate in Scotland’s commercial market.

“RICS welcomes the Minister’s advice that landlords and tenants should seek advice from professionals who can assist in the navigation of the amended business rates regime, how to access recently established grants and loans on offer, as well as assist parties who want to introduce temporary payment measures to seek compromise.”

The chair of the Scottish Property Federation, Robin Blacklock said:

“The property industry recognises the severity of the health and economic emergency facing society and we have welcomed the Act on this basis. It is important that both landlords and their tenant customers work together to manage the impact of the Covid-19 crisis, including where tenants struggle to meet rental liabilities through no fault of their own.”

Background

Full text of letter. 

Details on the range of emergency measures to support business are available on the Scottish Government website.

The Scottish Government has also set up a free helpline to provide support to businesses: 0300 303 0660.