Commercial Lease (Scotland) - Template, Sample Form Pro · UK-law

COMMERCIAL LEASE AGREEMENT

relating to commercial premises in Scotland

This Lease is granted under and shall be governed by the law of Scotland, including without limitation the Leases Act 1449, the Tenancy of Shops (Scotland) Act 1949, the Land Tenure Reform (Scotland) Act 1974, the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985, the Requirements of Writing (Scotland) Act 1995 and the Leases (Scotland) Act 2025 (so far as in force).

1. PARTIES:

I. Landlord:

________ (________) whose registered office is at:

________

(hereinafter called "the Landlord" which expression shall include its successors and assignees whomsoever)

II. Tenant:

________ (________) whose registered address is at:

________

(hereinafter called "the Tenant" which expression shall include, where the context permits, the permitted assignees and successors of the Tenant)

III. Guarantor:

________ (________) whose registered address is at:

________

The parties have hereby agreed and do agree as follows:

2. DEFINITIONS AND INTERPRETATION

I. Definitions:

a. "the Premises" means the subjects leased by the Landlord to the Tenant, as specified in the clause titled "THE PREMISES";

b. "the Common Parts" means all common parts and areas serving the Premises, rights of access and other areas of the site in use by the Tenant and other relevant persons;

c. "the Landlord" means the party specified to be Landlord under this Agreement and all persons deriving title from the Landlord;

d. "the Tenant" means the designated Tenant under this Agreement and, where permitted, any assignees or sub-tenants and, where the Tenant is an individual, any personal representatives of the Tenant;

e. "the Agreement" or "this Lease" means this lease and any document supplemental, collateral or entered into in accordance with its terms;

f. "assignation" means the transfer by the Tenant of its rights under this Agreement to another person where permitted and with the prior written consent of the Landlord;

g. "the period of this lease" means the duration of the lease as specified in this Agreement together with any continuation thereof;

h. "the Planning Acts" means the Town and Country Planning (Scotland) Act 1997, the Planning (Listed Buildings and Conservation Areas) (Scotland) Act 1997, the Planning (Hazardous Substances) (Scotland) Act 1997, the Planning (Consequential Provisions) (Scotland) Act 1997, the Planning etc. (Scotland) Act 2006 and any other enactment relating to the use, development and occupation of land;

i. "data protection laws" means all laws applicable to the processing of personal data to which a party is subject, including the UK General Data Protection Regulation and the Data Protection Act 2018, and any modification or re-enactment thereof;

j. "jointly and severally liable" means that, where there is more than one Tenant, each is fully and jointly liable for the obligations of all, and where there is more than one Landlord, each is fully liable for the obligations of the other(s);

k. "rent" means the amounts payable by the Tenant to the Landlord under this Agreement, including any sums due in relation to insurance, repairs, maintenance or services;

l. "the prescribed rate" means interest at ________ per cent per annum above the base lending rate from time to time of ________;

m. "the Insured Risks" means fire, lightning, explosion, storm, flood, escape of water, impact, riot, malicious damage and such other risks as the Landlord may from time to time reasonably insure against.

II. Interpretation:

a. Words importing one gender shall include all genders.

b. Words importing the singular shall include the plural and vice versa; where two or more persons are included in the expression "the Tenant", their obligations shall bind them jointly and severally and their respective representatives and executors.

c. Where the Tenant is a firm or partnership, the obligations shall bind jointly and severally all persons who are or become partners during the period of this lease, the whole firm and its assets, and shall continue notwithstanding any change in the constitution of the firm.

d. Words importing persons include companies and vice versa.

e. Reference to any enactment includes any modification, re-enactment, amendment or extension thereof and all orders, regulations and instruments made thereunder.

f. An obligation on the Tenant not to do an act includes an obligation not to permit such act and to prevent it being done by a third party.

g. Any reference to the consent or approval of the Landlord means consent or approval in writing executed by or on behalf of the Landlord, such consent not to be unreasonably withheld or delayed save where this Agreement provides otherwise.

h. Any right of the Landlord to have access to the Premises extends to all persons authorised on its behalf, including workmen, contractors, agents and professional advisers.

i. Clause headings are for convenience only and do not affect interpretation.

3. THE PREMISES

I. The Premises let under this Agreement are situated at:

________

II. The extent of the Premises let to the Tenant is described as follows:

________

III. The Premises shall include:

a. all the Landlord's fixtures and fittings of every kind from time to time on or in the Premises, with the exception of tenant's fixtures removable without causing material defect;

b. any equipment, leads, cables, pipes and apparatus which serve the Premises;

c. all permitted additions and improvements to the Premises;

d. all floor and ceiling finishes; and

e. the internal walls of the Premises and the inner half (severed medially) of any internal wall separating the Premises from other parts of the property not let to the Tenant.

4. RENT, DURATION AND USE

I. The lease shall commence on ________ (the "Start Date").

II. The lease shall endure for a period of ________ from the Start Date and shall terminate on ________, unless an extension is agreed in writing by the parties. Either party must give at least ________ notice in writing before the end date of the lease or in accordance with any break clause, and the parties acknowledge that, in order to bring the lease to an end at its ish, valid notice to quit must be given so as to avoid tacit relocation.

III. In consideration of the rents and obligations contained herein, the Landlord lets the Premises to the Tenant, excluding any assignees or sub-tenants unless otherwise specified, together with access to the Common Parts the Tenant is entitled to use, subject to the conditions of this Agreement.

IV. The Tenant agrees to keep the Premises in a condition suitable for the intended use for the duration of the lease, subject to the rights and reservations in favour of the Landlord and others.

V. Throughout the period of this Agreement the Tenant shall pay rent of £________ (________) per month, exclusive of Value Added Tax which shall be payable in addition at the prevailing rate.

VI. The first payment of rent must be made on or before the ________. Thereafter the Tenant shall pay the rent in full and without retention, deduction or set-off on the last day of each month.

VII. The Tenant must make all rent payments via ________. The payment details shall be communicated to the Tenant in writing before the first payment is due. The Landlord must give the Tenant at least 14 days' written notice of any change to the payment method or details before the rent due date.

VIII. The Premises shall be let only for the following use:

________

5. DEPOSIT

I. The Tenant shall pay to the Landlord before the date of entry a deposit of £________ (________), to be held by the Landlord throughout the period of this lease.

II. The deposit may be applied by the Landlord as follows:

a. the Landlord may apply the deposit to remedy any breach of the Tenant's obligations, and where the Tenant terminates this Agreement before its end date otherwise than in accordance with a break clause, the Landlord may retain the deposit without obligation to return it;

b. where this Agreement is terminated by the Landlord by reason of arrears of rent or other sums, or where the Tenant becomes insolvent, enters into any arrangement with creditors, suffers diligence against the Premises or contents, goes into liquidation (other than a solvent voluntary liquidation for reconstruction approved in writing by the Landlord) or has a receiver or administrator appointed, the Landlord may retain the deposit and any remaining balance.

III. Where this Agreement has not been terminated before its end and has not been irritated or terminated by reason of any breach by the Tenant, the Tenant may request the return of the deposit or remaining balance, which the Landlord shall not unreasonably withhold. Where sums have been applied to remedy a breach or damage caused by the Tenant or persons connected with it, the Tenant shall not be entitled to require the deposit to be restored to its original value.

6. RENT REVIEW

I. Every ________ the rent payable shall be reviewed to an amount (the "revised rent") reflecting the market rental value of the Premises at the relevant date.

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III. Where the parties cannot agree the market rental value by the relevant date, the matter shall be referred to a Surveyor (being an associate, partner or consultant in a firm of Surveyors with relevant experience in valuing comparable commercial properties) nominated jointly, failing which appointed on the application of either party by the Chairman for the time being of the Scottish Branch of the Royal Institution of Chartered Surveyors, whose decision shall be binding upon the parties.

IV. The rent payable after any review shall not be less than the rent payable before the review.

V. Where the revised rent has not been agreed by the relevant date, the Tenant shall continue to pay the existing rent until agreement, whereupon the Landlord may backdate the revised rent to the relevant date and the Tenant shall pay the difference.

VI. Acceptance by the Landlord of rent at the previous rate after the relevant review date shall not constitute acceptance of that rate as the revised rent nor a waiver of the Landlord's right to review.

VII. Once the revised rent is agreed, the parties shall as soon as possible execute a memorandum specifying its amount.

7. TENANT'S OBLIGATIONS

I. The Tenant undertakes to pay the rent at the times and in the manner aforesaid without retention, deduction or set-off.

II. The Tenant shall pay interest at the prescribed rate to the Landlord, without prejudice to any other remedy, on demand on any rent or other sum that becomes due and remains unpaid, from the due date until payment.

III. At its own expense the Tenant shall execute all works required under any enactment (including without limitation the Health and Safety at Work etc. Act 1974, the Environmental Protection Act 1990, the Regulatory Reform (Fire Safety) provisions applicable in Scotland under the Fire (Scotland) Act 2005 and the Equality Act 2010) upon or in respect of the Premises or the Tenant's use thereof, and comply with all notices served by any public, local or statutory authority, and shall not do or permit anything whereby the Landlord may incur any penalty or expense.

IV. Throughout the period of the lease the Tenant must keep the Premises (including windows) clean, tidy and clear of rubbish.

V. The Tenant must permit the Landlord and authorised persons, at all reasonable times and on reasonable notice (except in emergencies), to enter the Premises to inspect their state of repair and condition, to take a schedule of fixtures and dilapidations and to exercise the Landlord's reserved rights.

VI. The Tenant shall not bring onto or keep at the Premises any article which is dangerous, inflammable, radioactive or explosive, nor carry on any hazardous trade or act which would prevent the Landlord insuring the Premises at ordinary rates or vitiate any insurance. Where insurance moneys are wholly or partly irrecoverable by reason of any act, neglect or default of the Tenant or those for whom it is responsible, the Tenant shall pay to the Landlord the whole or irrecoverable portion of the cost of reinstatement (including professional fees).

VII. The Tenant shall not allow any noxious effluent or substance to pass into drains, watercourses or sewers serving the Premises and shall make good any obstruction or damage caused.

VIII. The Tenant shall not, without the Landlord's written consent, place or keep at the Premises any article of such weight as would overload or damage the floors or structure, nor overload the electrical circuits.

IX. The Tenant shall use the Premises only for its permitted use and shall not carry on any noisy, offensive, dangerous, illegal or immoral trade or activity, nor do anything which may become a nuisance, annoyance, damage or inconvenience to the Landlord or to occupiers of neighbouring property, and shall keep the Landlord indemnified against all actions, proceedings, damages, costs and claims arising from any breach, and shall not use the Premises otherwise than as the following:

________

provided that the Landlord gives no representation or warranty that any such use is or will remain a permitted use within the Planning Acts or the title deeds, and the Tenant remains fully liable under this Agreement without compensation.

X. The Tenant shall not hold any auction, public exhibition, public show, political meeting or gambling upon the Premises during the period of this lease.

XI. The Tenant shall not alter, divide, damage or combine the Premises with adjoining premises without the Landlord's prior written consent and in accordance with specifications submitted to the Landlord; the Landlord may as a condition of consent require the reinstatement of the Premises before termination, failing which the Landlord may enter and carry out such works at the Tenant's expense (including professional fees) payable on demand.

XII. Before termination the Tenant shall properly prepare and paint with at least two coats of quality external paint, varnish or finish all external wood, metal and other parts usually so treated, and shall clean and repoint stonework and brickwork as necessary or on the Landlord's request, all works being approved by the Landlord as to method, colour and appearance, the Tenant first giving written notice of its intention.

XIII. Before termination the Tenant shall paint and decorate the interior of the Premises in a workmanlike manner with at least two coats of good quality paint and shall otherwise treat all interior parts usually so treated.

XIV. The Tenant shall keep the Premises adequately lit and shall be solely responsible for the maintenance and replacement of all internal lighting necessary to maintain a safe and functional environment.

XV. The Tenant shall not prejudice servitudes, block or darken any window or light, nor permit any new wayleave, servitude, privilege or encroachment to be acquired against the Premises, and shall give immediate notice to the Landlord of any such attempt and permit the Landlord access to take steps to prevent it, at the Tenant's cost.

XVI. The Tenant shall not acknowledge to any third party that it enjoys any right to light by that party's consent, nor pay any sum to induce a third party to refrain from obstructing light, and shall notify the Landlord of any threatened obstruction, permitting the Landlord to bring proceedings in the Tenant's name and at the Tenant's cost.

XVII. The Tenant shall make no claim for damage caused by the construction or alteration of any building on adjacent land for which the Landlord has given or may give consent, and shall concur in any such consent or grant at the Landlord's expense where required.

XVIII. The Tenant shall not display any sign, advertisement or notice visible from outside the Premises without the Landlord's written approval, failing which the Landlord may enter and remove the same at the Tenant's cost.

XIX. The Tenant shall keep the Premises equipped with fire-fighting apparatus inspected and maintained to the Landlord's satisfaction so as to comply with the Fire (Scotland) Act 2005, the Fire Safety (Scotland) Regulations 2006 and any other relevant enactment, and shall not obstruct access to such apparatus.

XX. The Tenant shall comply with the requirements of the Landlord's insurers and with the terms and conditions of any insurance policy affecting the Premises.

XXI. The Tenant shall at all times comply with the Planning Acts as follows:

a. comply with the provisions of the Planning Acts and indemnify the Landlord against all liabilities arising from any contravention;

b. at its own expense obtain all planning permissions and serve all notices required for activities constituting development within the meaning of the Town and Country Planning (Scotland) Act 1997, no application being made without the Landlord's prior consent;

c. pay any charge or levy imposed under the Planning Acts in relation to such activities or use;

d. notwithstanding any Landlord's consent, not carry out any alterations or change of use until all required notices have been served and copied to the Landlord, all permissions obtained and produced to the Landlord, and the Landlord has accepted that every necessary permission is acceptable; the Landlord may refuse to acknowledge any permission whose conditions or period would be detrimental to its interest;

e. where reasonable, appeal at its own cost against any refusal or condition of a planning permission applied for by the Tenant.

XXII. The Tenant shall inform the Landlord of any notice, order or direction received which may adversely affect the Landlord's interest and provide a copy at the Tenant's expense.

XXIII. The Tenant shall give immediate notice to the Landlord of any damage or destruction to the Premises, its extent and cause.

XXIV. The Tenant shall notify the Landlord immediately in writing of any defect which may give rise to a duty on the Landlord under the title deeds, common law or statute.

XXV. The Tenant shall indemnify the Landlord against all actions, proceedings, costs, claims and demands arising from:

a. any use of, defect in, or alterations to the Premises;

b. any interference with or obstruction of any right of light, drainage, air or other right enjoyed by neighbouring property; and

c. any breach by the Tenant of its obligations under this Agreement.

XXVI. The Tenant shall observe all burdens, conditions and obligations in the title deeds and keep the Landlord indemnified in relation thereto.

XXVII. The Tenant shall observe all reasonable regulations made by the Landlord from time to time for the management, convenience and safety of the Premises and ensure their observance by its staff and visitors.

XXVIII. During the six months before termination the Tenant shall permit the Landlord to affix a re-letting or sale notice and to permit viewings at reasonable times, provided the Tenant's business is not prevented.

XXIX. At or before the expiry or sooner determination of the lease, at the Tenant's cost, the Tenant shall:

a. vacate and return the Premises peaceably in good and substantial repair and replace any missing or damaged Landlord's fixtures with others of equal value;

b. remove all signs, writings and the Tenant's fixtures, fittings and furniture and make good all damage caused by removal;

c. where requested by the Landlord, remove all alterations and additions and restore the Premises to the Landlord's satisfaction; and

d. restore the Premises to such repair and condition as at commencement and, where the cost of doing so exceeds the total rent, pay any shortfall to the Landlord within 14 days of demand.

XXX. Throughout the lease the Tenant shall insure its own equipment kept at the Premises and shall at all times maintain public liability insurance in respect of access to the Premises in a sum of not less than £________, producing on demand a certificate of the insurers confirming cover and payment of premiums.

8. LANDLORD'S OBLIGATIONS

I. The Landlord undertakes that the Tenant, paying the rent and observing its obligations, shall peaceably hold and enjoy the Premises during the period of this lease without lawful interruption by the Landlord or any person rightfully claiming under or in trust for it.

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9. ASSIGNATION AND SUB-LETTING

The Tenant shall not at any time during the period of this lease assign, sub-let, dispose of, or share possession or occupation of the Premises or any part thereof, except with the prior written consent of the Landlord, such consent not to be unreasonably withheld where this Agreement so permits.

10. PROVISOS AND IRRITANCY

I. In the event that the Tenant fails to pay rent within 21 days of its becoming due (whether formally demanded or not), breaches any term of this lease, becomes insolvent, makes an arrangement with creditors, has diligence or enforcement taken against it, or being a company enters liquidation (unless a solvent restructuring approved by the Landlord), the Landlord may, having first given the Tenant written notice in accordance with sections 4 to 7 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 where applicable, irritate this lease and resume possession, without prejudice to any right or remedy in respect of the Tenant's breach.

II. Nothing in this Agreement shall confer upon the Tenant any servitude, right or privilege over neighbouring or adjoining property of the Landlord which would restrict the future rebuilding, alteration or development thereof, and the Landlord reserves the right to alter, demolish or redevelop any such property without consent from or compensation to the Tenant.

III. Nothing in this Agreement shall impose any restriction on the use of land not accounted for herein nor grant the Tenant any right to enforce any agreement relating to such land, but not so as to interfere with the Tenant's peaceful enjoyment of the Premises.

IV. The Tenant shall not be entitled on quitting the Premises to make any claim for compensation against the Landlord under any enactment, except where such exclusion is prohibited by statute.

V. Where the Premises are destroyed or damaged by an Insured Risk so as to be unfit for occupation, and the insurance has not been vitiated by any act or default of the Tenant, the rent or a fair proportion thereof shall be suspended until the Premises are reinstated, and where reinstatement does not occur within such reasonable period as the parties may agree, either party may terminate this lease.

VI. Any notice, request or consent under this Agreement must be in writing. Notices may be served by email to the address supplied by the relevant party, deemed served 48 hours after sending, or by recorded delivery post: to the Tenant (where incorporated) at its registered office, (where an individual) at its last known address or the Premises, (where a firm) at the Premises; and to the Landlord (where incorporated) at its registered office, (where an individual) at its last known address. Notice by post shall be deemed served two days after posting. Each party shall notify the other of any change of address or email address.

VII. Any demand for or acceptance of rent or other sum by the Landlord with knowledge of any breach shall not constitute a waiver of that breach, which shall be treated as continuing, and no such demand or acceptance may be founded on as a defence to any action for irritancy.

VIII. Any dispute between the Tenant and other occupiers of the Landlord's property concerning servitudes, mutual walls or contributions to common works shall be referred to the Landlord and, failing settlement, to a single arbiter mutually agreed, whose decision shall be final and binding.

IX. The Landlord shall not be liable to the Tenant for any loss, damage or expense arising from any defect or want of repair in the Premises or from the failure of any water supply, pipes, drains, gutters or watercourses, or from any act or omission of the proprietors, tenants or occupiers of any other part of the property or neighbouring properties.

11. DATA PROTECTION

Where performance of this Agreement requires the sharing or processing of personal data, the parties shall comply with all applicable data protection laws in force from time to time, including the UK General Data Protection Regulation and the Data Protection Act 2018, and shall ensure that personal data is held securely and disclosed only lawfully.

12. SEVERABILITY

If any provision of this Agreement is held to be unlawful or unenforceable to any extent, that provision shall be severed and the remaining provisions shall continue in full force and effect to the fullest extent permitted by law.

13. GOVERNING LAW AND JURISDICTION

This lease shall be governed by and construed in accordance with the law of Scotland, and the parties submit to the exclusive jurisdiction of the Scottish courts in respect of any dispute arising out of or in connection with it.

14. CONSENT TO REGISTRATION

The parties consent to the registration of this lease for preservation and execution in the Books of Council and Session, or other competent register. IN WITNESS WHEREOF these presents are executed as follows:

Subscribed for and on behalf of the Tenant, ________:

Signature of authorised signatory: _________________________

Full name of signatory: ________

Place of signing: ________   Date: ________

Witness signature: _________________________

Witness full name: ________   Witness address: ________

Subscribed for and on behalf of the Landlord, ________:

Signature of authorised signatory: _________________________

Full name of signatory: ________

Place of signing: ________   Date: ________

Witness signature: _________________________

Witness full name: ________   Witness address: ________

Subscribed for and on behalf of the Guarantor, ________:

Signature of authorised signatory: _________________________

Full name of signatory: ________

Place of signing: ________   Date: ________

Witness signature: _________________________

Witness full name: ________   Witness address: ________