Leases and licences in Scots law: an historical-doctrinal analysis
Norbash, Shona Mairi
For commercial landlords and tenants in Scotland, the common law, rather than legislation, provides most rules for the regulation of their agreement. Yet, despite its widespread practical importance, the Scottish law of landlord and tenant law is riddled with uncertainty due to being severely under-researched. This thesis sheds light for the first time on some of the most fundamental unanswered questions in the area: it evaluates which occupancy agreements can be validly created in Scots law, and how their formation requirements differ. This is important because different occupancy agreements have different implications for parties. Only leases which have become real rights provide security of tenure for tenants. However, as nominate contracts, any lease (whether it creates a real right or operates purely as a contract) contains implied terms (e.g. repairing obligations, notice requirements). Conversely, licences to occupy are easily terminable and incorporate no implied terms. If all the above types of occupancy agreement exist, it is imperative for the smooth operation of modern Scots law that the requirements for constitution of each are clearly delineated. This ensures parties know their rights and obligations from the outset. This thesis has three main parts. The first analyses what is meant by the term “lease”. Although the existence of a lease conferring a real right on the tenant is undisputed, an ongoing debate questions the survival of a purely contractual lease, alongside, and distinct from, the real right of lease. This research contributes an historical analysis, exploring for the first time the development of the lease’s cardinal elements. Through this detailed analysis, it is argued that the contract of lease does continue to exist, evidenced by stark differences in the formation requirements between the real right of lease and the contract of lease. The clarity provided by this discussion will be particularly important for tenants: contractual leases would provide access to the lease’s protective implied terms without the additional onerous requirements needed to create real rights. Only when the scope of the lease is known can the role of licence to occupy be fully understood. The licence to occupy is the focus of the second part of this thesis. Some, such as the Property Standardisation Group, doubt whether the licence exists in Scots law at all. Yet, commercial parties, drawn by the flexibility and simple termination of licences, have used them extensively (e.g. for “pop-up shops”). However, the current uncertainty means that parties risk their licences being unenforceable. My historical research identifies the introduction and extent of the acceptance of the licence in Scots Law. This is important because we cannot fully understand the law in this area without understanding its historical underpinnings, including the extent to which Scots law has been influenced by English law. Unclear formation requirements create additional problems when creating a licence. This research provides much-needed clarification of issues including the definition of exclusive possession and the role of intention as methods of distinguishing the lease from the licence. A detailed study defining these differences has never been previously attempted in Scots law. The third and final part of the thesis draws together the two previous strands. It considers the way in which the law distinguishing the real right of lease, the contract of lease and the licence to occupy could be improved. Ultimately, this research will provide an essential exposé of a practically important area of modern commercial law, recently highlighted by the Law Society of Scotland as requiring exploration and clarity. It provides a scheme which ensures parties know precisely which contract they have created and its implications.