Commercial Lease Agreement Template Scotland

COMMERCIAL LEASE AGREEMENT (SCOTLAND)

1. DOCUMENT PREAMBLE & RECITALS

THIS COMMERCIAL LEASE AGREEMENT (hereinafter the "Agreement") is entered into and made effective as of this [Day] day of [Month], [Year] (hereinafter the "Effective Date"), by and between:

LANDLORD: [Landlord Legal Name], having its registered office/principal place of business at [Landlord Address], registered under company registration number [Landlord Company Number, if applicable] (hereinafter the "Landlord", which expression shall include its successors and permitted assigns where the context so admits); and

TENANT: [Tenant Legal Name], having its registered office/principal place of business at [Tenant Address], registered under company registration number [Tenant Company Number, if applicable] (hereinafter the "Tenant", which expression shall include its successors and permitted assigns where the context so admits).

RECITALS

WHEREAS: A. The Landlord is the heritable proprietor (or holds a valid leasehold interest with power to sublet) of the Subjects (as defined herein); and B. The Landlord has agreed to let to the Tenant, and the Tenant has agreed to take from the Landlord, the Subjects for the Permitted Use subject to the terms, conditions, reservations, and provisions hereinafter contained.

NOW, THEREFORE, IT IS AGREED AS FOLLOWS:

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2. OPERATIONAL DEFINITIONS

For the purposes of this Agreement, the following terms shall have the meanings assigned to them below, unless the context otherwise requires:

1. "Break Option" means the option granted to the Tenant to terminate this Agreement prior to the Expiry Date pursuant to Clause 12.
2. "Business Day" means a day (other than a Saturday, Sunday, or public holiday in Scotland) on which clearing banks are open for normal commercial business in Edinburgh, Scotland.
3. "Commencement Date" means [Commencement Date, e.g., 1st November 2023].
4. "Deposit" means the sum of [Currency and Amount, e.g., GBP 5,000] deposited by the Tenant with the Landlord as security for the performance of the Tenant's obligations hereunder.
5. "Expiry Date" means [Expiry Date, e.g., 31st October 2028].
6. "Interest Rate" means [Percentage, e.g., 4] percent per annum above the base lending rate of [Bank Name, e.g., Bank of Scotland plc] from time to time in force.
7. "Permitted Use" means use as [Specify exact commercial use, e.g., retail shop / professional office / light industrial storage] and for no other purpose whatsoever without the prior written consent of the Landlord.
8. "Rent" means the annual rent of [Currency and Amount, e.g., GBP 20,000] payable by the Tenant to the Landlord in accordance with Clause 3.
9. "Rent Review Date" means [Specify Review Dates, e.g., every third anniversary of the Commencement Date].
10. "Service Charge" means the reasonable proportion payable by the Tenant towards the costs incurred by the Landlord in maintaining, repairing, lighting, and managing the Common Parts (if any) of the Building.
11. "Subjects" means the commercial property located at [Full Property Address, including postal code and title number if known], as more particularly described in the Schedule of Condition annexed hereto, including all fixtures, fittings, and appurtenances therein.
12. "Term" means the period from and including the Commencement Date to and including the Expiry Date, or such earlier date of termination in accordance with the provisions of this Agreement.
13. "VAT" means Value Added Tax chargeable under the Value Added Tax Act 1994 or any similar replacement or additional tax.

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3. SUBSTANTIVE TERMS & OBLIGATIONS

1. Grant and Term

1.1 The Landlord hereby lets the Subjects to the Tenant for the Term, yielding and paying therefor the Rent and observing and performing the obligations on the part of the Tenant herein contained. 1.2 The Tenant shall be entitled to exclusive possession of the Subjects from the Commencement Date, subject to the rights of access reserved to the Landlord under this Agreement.

2. Rent Payment

2.1 The Tenant shall pay the Rent to the Landlord by equal quarterly installments in advance on the first day of January, April, July, and October in each year, or by equal monthly installments on the first day of each calendar month, as specified by the Landlord in writing, without any deduction, set-off, or abatement whatsoever. 2.2 The first payment (representing a proportionate daily rate from the Commencement Date to the next quarter/month day) shall be made on the Commencement Date. 2.3 If the Tenant fails to pay any sum due under this Agreement within seven (7) days of the due date, the Tenant shall pay interest on such sum at the Interest Rate from the due date until the date of actual payment (whether before or after judgment).

3. Rent Review

3.1 The Rent shall be reviewed on each Rent Review Date to the open market rent as at the relevant Rent Review Date, determined in accordance with the provisions set out in Schedule [A] (if applicable). In no event shall the Rent following a Rent Review be less than the Rent payable immediately prior to such review (upward-only rent review).

4. Tenant's Covenants and Obligations

The Tenant covenants with the Landlord throughout the Term as follows: 4.1 Payment of Outgoings: To pay all rates, taxes, assessments, utility charges (including gas, electricity, water, and telecommunications) assessed, charged, or imposed upon or in respect of the Subjects. 4.2 Maintenance and Repair: To keep the interior of the Subjects in good and substantial repair, condition, and decoration (fair wear and tear excepted), and to make good any damage caused by the act, neglect, or default of the Tenant, its employees, agents, invitees, or licensees. 4.3 Alterations: Not to make any structural alterations, additions, or improvements to the Subjects, nor to alter the external appearance of the Subjects, without the prior written consent of the Landlord (such consent not to be unreasonably withheld or delayed). 4.4 Permitted Use: To use the Subjects strictly for the Permitted Use and for no other purpose, and not to do or permit to be done upon the Subjects any illegal, noisy, noxious, or offensive activity, or anything which may constitute a nuisance or cause material annoyance, damage, or disturbance to the Landlord or the owners or occupiers of neighboring properties. 4.5 Statutory Compliance: To comply in all respects with all applicable statutes, statutory instruments, planning consents, environmental laws, health and safety regulations, and fire safety codes relating to the Subjects and the Tenant's use thereof. 4.6 Alienation: Not to assign, sublet, charge, or part with possession of the whole or any part of the Subjects, nor share occupation of the same, without the prior written consent of the Landlord, which consent shall be governed by applicable Scottish commercial property law. 4.7 Insurance Indemnity: Not to do anything that would void or invalidate any insurance policy maintained by the Landlord in respect of the Subjects, and to reimburse the Landlord on demand for any increased insurance premiums resulting from the Tenant’s specific trade or use of the Subjects. 4.8 Access for Landlord: To permit the Landlord, its agents, and surveyors, upon reasonable prior written notice (except in cases of emergency), to enter the Subjects to view their condition, execute repairs, or inspect compliance with the terms of this Agreement.

5. Landlord's Covenants

The Landlord covenants with the Tenant as follows: 5.1 Quiet Enjoyment: That the Tenant, paying the Rent and observing and performing the covenants on the part of the Tenant herein, shall peaceably hold and enjoy the Subjects during the Term without any interruption by the Landlord or any person lawfully claiming through, under, or in trust for the Landlord. 5.2 Insurance: To keep the Subjects (excluding the Tenant's trade fixtures and stock) insured against loss or damage by fire and other standard commercial risks in an amount equal to the full reinstatement value thereof with a reputable insurance office.

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4. DEFAULT, TERMINATION, AND REMEDIES

1. Events of Default

The occurrence of any of the following events shall constitute an "Event of Default": 1.1 The Tenant fails to pay the Rent or any other sum due under this Agreement within fourteen (14) days of the due date (whether formally demanded or not). 1.2 The Tenant commits a material breach of any other covenant, obligation, or restriction contained in this Agreement and fails to remedy the same within thirty (30) business days after service of a written notice from the Landlord specifying the breach and requiring its remedy. 1.3 The Tenant enters into liquidation (whether compulsory or voluntary, except for the purpose of a solvent amalgamation or reconstruction), passes a resolution for winding-up, has a winding-up petition presented against it, has an administrator, receiver, or administrative receiver appointed over the whole or any part of its assets, makes any voluntary arrangement with its creditors, or suffers any diligence or execution to be levied on its assets within the Subjects. 1.4 The Tenant abandons the Subjects for a continuous period exceeding twenty-one (21) days.

2. Landlord's Remedies and Irritancy (Forfeiture)

2.1 If an Event of Default occurs, the Landlord shall be entitled, without prejudice to any other rights or remedies available to it under this Agreement or at law, to serve a formal notice of irritancy (forfeiture) in accordance with applicable Scottish law, bringing this Agreement to an immediate end. 2.2 Upon such termination, the Landlord may re-enter the Subjects or any part thereof in the name of the whole and peaceably possess and enjoy the same, without prejudice to any claim the Landlord may have against the Tenant in respect of any antecedent breach of the covenants herein. 2.3 The Landlord reserves the right to claim damages from the Tenant for all losses, costs, and expenses incurred as a direct or indirect result of the Tenant's default, including reasonable legal fees, re-letting commissions, and any shortfall in rent during the period prior to re-letting.

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5. BOILERPLATE LEGAL PROVISIONS

1. Severability

If any provision of this Agreement is held to be invalid, illegal, or unenforceable by any court or tribunal of competent jurisdiction, such provision shall be modified to the minimum extent necessary to make it valid, legal, and enforceable. If such modification is not possible, the relevant provision shall be deemed deleted. The remaining provisions of this Agreement shall remain in full force and effect.

2. Entire Agreement

This Agreement constitutes the entire agreement between the parties and supersedes and extinguishes all previous drafts, agreements, arrangements, and understandings between them, whether written or oral, relating to its subject matter. Each party acknowledges that it has not relied upon any oral or written representation, warranty, or collateral contract not expressly set out in this Agreement.

3. Force Majeure

Neither party shall be in breach of this Agreement nor liable for delay in performing, or failure to perform, any of its obligations under this Agreement if such delay or failure results from events, circumstances, or causes beyond its reasonable control, including acts of God, flood, drought, earthquake or other natural disaster, epidemic or pandemic, terrorist attack, civil commotion, war, nuclear, chemical, or biological contamination, or any law or governmental order (each a "Force Majeure Event"). This clause shall not excuse the Tenant from any obligation to pay Rent or Service Charge when due.

4. Governing Law and Jurisdiction

This Agreement, and any dispute or claim arising out of or in connection with it or its subject matter or formation (including non-contractual disputes or claims), shall be governed by, and construed in accordance with, the laws of Scotland. The parties irrevocably agree that the courts of Scotland shall have exclusive jurisdiction to settle any dispute or claim arising out of or in connection with this Agreement.

5. Notices

Any notice required to be given under this Agreement shall be in writing and shall be delivered personally, sent by pre-paid first-class post or recorded delivery, or sent by electronic mail to the respective addresses or email addresses of the parties set out in the Preamble (or such other address as may be notified in writing by one party to the other from time to time). Notices sent by post shall be deemed to have been received forty-eight (48) hours after posting.

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6. FORMAL EXECUTION BLOCK

IN WITNESS WHEREOF these presents, consisting of this and the preceding pages, are executed as follows:

FOR AND ON BEHALF OF THE LANDLORD:

Signature: __________________________________________________

Name:      __________________________________________________

Title:     __________________________________________________

Date:      __________________________________________________

In the presence of:

Witness Signature: __________________________________________

Witness Name:      __________________________________________

Witness Address:   __________________________________________

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FOR AND ON BEHALF OF THE TENANT:

Signature: __________________________________________________

Name:      __________________________________________________

Title:     __________________________________________________

Date:      __________________________________________________

In the presence of:

Witness Signature: __________________________________________

Witness Name:      __________________________________________

Witness Address:   __________________________________________

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