A lease is a contract involving the hire of heritable property by one party the tenant who hires the
property from another person who is the landlord.
There are different terms for the person granting the lease: The grantor can be called the landlord,
the lessor or overlessee.
The tenant can also be referred to as the lessee or the tacksman.
If rent is payable, it can be referred to as rent or loyalty or lordship.
A lease is personal, the rights deriving from it are only personal and the rights of the tenant can only
be exercised against the particular landlord, and the landlord against the particular tenant. However,
in certain circumstances where the requirements are met, a lease can give rise to a real right and that
is most often manifested by the tenant maintaining their rights to be a tenant notwithstanding hat
the original landlord has not transferred the property to someone else.
In other words, you have a real right as a tenant and if the landlord sells the property of which you are
tenant if you have a real right you can remain in the tenancy with the new owner as your new landlord.
Types of Leases
An urban lease relates to buildings and rural lease relates to land. Agricultural leases, commercial
leases, mineral leases, residential lease, sporting leases etc.
Term and Quarter Days (Scotland) Act 1990
Historically, commercial leases were paid quarterly basis on the so-called quarter days. Originally fell
at different days in particular months and they were standardised by the 1990 Act on the 28 th of the
months of February, May, August and November.
Basic Requirements
Contractual Requirements – need not be agreement between the parties..
• Agreement
Gray v Edinburgh University 1962 SC 157
Involved negotiations in relation to property that Edinburgh university wanted to hire from the
pursuer. During the negotiations, the university said they wanted to rent the subjects at a fair price
and that they would take over the tenancy at a particular date on the following year. No agreement
was reached as to how long the lease was to last nor how much rent was to be paid. Eventually the
university decided not to proceed, but the pursuers contended that there was a lease and raised an
action trying to order Edinburgh university to implement that lease. One of the grounds that the
pursuer put forward that there was a lease in existence was that they said there was a presumption
, in scots law according to the pursuers that if everything else was settled, then the duration would be
inferred to be one year. After an appeal, the pursuer’s action was thrown out.
The court concluded that there was no consensus on rent or duration. Therefore, there was no lease
in existence for Edinburgh university to implement.
• Rent – how much it should be.
• Heritable Subjects – subjects of the lease must be heritable.
• Duration – must be agreement to the duration of the lease.
Carruthers v Irvine 1717 Mor.15195
The lease was said to run “perpetually and continually so long as the grass groweth up and the water
runneth down”.
Creation of a real right – Leases Act 1449. Act on the requirements for constituting a real right:
• Constitution in writing – lease must be in writing.
• Rent – must have an agreement to rent.
• Heritable Subjects
• Finite duration – there must be an ‘ish’ – date at which the tenant has to leave, cannot
last forever.
Scottish Residential Estates Dev. Co. v Henderson 1991 SLT 490
An agreement between a property developer, the pursuers, and the defender, a woman, which
allowed the woman and her family to live in a cottage belonging to the pursuers for an unspecified
amount of time. She did not have to pay rent, but she did have to pay rates in relation to the property,
repairs and maintenance. The arrangement went on for some time but then the company wrote to
the defender so that she removes her and her family out of the cottage. She refused to leave saying
that she had a lease. The company went to court for an order that she be removed, and this order was
granted. Did not amount to a lease, did not have all the requirements, all she had was a right to occupy
the building until the company needed it back. The action by the pursuers to get the property back
was successful.
The maximum amount of time for a lease is 175 years.
• Possession – the tenant actually takes up possession. Until the tenant occupies the
property, which is subject to the lease, they have not acquired the real right.
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