Guide for industrial and commercial tenants

Ending your lease early

If you have a building lease, there are two ways by which you can end your lease early.

Early termination

Although building leases are usually for a stated period of 5 years, a tenant may serve notice to quit any time after the 1st year has passed on giving three months notice, that is, the minimum period you may lease the property is 15 months.

If you want to terminate your lease before the end of the lease term, you must serve a minimum of 3 months notice, in writing, to the Property Section.

Before the proposed termination date, we must be satisfied that the premises are in good order in line with the terms of the lease. Our surveyor will normally inspect the premises to ensure that this condition is met.

If repairs are needed, they must be carried out before the termination date.

Read what happens at the end of your tenancy.

Once the unit has been returned to us, it will be advertised for let on the open market in accordance with standard procedures.

Under an early termination, you cannot nominate who will take on the unit after you have served your notice.

Assigning your lease to someone else

All the terms of your original lease will be trransferred to the new tenant. You will then cease to have any involvement with the property and we will have a legal relationship with the new tenant only.

We must be satisfied that the new tenant will be able to comply with the terms of the lease such as keeping the premises in good order and paying the rent on time. They must complete an application form and provide evidence of their ability to meet the financial obligations of the lease eg, bank reference, copies of business accounts. We will also carry out credit and background checks.

If you wish to assign your lease:

Both you and the person to whom you wish to transfer your lease should appreciate that the assignation is an agreement between the two of you, not with the Council who only give landlord's consent (or not) for the assignation to go ahead
Make sure that the party to whom you wish to assign the lease understands that all of the rights and responsibilities of your original lease will transfer to them, including making good any alterations you may have made to the property
Contact us in writing advising that you wish to request permission to assign your lease to another party
We will request various details on the new tenant’s business so we can decide whether the new tenant is capable of complying with the terms of the lease. These details usually include, for example, bank references and business plans. Assuming that we approve the Assignee, the assignation process can go ahead
You, in conjunction with the Assignee, can then arrange to have the Assignation Agreement drawn up. This is an important legal document which transfers all the rights and responsibilities of the original lease to the new tenant and we strongly recommend it should be prepared in Scottish Legal Terms by a solicitor
We must also be satisfied that any arrears of rent or non-domestic rates due by you, as the current tenant, are settled before the assignation can be formalised.
On no account should the prospective Assignee be allowed entry to the premises before the assignation document has been concluded and approved by the Council's Head of Legal Servcies. This is to protect the interests of both parties as you will remain liable for any damage to the property and any rent payable until the assignation has settled.

Finally, all the legal costs, expenses and fees relative to the assignation, including those incurred by the Council, will be met by you and the new tenant. How you split these costs will be by mutual agreement. We will not be liable for any costs in connection with assignations and you will be advised of our fees on application.

We will not enter into correspondence with any prospective new tenant until we have your authority to do so in writing.

Sub-lets

We do not allow our industrial or commercial units to be sub-let
If you do not wish to continue in occupation of the premises, your only options are either to terminate or assign the lease as described above
Sub-lets are generally allowed on our long term ground leases
If you want to seek the consent of Highland Council as your landlord to sub-let your ground lease, please contact the Property Section in the first instance