We’ve all missed anniversaries – weddings, birthdays, mothers’ day etc. In our personal lives the worst that happens (although bad enough!) are angry or upset relatives or friends but in the business world the outcomes can be a lot worse (at least in financial or operational terms).
Much of our time is spent dealing with the consequences of what happens where a key anniversary date has been missed – which could mean the date when a lease reaches its end date or when the tenant has to exercise an option to extend a lease early but failed to take the required action. In most cases, what has been forgotten about is the need to send a notice to the other party to the contract or lease; for example, a lease does not end automatically on the stated date but continues to remain in force for a period of up to one year in the absence of a valid notice. Whoever has forgotten to address these will not only endure the ire of their work colleagues, but, more importantly, the business may be at risk of serious problems by having the unexpected financial cost of an extra year’s rent or worse or the operational difficulty of being unable to recover occupation of a property from a tenant.
Worse is if you have actually remembered the key anniversary but not sent the correct type of notice. Here, there really is no parallel with the non-business world – most people are grateful to have been remembered at all and will overlook the unfunny or mildly offensive joke inside the card. In business, though, sending the wrong type of notice is just as bad as forgetting the anniversary in the first place. So, for example, if a person has remembered to serve a notice but sent it to the wrong address, the notice may be ineffective. Or, if it has been sent by ordinary post but it was a requirement of the contract that the notice be sent by special recorded delivery, the notice will equally be ineffective. Or, more recently, a court has decided that even where a tenant given to the landlord a notice to end a lease early and the notice was validly served, the tenant’s erroneous underpayment of rent to the landlord invalidated that notice.
The lesson from this is:
- don’t forget key anniversaries
- diary ahead not just the anniversary date but also the last possible date for when you must take action
- where there are major financial implications of getting the notice wrong, don’t scrimp on costs but get the notice sent in the correct legal form and sent on time.
Lastly, what can a person do who has either failed to send a notice or has sent one but it is invalid? In some cases, it will simply be too late to be able to fix the problem. There are, though, certain cases in which the problem can be fixed, although it will take some time and effort to fix it. Please get in touch with us if you are in the unfortunate position of having forgotten one of these key anniversaries and we’ll do our best to help put things right.
Michael Dewar is an experienced commercial property solicitor providing expert advice and assistance to landlords and tenants in Fife, Edinburgh and across Scotland.