If commercial property landlords can take on Amazon, you can challenge your tenants too

Commercial Property

Online retail giant Amazon was recently told to leave a distribution centre in Gourock, after M7, their landlords, served them with an eviction notice. While ending a commercial lease may appear difficult, this case showed that – providing you follow the law – even the most powerful tenants can be evicted.

The law and commercial real estate in Scotland

It's believed the disagreement between M7 and Amazon developed from a complex negotiation over rent. The landlord gave just under six months notice to quit the site – more than the standard 40 days. The retailer argued they were entitled to one year's notice, but the Court of Session ruled against this. In Scotland, where the Amazon case took place, commercial leases automatically renew if neither the tenant nor the landlord formally decides to end the tenancy. This is called 'tacit relocation'.  

Pressure on commercial landlords

Despite Amazon's vast financial resources, the court supported M7. This verdict should be heartening for commercial real estate owners, as retail chains have recently been using their influence to drive rental prices down. Arcadia – the parent group behind shops including Topshop and Monsoon – has asked for rent reductions as part of its insolvency proceedings. This has led to other chains, such as Primark, following suit in order to stay competitive.

How to remove problem tenants from your commercial property

As in Scotland, commercial tenants in England and Wales are allowed to continue occupying the property after the lease's end date if no formal notice is given. This is called 'security of tenure'. If tenants are in rent arrears or are breaching your contract is some other way, it's important to promptly give written notice as the lease nears an end. That way you can recover possession of the property without further legal action, protecting your commercial property investment. 

If rent arrears are a problem, find out how Duke's Bailiffs can help – whether you want to end the lease or not.