A Lease, Or Not A Lease? That Is The Question

• Published date: 05 July 2023
• Subject Matter: Real Estate and Construction, Construction & Planning, Landlord & Tenant - Leases
• Law Firm: MacRoberts
• Author: Miss Lynsay Cargill

The Sheriff Appeal Court has issued its judgment on the question of whether the occupiers of a property were subject to a licence agreement or a private residential tenancy. The case is a lesson in the importance of clear drafting.

The Sheriff Appeal Court has issued its judgment on the question of whether the occupiers of a property were subject to a licence agreement or a private residential tenancy. The case is a lesson in the importance of clear drafting.

The Facts

Jamie and Louisa O'Rourke moved into a residential property to redecorate and carry out renovations on behalf of Kirstin Sherriff, the owner. When the owner tried to recover possession of the property, the occupants refused to move out. They sought to argue that they occupied the property under a private residential tenancy (a type of lease) and not a license as claimed by the owner.

The owner raised an action for recovery of possession in the Sheriff Court, arguing that the contract was a licence and so could be dealt with by the Sheriff Court. The occupiers argued that they were subject to a private residential tenancy, which falls under the jurisdiction of the First-tier Tribunal for Scotland, and offered them more protections.

The Sheriff Court heard evidence and considered the terms of the contract in dispute, before agreeing with the owner that the contract was a license. The occupiers appealed that decision to the Sheriff Appeal Court.

The Decision

The Sheriff Appeal Court highlighted that this dispute was one of contractual interpretation. They concluded that the contract was indeed a license and upheld the decision of the Sheriff Court. The full judgment can be found here.

One of the reasons...