The Automatic Continuation Bill: Transforming tacit relocation in Scottish lease law

The Scottish Parliament is poised to modernise a long-standing aspect of lease law with the introduction of the Automatic Continuation Bill. This proposed legislation seeks to replace, or significantly alter, the doctrine of tacit relocation, a centuries-old legal principle that governs what happens when a lease ends without formal renewal or termination.

What is tacit relocation?

In Scottish property law, tacit relocation means a lease will automatically renew on the same terms if neither the landlord nor tenant serves notice to end it at least 40 days before the lease end date.

While tacit relocation has provided stability and predictability, critics argue that it is outdated, overly formalistic, and ill-suited to the dynamics of modern property management and leasing practices.

From a modern legal perspective, the repeal or reform of tacit relocation is long overdue. Tacit relocation is rooted in a time when property dealings were far less complex. In today’s legal environment, where lease terms are negotiated by professional agents and monitored with digital systems, relying on implied consent feels both antiquated and risky.

For example, a tenant client has a lease for five years ending on 1^st June 2025. When that date arrived, they cleared the property of all fixtures and fittings and returned an empty premises to the landlord.

The landlord informed them that no notice had been served 40 days prior to the end date (being the statutory period for notice) and so the landlord was under no obligation to accept the termination of the lease. Therefore, the lease automatically continued under the rules of tacit relocation for another year with the tenant paying rent and all service charges and other outlays.

If 40 days before the next termination anniversary the tenant or landlord fails to serve notice by the required 40 days, then the lease can continue for another year and so on.

The Bill is still under consultation and legislative refinement as of mid-2025 but proposes a more streamlined and transparent mechanism for lease continuation. The core changes it introduces include:

• Under the Bill, leases will no longer rely on presumed or implied consent for renewal. Instead, if no formal action is taken by the lease end date, the lease will automatically continue for a fixed, statutory period, likely one year for commercial leases and possibly less for residential ones.
• The Bill aims to introduce clearer, more consistent rules around notice to quit, potentially replacing the 40-day notice rule with a standardised period (e.g., 90 days), thereby reducing ambiguity and disputes.
• Automatic continuation will not be indefinite. The Bill may limit the number of statutory continuations or introduce a formal opt-out system, requiring landlords or tenants to actively terminate or renegotiate the lease after a set number of automatic renewals.

The Automatic Continuation Bill represents a major shift in how lease renewals are handled in Scotland, aiming to bring clarity and modernity to an area of law shaped by centuries of precedent. If enacted, it will effectively replace tacit relocation with a statutory model of lease continuation, reducing legal ambiguity and making lease management more straightforward for landlords and tenants alike.

It is currently at stage 1 in the Scottish Parliament, with the deadline for completing that stage set for 19 September 2025, and a vote on its general principles expected before the end September 2025.

For commercial leases, particularly those managed in large portfolios, the change could eliminate costly mistakes where leases are unintentionally extended, sometimes for years, due to a missed deadline.