Posted: Wednesday 2 May 2012
Property Litigation in Scotland – what are the trends?
By Hugh Angus
Readers who also see our Real Estate E-Bulletin might have noticed that the number of cases we comment on has stayed fairly constant over the last few years. This is surprising because, for the last three years, the number of cases being heard in court has been going down at about 20% a year, only starting to increase again at the beginning of this year. This was a side effect of the recession that not everyone saw coming. But why have the number of property cases that are worthwhile reporting on stayed much the same? I suspect that most people think it is only worthwhile litigating when there is both a serious dispute and there is not a rising market to allow a “commercial solution” i.e. someone willing to pay to take on the problem. I think this comes out in some key trends in the types of cases:-
- People who bought property, especially new-build residential, at the top of the market seeing if they can find some technicality to get out of the deal. These have included both professional investors and private purchasers. Occasionally they have been successful but I do not see a raft of follow-up claims on solicitors’ professional indemnity policies, so it seems that in most cases the contracts have done what they were supposed to do. As you would expect in Scotland, the courts have been generally keen on enforcing contracts that have been freely entered into. However, the lesson from this is that if you enter into a commercial contract you then regret, you are probably stuck with it - a sign of a good legal system in my view!
- As new lettings dry up landlords have been trying to have leases continue by tacit relocation or arguing that break options have not been exercised, and tenants have been trying to achieve the opposite. Again, few of those attempts have been successful. Anecdotally many landlords and tenants are re-learning the issues surrounding notices to quit from the early 1990s.
- There are a continuing number of repairs disputes under leases, possibly due to the number of early 1980s long leases now coming to an end. There have been a fairly constant number of reported cases, but again anecdotally dilapidations issues are arising without being litigated, as renunciations are often the only way of disposing of a leasehold interest in the current market.
