In the film Groundhog Day, Bill Murray's character is forced to relive the exact same day, on repeat, until his positive actions break the loop. Similarly, through tacit relocation, a tenant or landlord may awake on the day following the expiry date in a lease only to find that it has been extended by up to an entire year, on the exact same terms.
If the lease is for less than one year, it will be continued by the same duration as the original lease. If the lease is for one year or more, it will be continued for a year.
This can have severe ramifications. A tenant may be left needing to pay a whole year's expenses with no intention of occupying the premises. A landlord may be prevented from letting to a more profitable tenant or needing to put plans on hold to develop.
Notice to Quit: Best Practice
The best way to avoid tacit relocation is to send clear and explicit written notice, in compliance with the notice provisions of the lease, of your intention to terminate the lease at the expiry date.
Does notice to quit need to comply with the notice provisions?
In the case of Brucefields, the Sheriff found that because a notice to quit is a common law notice it doesn't need to comply with the notice provisions within a lease. For example, if a lease says that all notices under a lease need to be in writing, but clear, explicit and timeous notice to quit is given verbally over the phone, based on Brucefields, sufficient notice will have been given.
However, there are rumblings in the legal community that this could be challenged. That is because it is argued that tacit relocation is an intrinsic part of a lease and therefore the requirement to give notice to quit is also an intrinsic part of the lease. As such, the notice needs to comply with the notice provisions. This argument has yet to be made in court – but to be safe, follow the notice provisions!
How much notice needs to be given?
Under the common law, a notice to quit should be received by the other party 40 clear days in advance of the end date. 40 clear days normally means at least 42 days. That is because the day the notice is received and the end date of the lease aren't considered full days. In practice this means you should send the notice to quit well in advance of 42 days of the expiry date to ensure it is received on time and to give plenty of time to resend if there are any issues. Deemed service provisions in the lease should also be considered.
Who does the notice need to be sent to and how should it be sent?
The notice should be sent to the other party to the lease. You should be careful to ensure the other party hasn't changed since you first entered the lease. The notice provisions should also be checked to see if they specify where the notice needs to be sent.
You should avoid issuing a notice to quit to an agent of the other party, because if the agent does not have authority to accept service of the notice, it will likely be deemed invalid.
Best practice not followed
If you've unwittingly found yourself potentially impacted by tacit relocation, it is important to take legal advice early. Depending on the circumstances of your case, it could be argued that the way you acted in the run up to the expiry date or the correspondence exchanged between parties is enough to bring the lease to an end. That argument will be stronger if the lease doesn't contain a notice provision.