Pay now – argue later... a double win for landlords in Scotland.
A recent Supreme Court decision in England has considered the effect of a "conclusive" service charge certificate in a commercial lease, holding that while conclusive as to the amount the tenant must pay, it did not prevent a subsequent dispute over the underlying debt. It can be summarised as requiring a tenant to "pay now, argue later ".
Our English Real Estate Disputes partner Chris Perrin commented on the implications of the case here. This decision would be persuasive to a Scottish Court considering the meaning of a similar certification provision in Scotland.
This may be of particular importance to a Scottish landlord or tenant in considering their position in a dispute over service charge where the Lease allows for the unique and powerful Scottish remedy of summary diligence. This is the process which allows a landlord to use a formal extract copy of a lease to skip the need to raise a court action for payment and proceed directly to enforcement (including a charge for payment or bank arrestment).
If the Supreme Court's reasoning is followed, this is likely to widen the opportunities for landlords to use summary diligence to enforce payment – and crucially minimising the risk of challenge from the tenant on the basis that the underlying debt is in dispute.