Acts of the Scottish Parliament

Section 19: Confusio not to extinguish real burden

105.     A real burden (usually) requires both a burdened and a benefited property (section 1(1)), but there is no requirement that the properties be in separate ownership. The term 'confusio' is used to describe the situation where the benefited and burdened proprietors are the same person. Section 19(a) resolves a doubt by making clear that a burden is not extinguished by confusion. This means that the owner of both properties will be able to enforce an obligation against a tenant under section 9(2). Paragraph (b) gives an equivalent rule for personal real burdens.

Section 20: Notice of termination

106.     Sections 20 to 24 introduce a completely new termination procedure for real burdens which are at least 100 years old. Subsection (1) of section 20 sets out the essential criteria. The burden must be at least 100 years old. The 100 years run from the date of registration of the constitutive deed. Normally this would be the date of registration of the disposition or feu disposition creating the burden but if the constitutive deed is a deed of conditions the 100 year period begins on the registration of the deed of conditions even if the burdens are not in fact imposed until a later date. For this purpose variations or renewals (whether by charter of novodamus or judicially, under section 90(1)(b)) are disregarded. If, for example, a burden was created in 1900 and renewed or waived to a certain extent in 1950, the relevant date would still be 1900. The procedure may be used by any owner of the burdened property (including a pro indiviso owner) or any other person (such as a tenant) against whom the burden is enforceable. It comprises two stages: intimation is given under section 21 of an intention to register a notice of termination, and the notice is then executed and registered under section 24. If there are no applications to renew the burden the notice of termination may be submitted for registration. A notice of termination cannot be registered unless a certificate is endorsed on it by the Lands Tribunal under section 23. The form of notice of termination is provided in schedule 2.

107.     Subsection (2) makes clear that an owner (or other person) can continue with a termination process initiated by a predecessor in title. An owner might begin the process of termination, but sell the burdened property before it is complete. The new owner would be able to step into the process. 'Terminator' is used throughout this group of sections to refer to the person who is currently using the procedure.

108.     The termination procedure is not available for all burdens. Subsection (3) sets out the exclusions. They include facility burdens (defined in section 122(1)). These burdens regulate the maintenance, use or management of a common facility. Conservation, maritime, and service burdens are also protected. Paragraph (e) excludes the title conditions that are excluded from the jurisdiction of the Lands Tribunal under section 90(3). These are specified in schedule 11.

109.     Subsection (4) specifies the content of a notice of termination. A statutory form is given in schedule 2. Paragraph (c) makes clear that partial termination is permitted (and see also section 24(1)). Paragraphs (e) and (f) require information about intimation, both in general terms and also in the form of a list of those to whom intimation was sent. This will allow recipients to contact each other and consider the possibility of a joint challenge. There is no requirement to identify the benefited property or properties, and in practice these may often be unknown to the terminator.

110.     Subsection (5) provides that the renewal date stipulated in the notice must be not less than eight weeks after the date of last intimation. The renewal date is, ordinarily, the last day on which the notice may be opposed, by application to the Lands Tribunal for renewal of the burden. An application can only be made after the renewal date with the consent of the terminator (section 90(4)(a)) and then must still be made before the Lands Tribunal have endorsed a certificate on the notice (section 90(4)(b)). The renewal date must have previously appeared in the notice which is sent for the purposes of intimation.

111.     Subsection (6) makes clear that a single notice can be used in respect of more than one burden even if the burdens are not contained in the same deed.

Section 21: Intimation

112.     Intimation is the first stage of the termination procedure.

113.     Subsection (1) imposes a requirement to intimate the proposal to terminate the burden. Intimation must be given to the owners of all the benefited properties, to the holder of any personal real burden, (as defined in section 122(1) and, if the terminator is not the owner (or is only one of the owners), to the owner of the burdened property. As the termination procedure operates to extinguish a burden, it cannot be used to target individual benefited proprietors. All benefited proprietors must be given intimation and the renewal date cannot occur until intimation has been given to all, as the renewal date must always be at least 8 weeks after the last date of intimation.

114.     Subsection (2) explains the permissible methods of intimation. It may be difficult to identify all of the benefited properties. Method (a) involves sending a copy of the proposed notice (with an explanatory note). A form for this explanatory note is contained in schedule 2. Section 124 details the various methods of 'sending' the notice. The notice must be substantially complete, but should not be signed. Method (b) requires the posting of the intimation on the burdened property and on lamp posts in the neighbourhood. The form of this notice is set out in schedule 3. Method (c) is by newspaper advertisement. Evidence of intimation should be retained, for example, recorded delivery slips, a copy of the affixed notice or the advertisement as these may be required by the Lands Tribunal or the Keeper.

115.     Subsection (3) provides that the first method of intimation (directly sending a copy of the intimation) will have to be used to give intimation to the owner of the burdened property, the holder of any personal real burden and the owner of any benefited property which is within four metres of the burdened property. For other benefited proprietors, the terminator has a choice of intimating by sending, or by affixing notices to the burdened property and to lamp posts. Where this is not possible (or where the burdened property is minerals or salmon fishings) intimation may be given by advertisement. In the measurement of the four metres there is to be disregarded (i) pertinents and (ii) any road if of less than twenty metres in width (section 125).

116.     Subsection (4) sets out the content of the advertisement used in method (c).

117.     Subsection (5) obliges the terminator to provide a copy of the proposed notice on request. This will mainly be necessary where intimation has been by lamp post or advertisement (see subsection (4)(c)).

118.     Subsection (6) makes provision for the removal of lamp post notices no later than one week after the renewal date specified in the notice. The person affixing the notice must take care that it remains conspicuous and legible.

119.     Subsection (7) confirms that planning permission is not required for the display of termination notices.

Section 22: Oath or affirmation before notary public

120.     This and the following two sections are concerned with the second (and final) stage of the termination procedure, namely the execution and registration of the notice of termination.

121.     Section 22 deals with execution. Subsection (1) provides that the terminator must swear or affirm before a notary public that the information in the notice is true, and that the notice has been duly intimated. In the normal case this must be done by the terminator personally, but subsection (2) sets out some exceptions. Subsection (2)(b) should be read with schedule 2 to the Requirements of Writing (Scotland) Act 1995, which identifies who may sign on behalf of companies and other juristic persons. 'Notary public' is given an extended meaning, in relation to overseas execution, by section 122(1).

Section 23: Prerequisite certificate for registration of notice of termination

122.     A notice of termination cannot be registered if it is opposed (other than opposed in part). A notice is opposed by making an application to the Lands Tribunal under section 90(1)(b) (and see also section 90(2) for renewal or variation of the real burden (or burdens). Variation is defined in section 122(1) but in this instance does not include the imposition of a new obligation or the creation of a new benefited property (see section 90(5)(b). For the Keeper to register the notice, there must be a certificate from the Lands Tribunal endorsed on or annexed to the notice. Section 23 requires the Lands Tribunal to certify on the notice that no application has been made. Where an application has been received, but it relates to only some of the benefited properties or to only some of the burdens, the Tribunal will be able to give a certificate stating in respect of which benefited properties and/or which burdens an application has been made.

123.     Subsection (1) provides for the Lands Tribunal certificate. A certificate may be given if there has been no application for renewal or variation by the renewal date, or if an application has been made but then withdrawn. Even if an application has been made in respect of some of the burdens or only some of the benefited properties, the Lands Tribunal may still execute the certificate. Where there are several benefited properties, not all of their owners will necessarily apply to renew the burden. Alternatively, where there are several burdens in the notice of termination, a benefited proprietor applying for renewal might be content for some of the burdens to fall and so only apply in respect of certain of the listed burdens. In either case, the application for renewal does not encompass the entire notice of termination: it only applies to some of the burdens or some of the benefited properties. As a result, the notice of termination has not been fully opposed, and may be registered to the extent that it has not been contested. The certificate given by the Lands Tribunal under section 23(1)(b) will list the burdens and the relevant properties that are subject to applications for renewal or variation. When the notice of termination is registered the burdens set out in the certificate will not be extinguished nor will the rights of a benefited property named in the certificate be discharged. If an owner does not make an application for renewal or variation, then his property will cease to be a benefited property in relation to the burden, regardless of what other owners do. The meaning of 'renewal date' is given in section 20(4)(d) and (5) as the date by which an application to renew or vary must be made. The reference in paragraph (b)(ii) of subsection (1) to 'probably or possibly' reflects the difficulty, under the current law, of making an accurate identification of the benefited properties.

124.     Subsection (2) allows a notice of termination to be withdrawn at any time before the certificate is endorsed.

Section 24: Effect of registration of notice of termination.

125.     Section 24 explains the effect of registration. Registration extinguishes the burdens, subject to any qualifications (i) in the notice itself or (ii) in the Lands Tribunal certificate endorsed on the notice.

126.     If, at a later time, opposition was withdrawn by a benefited proprietor, subsection (2) allows a further certificate (under section 23(1)(a)) and a second registration. This second registration will rely upon the second certificate. If, however, the opposition (partial or full) was not withdrawn but the application for renewal or variation was instead refused by the Lands Tribunal and the burden discharged, the proper procedure is to register the Tribunal's order in terms of section 104(2). The notice itself cannot be registered because no certificate can be given under section 23(1).

PART 2: COMMUNITY BURDENS

Section 25: The expression "community burdens"

127.     This section introduces Part 2 of the Act, which is concerned with community burdens. The label 'community burden' is a new term, but the types of burden that can be included under this name already exist in large numbers. The rules in Part 2 for community burdens are essentially designed to allow burdens affecting communities to be governed by majority rule. 'Communities' can take a variety of forms, for example, modern housing estates, tenements, terraces, sheltered and retirement housing and business parks. The term 'community' is used in the Act in a technical sense (for which see section 26(2)). A community is a group of four or more properties all subject to the same or similar burdens and which can be mutually enforced. Mutually enforced means that the owner of each property in the community will be able to enforce all or at least some of the burdens against the others. Part 2 applies to all community burdens, whether created before or after the Act comes into force (section 119(10)).

128.     Subsection (1) defines 'community burdens'. Its essence is the mutual enforceability of common burdens. A common scheme refers to the imposition of burdens that are normally, but not necessarily, exactly the same for each property. Community burdens only exist where burdens are imposed under a common scheme on four or more units and each of those units can enforce all or some of those burdens against the others. The meaning of 'unit' is given in section 122(1).

129.     Subsection (2) is included to ensure that there is no doubt that where burdens have been imposed under a common scheme in relation to a sheltered or retirement housing development the fact that no burdens may have been imposed on a unit retained for special use (typically as a warden's flat) would not prevent the whole development from being a community for the purposes of Part 2 of the Act. Section 26(2)(b), which defines the term 'community' in the legal sense used by the Act expressly provides that a unit, such as a warden's flat, that is not subject to community burdens is nevertheless part of the community. This is an exception to the general rule that to form part of the community it is necessary for the unit to be a burdened property under the common scheme as well as a benefited property.

Section 26: Creation of community burdens: supplementary provision

130.     Community burdens are real burdens and are generally subject to the same rules as other real burdens. Section 2 makes general provision as to what a real burden may do. Subsection (1) amplifies those provisions by giving a non-exhaustive list of possible content for community burdens. This is in recognition that communities may require a degree of regulation and management to put it beyond doubt that certain obligations can be validly created as community burdens. There is an equivalent provision in section 3(4) to make it clear that a community burden may be for the benefit of the community rather than individual units. The meaning of 'manager' is given in section 122(1).

131.     Subsection (2) defines 'community'. This refers back to the definition of "community burdens" in section 25. A community is made up of units all burdened with obligations imposed under the same common scheme. It comprises the units which can enforce or are burdened by some - not necessarily all - of the burdens imposed under the common scheme. This means that a community remains the same notwithstanding that one or more units may cease over time to be subject to or entitled to enforce a particular burden. This may happen, for example, if the owner of a burdened property obtains a discharge. Paragraph (b) takes account of the fact that a unit in sheltered or retirement housing which is used in a special way (for example as a warden's flat) might not itself be subject to the burdens. Nonetheless it is part of the community, and is, for example, counted for the purposes of majority decision-making (for which see sections 28 to 37).

Section 27: Effect on units of statement that burdens are community burdens

132.     This section introduces a conveyancing shortcut. The effect of using the term 'community burdens' in a constitutive deed will be to create reciprocal enforceability. That is one of the two criteria for community burdens set out in section 25(1). Notwithstanding the use of the term, however, the burdens will not qualify as community burdens unless the other criterion (common scheme burdens imposed on four or more units) is also met. The term 'community burden' will not have to be used in order to create a community burden. It could simply be called a real burden: the criteria in section 25 are the decisive factors in every case.

Section 28: Power of majority to appoint manager etc.

133.     This is the first of a group of sections (sections 28 to 31) which set out some basic rules for the management of a community. The rules are default rules - or in other words, they apply only to the extent that alternative (or contrary) provision is not made in the titles.

134.     Section 28 itself confers on the owners of a majority of units various powers in relation to managers. The meaning of "manager" is given in section 122(1).

135.     Subsection (1) sets out the powers in question. Since acts carried out under paragraphs (a) and (b) bind both the dissenting minority and also successors (section 30), it is necessary - through paragraphs (c) and (d) - to allow the acts to be undone if a different majority can be assembled. Although paragraph (a) permits the majority to specify the terms of a manager's appointment and paragraph (b) permits a majority to confer powers exercisable by a majority on a manager, this has to be read alongside the opening paragraph of the subsection which provides that it is subject to the terms of the community burdens. This means that paragraphs (a) and (b) do not permit a majority to interfere through a manager with the basic management regime set out in the titles. There is no limit on who can be appointed as a manager under paragraph (a): it could be one of the owners or a professional property manager. The reference to section 54(5)(a) means that in sheltered or retirement housing a majority of at least two thirds of the units will be required in order for them to use the power under paragraphs (b) or (c). The ability of a majority to dismiss a manager under paragraph (d) is to apply only where the title deeds do not provide for an alternative majority (but this should be considered alongside section 64 which provides for a default two thirds majority for dismissal that overrides the title deeds). The power to dismiss a manager under paragraph (d) will not be operational where a valid manager burden is in existence, hence subsection (1) is subject to section 63(8).

136.     Subsection (2) gives a non-exhaustive list of the powers that might be conferred on a manager. Paragraph (b) of subsection (1) provided that only "their" powers (i.e. the powers of a majority, whether collectively or individually) may be conferred on a manager. The majority would obviously be unable to confer on a manager the power to do something that they themselves could not. The powers mentioned in paragraphs (a) and (c) in subsection (2) are collective powers of a majority, and include powers given by virtue of sections 29 and 32 to 37. The power mentioned in paragraph (b) is an individual power: it is of the very essence of a community burden (section 25(1)(b)) that the owner of each unit has a right to enforce the community burdens. The conferral of powers may be subject to qualification. The extent of the powers delegated is a matter for the majority's discretion. Section 54(5)(a)(ii) provides that power to vary burdens under paragraph (c) may only be delegated to a manager in a sheltered or retirement housing complex if the burdens are not core burdens (as defined by section 54(4)). The power to discharge community burdens may not be conferred on a manager in this situation.

137.     Subsection (3) makes provision for voting in a case where a unit is owned in common. The most frequent example of this is where husband and wife own the property together, but it is possible for other arrangements to occur and for ownership to be split unequally e.g. on a 75%/25% basis. Subsection (3) means that the owner of more than a one half share of a unit, would be able to exercise the vote in respect of the property for the purposes of subsection (1). If several co-owners taken together owned more than a one half share of the unit, then they would be able to collectively exercise the vote attached to the unit (provided, of course that they shared the same voting intention). Where, however, the unit is held in equal shares and the owners who wish to use section 28 do not own a majority share of the unit, that unit would not count towards a majority. Where husband and wife own equal pro indiviso shares in a unit they would both have to agree for the unit to be included in the calculation of the majority.

138.     Subsection (4) allows the powers in subsection (1) to be used for managers appointed in some other way (i.e. other than by a majority of owners). Thus a manager might have been nominated in the constitutive deed either as a first manager (under section 26(1)(d)) or by virtue of a manager burden (under section 63).

Section 29: Power of majority to instruct common maintenance

139.     Section 29 applies where there is no provision in the title deeds of a particular community for decision making on common maintenance. It provides a default mechanism to allow the owners of a majority of units to arrange for maintenance to be carried out and paid for. In order for this to be fully effective, the section provides that a majority would be able to require each owner to deposit a contribution in advance of that person's estimated share of the cost. 'Maintenance' is defined in section 122(1) and includes repairs. However, the section does not apply to improvements unless they are reasonably incidental to the maintenance. 'Unit' is also defined in section 122(1).

140.     As subsection (1)(a) makes clear, section 29 is concerned with common maintenance, that is to say, with maintenance obligations imposed by community burdens on more than one unit. Paragraph (a) makes clear that there must be a community burden providing for common maintenance in the title deeds for section 29 to operate. The section is only concerned with majority enforcement of these burdens: it is not creating new maintenance obligations where none existed previously. Paragraph (b) of subsection (1) requires the cost of carrying out the works to be fully apportioned by the community burdens.

141.     Subsection (2) sets out a list of powers. These are exercisable, not by a majority of units in the community, but by a majority of the units subject to the particular maintenance obligation (which may not be the same thing). The powers allow the majority to require each owner to deposit a contribution in advance based on an estimate of that person's share of the cost. Paragraph (b) allows the money to be collected in advance of the repair. Paragraph (e) allows owners to change their minds. The powers are default provisions and the community burdens may provide for different mechanisms to apply.

142.     Subsection (3) makes provision for voting in a case where a unit is owned in common. The most frequent example of this is where husband and wife own the property together, but it is possible for other arrangements to occur and for ownership to be split unequally e.g. on a 75%/25% basis. Subsection (3) means that the owner or owners of more than a one half share of a unit would be able to exercise the vote in respect of their property for the purposes of subsection (2).

143.     Subsection (2) requires a notice to be sent to each owner detailing the sum of money to be deposited. Subsection (4) provides that when this happens owners must be given certain additional details in order to provide them with information regarding the nature of the works, the cost, and timescale for the works, and the apportionment of the cost and how and where the monies collected will be held.

144.     Subsection (5) provides that the monies must be held in an interest bearing bank or building society account. The money is to be held by the account holders in trust for owners who have deposited money (subsection (8)). The account holders do not have to be owners of units within the community: the account holder could be, for example, a solicitor acting as agent or a manager. The account should only be operable by those authorised by the majority to do so in terms of paragraph (c) of subsection (2).

145.     Subsection (6) requires the owners to be notified of any modification or revocation that affects the information given under subsection (4).

146.     Subsection (7) makes provision for exhibition of tenders received for the works and for a refund if the work has not commenced within a certain period. If, however, the works have commenced before the demand for a refund is received, then there is no obligation to repay the monies even if work commenced after the date stated in the timetable.

147.     Subsection (8) makes provision for the refunding of any monies left over after the work has been completed. In the absence of alternative written agreement, each owner should receive the amount contributed by him or her plus accrued interest less his or her share of the cost of the works.

Section 30: Owner's decision binding

148.     Section 30 confirms the principle of majority rule. Decisions, and acts (such as the appointment of a manager), bind both the dissenting minority and also incoming owners. An incoming owner would, for example, be liable for maintenance costs which had already been agreed to (and see sections 9(1) and 10). The section is not confined to the default code but applies also to decisions and acts carried out in terms of the title deeds.

Section 31: Remuneration of manager

149.     If a professional manager is used, a fee will be due, probably at regular intervals. The amount is a matter for negotiation with the manager. Section 31 apportions that amount equally among owners in the community (subject to different provision in the titles). The second half of section 31 provides rules for apportioning liability between co-owners. The manager is entitled to payment in full from a co-owner. The co-owners are only liable in a question amongst themselves for a share equal to their share of ownership of the unit.