Acts of the Scottish Parliament

Section 65: Manager: transitory provisions

291.     Not all management provisions in title deeds are valid. Section 65, as a transitional measure, ratifies any appointment made under such provisions. The manager will then be able to continue to act after the appointed day unless or until dismissed under sections 28(1)(d) or 64.

Section 66: The expression "related properties"

292.     Section 66 gives an indicative definition of related properties, that is those properties for which a manager might be appointed in terms of section 63. These are properties which might be conveniently managed together because of shared property or facilities or membership of a common scheme.

293.     The effect of subsection (2) is to prevent the requirement of ownership of a managed property (imposed by section 63(2)) from being satisfied merely by ownership of a common facility or, in the case of a sheltered or retirement housing development, of a unit used in some special way (for example, the warden's flat). This is where the warden's flat is not subject to the same conditions as the rest of the community.

Section 67: Discharge of rights of irritancy

294.     Irritancy in this context means confiscation of the (burdened) property as a penalty for non-compliance with a real burden. Section 67 abolishes the remedy, with effect from the day after Royal Assent (section 129(3)).

Section 68: Requirement for repetition etc. of terms of real burden in future deed

295.     In imposing real burdens there is sometimes added a requirement that the burdens be repeated in all future transmissions of the land on pain of nullity. The enforceability of this requirement is open to question; but special statutory provision (section 9(3) and (4) of the Conveyancing (Scotland) Act 1924) has been made for curing a failure to comply. Section 68 dispenses with any requirement to repeat burdens. The opportunity is also taken, in schedule 15, to repeal section 9(3) and (4) of the 1924 Act. This is a technical change only, and no change of practice is envisaged. In Sasine transactions and first registrations, dispositions will continue to list the burdens writs in order to avoid a claim in warrandice in respect of latent burdens.

Section 69: Further provision as respects deeds of variation and of discharge

296.     This section makes additional provision in respect of extinctive deeds.

297.     Subsection (1) makes clear that such a deed need not be granted in favour of any particular person. This removes the current uncertainty in the law. However, there would be no objection if a grantee were named.

298.     Subsection (2) allows anyone who is subject to a real burden — including a tenant or other temporary possessor (see section 9(2)) — to procure a discharge or other extinctive deed and to register it in the property register.

299.     The normal rule is that only a grantee can register: see the Abolition of Feudal Tenure etc. (Scotland) Act 2000 section 5(1) (Register of Sasines), and rule 9(1) of the Land Registration (Scotland) Rules 1980 (Land Register). Subsection (3) allows registration by a granter in cases where the deed is granted by a majority of owners, or by a manager. In at least some of these cases the grantee might oppose the deed and would not therefore be willing to register. In other cases allowing a manager to register is administratively convenient.

Section 70: Duty to disclose identity of owner

300.     Usually, affirmative burdens are enforceable only against the owner of the burdened property (section 9(1)); but since an 'owner' includes a person whose title has not been completed by registration (section 123(1)), the identification of the current owner may not always be easy. Section 70 assists the enforcer by requiring any previous owner to pass on information. See section 8(2) and (4) for a list of those who have title to enforce a real burden.

PART 6: DEVELOPMENT MANAGEMENT SCHEME

301.     Part 6 of the Act reintroduces the Development Management Scheme which formed part of the recommendations made by the Scottish Law Commission. The Scheme proposed by the Commission can be found in schedule 3 to the draft Bill attached both to the Commission's Report on Real Burdens and the Executive's Consultation Paper on the draft Bill [http://www.scotland.gov.uk/consultations/justice/dtcb-00.asp]. The Commission's Scheme recommended the creation of a new form of corporate body to form the Owners Association to run a development in accordance with the terms of the Scheme. As the creation and regulation of such a corporate body is in terms of the Scotland Act 1998 reserved to the Westminster Parliament, the Scheme itself does not form part of the Act. The Scheme will be set out in a statutory instrument made by the Secretary of State under section 104 of the Scotland Act 1998. Part 6 provides for the manner in which the Scheme can be applied and disapplied. As the Scheme is made up of rules rather than real burdens section 72 applies various of the provisions relating to real burdens to the rules in the same manner to the way the provisions apply to community burdens.

Section 71: Development management scheme

302.     Subsection (1) of section 71 allows the owner or owners of land to apply the Development Management Scheme to that land. The Development Management Scheme is applied by the registration of a deed of application. The Scheme only applies if a deed of application is registered: it has no automatic application. There is no special form of deed of application. It must be granted by the owner of the property in question. "Owner" includes a person who has right to the property but has not completed title by registration (section 123(1)(a), but (section 60 applied by section 72) there then must, unless the land is already registered on the Land Register, be a deduction of title. An owner "grants" a deed by subscribing it in accordance with section 2 of the Requirements of Writing (Scotland) Act 1995, and in practice the deed will also be witnessed under section 3 of that Act. The Scheme takes effect, either immediately on registration, or on a date identified in terms of paragraph (a) or (b). This follows the pattern of section 4(1). The Scheme is defined in subsection (3). The Scheme is to be set out in an order made under section 104 of the Scotland Act 1998. Insofar as that order permits the Scheme may be applied with variations to a particular development. All the rules of the Scheme for any particular development will therefore be set out in the order or in the deed of application itself. For ease of reference and drafting the rules set out in the order may be repeated in full in the deed of application. Variations to the rules set out in the order may include additional rules as well as changes (to the extent permitted) to the rules in the order.

303.     Subsection (2) requires the deed of application to include certain information. The deed of application must describe the development, define Scheme property and unit for the purposes of the particular Scheme and give the name of the owners association to be established by the Scheme. The name of the owners association must begin or end with the words "Owners Association" in order to ensure that any party dealing with the body can be made aware of its status. The deed of application must also name the first manager of the owners association.

304.     Subsection (3) defines the Development Management Scheme by reference to the order to be made under the Scotland Act 1998. The definition also takes account of the fact that the Scheme is likely to be applied with variations to any particular development with the result that there may be many different versions of the Scheme. While, therefore, it is only possible to apply the Scheme set out in the order (with variations), once applied each different version of the Scheme is included within the definition of the Development Management Scheme. The need for this distinction is clear from section 73 which makes provision for the particular Scheme applied to a development to be disapplied.

Section 72: Application of other provisions of this Act to rules of scheme

305.     Although the rules of the Scheme are not real burdens, they have a close functional resemblance, particularly to community burdens. This is acknowledged by section 72, which applies a number of provisions from parts of the Act concerned with real burdens. Scheme rules are not covered by the definition of "title condition" in section 122(1) but it is possible for an order to be made under section 122(1) to prescribe as title conditions other conditions relating to land, such as the rules of a Development Management Scheme.

Section 73: Disapplication

306.     Once applied to a development by a deed of application under section 71, the Scheme continues to apply unless or until it is formally disapplied. Disapplication means removing the Scheme completely so that it no longer affects all or part of the development. Disapplication is to be distinguished from the discharge or variation of individual rules of the Scheme. Subsection (1) provides a mechanism to disapply the Scheme. Essentially a Development Management Scheme is disapplied by registering a deed of disapplication against the development. There is no special form of deed required. The deed is granted by the owners association for the development in accordance with the Scheme. For example the Scheme may provide for the Scheme only to be disapplied following a special majority of owners at a general meeting.

307.     Subsection (2) enables the deed of disapplication not only to disapply the Development Management Scheme but to impose real burdens to replace the Scheme. The deed of disapplication is a constitutive deed but the normal requirements of section 4 are relaxed to allow the owners association rather than all the owners of the individual parts of the development to grant the deed.

308.     Section 74 requires the owners association to intimate a proposal to disapply the Development Management Scheme to all the owners of the individual units in the development. In terms of section 74(3) each owner has 8 weeks in which to object to the disapplication of the Scheme by making an application for preservation of the Scheme to the Lands Tribunal. Subsection (3) introduces safeguards for the owners of units who may not wish to see the Development Management Scheme disapplied. Registration of a deed of disapplication will not either disapply the Scheme nor create real burdens unless it is endorsed with a certificate from the Lands Tribunal stating either that no applications for preservation of the Scheme have been received by the Tribunal or any such application has been withdrawn. If an application is made to the Tribunal for preservation of the Scheme then it is granted as of right if not opposed (section 99). If the application for preservation fails then the Scheme is disapplied not by registration of the deed of disapplication but by registration of the order of the Tribunal.

309.     Subsection (4) means that before submitting the deed of disapplication for registration the owners association must swear or affirm before a notary public (and endorse the deed accordingly) as to the date on which the objection period expires and that section 74 has been complied with. Subsection (5) means that an authorised person may so swear or affirm for the owners association.

Section 74: Intimation of proposal to register deed of disapplication

310.     Subsection (1) requires the owners association to intimate any proposal to disapply the Development Management Scheme to all the owners of the units in the development.

311.     Subsection (2) provides that intimation is to be given by "sending" a copy of the deed along with a notice. There is no prescribed form of notice but the notice must both state the effect of registration of the deed of disapplication and inform the owner of the right to object to the disapplication of the Scheme by making an application for preservation of the Scheme to the Lands Tribunal. It must also state the date by which an application to the Tribunal has to be made.

312.     Subsection (3) provides that an owner who has not already agreed (perhaps because they were not present at a general meeting) may apply for preservation of the Scheme during the period of 8 weeks following the last date of intimation to the owners. While intimation must be given to all owners not all owners will therefore have a right to object.

PART 7: SERVITUDES

313.     Part 7 of the Act does not attempt to rewrite the common law on servitudes: the provisions of the part are narrow and focused. However, the Act does provide a number of changes to align the law of servitudes with the reformed law of real burdens. Under the existing law servitudes can exist in two categories: positive and negative. A positive servitude permits limited use of a property, such as a right of access or the running of a pipeline. In theory it may also have been possible to create this type of servitude as a real burden. Negative servitudes are uncommon and thought to be confined to restrictions on building, especially for the protection of light or prospect. Section 79 provides that it should no longer be possible to create negative servitudes. Obligations of this type will have to be created as real burdens in the future. The terminology employed reflects the more modern language used in the rest of the Act: 'benefited property' and 'burdened property' rather than the traditional 'dominant tenement' and 'servient tenement'.

Section 75: Creation of positive servitude by writing: deed to be registered

314.     Servitudes are similar to real burdens, in that they require both a benefited and a burdened property and they are obligations that run with the land. Unlike burdens, servitudes do not currently have to be registered.

315.     Section 75 provides that in future a deed that creates a positive servitude will always have to be registered against both the benefited and burdened properties. Under the present law, the right to a servitude created in a deed can be completed by either possession or registration against either property. Subsection (1) requires registration against both properties, in a similar way to the new requirement for real burdens (for which see section 4(5)). Section 120 will apply; therefore a disposition which includes a grant of servitude cannot be registered against only the property being conveyed. Possession is no longer sufficient. By section 122(1) 'registration' means registration of the servitude in the Land Register or recording of the deed in the Register of Sasines. The requirement is expressed negatively, and no rule is given as to the time of creation. The subsection does not provide rules for the constitution of the deed, though both properties will have to be sufficiently described for registration to occur. Subsection (1) has no effect on servitudes created by other means, such as by positive prescription (for which see subsection (3)), or by implication in a deed. Nor (section 119(8)) does it apply to deeds executed before the appointed day.

316.     Subsection (2) removes the common law rule that benefited and burdened properties must be in separate ownership at the time of registration. In future the servitude will not necessarily be created at registration: it will lie dormant until the burdened and benefited properties come into separate ownership (contrary, in Land Register cases, to section 3(4) of the Land Registration (Scotland) Act 1979).

317.     Subsection (3) makes two qualifications to the requirement of dual registration set out in subsection (1). Section (3)(1) of the Prescription and Limitation (Scotland) Act 1973, referred to in paragraph (a), allows a servitude to be created by unregistered deed followed by twenty years possession. Paragraph (a) ensures that section 75 will not preclude the creation of servitudes by prescription. Paragraph (b) exempts pipeline servitudes from the registration requirement on the basis that such servitudes may affect a substantial number of properties.

Section 76: Disapplication of requirement that positive servitude created in writing be of a known type

318.     Unlike burdens, servitudes do not under the current law have to be recorded, and it is possible for them to arise by implication or prescription. To regulate their use, servitudes are restricted into certain types and categories by a fixed list (numerus clausus) that has been derived from Roman law. Because registration is not currently required, the list offers some assurance that any possible servitudes on land are limited in type. As registration will now be required for servitudes created by deed, section 76 provides that these servitudes will not have to fit into the list. The fixed list remains in place for deeds not created by registered deed.

319.     Even without the fixed list, the question of what may constitute a valid servitude is subject to a number of limitations. Subsection (2) prohibits the creation of a servitude that is repugnant with ownership. This mirrors the provision for real burdens contained in section 3(6).

Section 77: Positive servitude of leading pipes etc. over or under land

320.     There has been a doubt over whether a right to lead a pipe, cable, wire or other such enclosed unit over land could be constituted as a positive servitude. Section 77 deems this always to have been the case. Pipeline servitude is to be included in the fixed list of servitudes.

Section 78: Discharge of positive servitude

321.     Under the present law a deed discharging a servitude does not have to be registered. Section 78 introduces a requirement of registration where the servitude appears on the register against the burdened property. The discharge need not be registered against the benefited property, but section 105 gives the Keeper discretion to make consequential amendments to the benefited property's title sheet. Registration will be required for any servitude that appeared on the title sheet of a burdened property, regardless of how the servitude had come to be entered on the title sheet (i.e. if it had been noted in the title sheet as anticipated by paragraph (b) of the section). Section 78 does not apply to discharges executed before the appointed day (section 119(8)). Further, it does not affect other methods of extinguishing a servitude, such as negative prescription or confusion.

Section 79: Prohibition on creation of negative servitude

322.     Negative servitudes are uncommon and thought to be confined to restrictions on building, especially for the protection of light or prospect. This sort of obligation is more typically imposed as a real burden. Section 79 prevents the creation of negative servitudes on or after the appointed day. Obligations of this type will have to be created as (negative) real burdens in the future: see section 2(1)(b). All servitudes in the future will therefore be positive in nature.

Section 80: Negative servitudes to become real burdens

323.     This is the first of two transitional provisions consequential on the realignment of the boundary between real burdens and servitudes. Section 80 provides for the conversion of all existing negative servitudes into real burdens.

324.     Subsection (1) provides for the automatic conversion of negative servitudes into negative burdens (section 2(2)(b) defines a negative burden as an obligation to refrain from doing something). This real burden is referred to as a 'converted servitude' in section 80.

325.     Subsections (2) and (3) provide for the extinction after ten years of all negative servitudes (now negative burdens) which were not, before the appointed day, registered against the burdened property. The delayed extinction is to give the opportunity to register a notice under subsection (4).

326.     Subsection (4) provides the mechanism to preserve a converted servitude during the ten years beginning with the appointed day. This is achieved by the owner of the benefited property registering a notice of converted servitude in approximately the same form as contained in schedule 9. Registration of this notice means that the converted servitude is not extinguished under subsection (2). Any owner, including a pro indiviso owner, may register. This procedure is used where the converted servitude is not already registered against the burdened property at the appointed day. Where the servitude is already registered, subsection (3) will apply to preserve it.

327.     Subsection (5) specifies the content of a notice of converted servitude. A statutory form is given in schedule 9. The notice may be restricted to a part only of the benefited or burdened properties (see paragraphs (a) and (b)). A title completed by registration is not required (see the definition of 'owner' in section 123(1)), but in that case paragraph (c) requires that the midcouples be listed. In Land Register cases the Keeper will no doubt wish to inspect the midcouples. The meaning of 'midcouples' is given in section 122(1) (as a link in title used in a deduction of title under the Conveyancing (Scotland) Act 1924). Paragraph (f) is the equivalent of section 50(2)(e) and avoids the need for a separate notice of preservation under that provision.

328.     Consistent with section 4(5) (for new real burdens), subsection (6) requires dual registration of a notice against both the burdened and benefited property.

329.     Subsection (7) imports the requirement of section 50(4) and (5) that the notice be sworn or affirmed before a notary public.

330.     Section 115, referred to in subsection (8), makes further provision as to notices of converted servitude (and of preservation).

Section 81: Certain real burdens to become positive servitudes

331.     In general obligations allowing limited use of the burdened property are positive servitudes. Subsection (1) converts real burdens consisting of a right to enter or make use of the burdened property into positive servitudes after the appointed day. This is the partner to the conversion of negative servitudes into burdens in section 80. Section 2(1) prevents the creation in future of rights to enter or use property as real burdens other than where they are ancillary burdens (see section 2(3) and (4)).

332.     Paragraph (a) of subsection (2) makes clear that section 81 does not apply to feudal burdens which are extinguished on the appointed day by section 17(1) of the 2000 Act. Paragraph (b) excludes by far the most common case of real burdens of entry and use, namely those burdens ('ancillary burdens': see section 2(4)) whose purpose is ancillary to some other type of real burden. The exclusion is made necessary by the fact that ancillary burdens are permitted in the future by section 2(3). These ancillary rights exist where the right to enter or use the burdened property is incidental to another condition.

PART 8: PRE-EMPTION AND REVERSION

333.     Part 8 of the Act is concerned with rights of pre-emption imposed as real burdens. Sections 86 and 87 also deal with specific forms of reversion created under two pieces of 19^th century legislation. Section 8(4) states that only the owner of a benefited property may enforce a right of pre-emption, redemption or reversion constituted as a real burden but this does not apply where the right of pre-emption is a personal real burden such as a rural housing burden.

Section 82: Application and interpretation of sections 83 and 84

334.     The effect of section 82 is to apply the provisions of section 83 and 84 to the same types of pre-emption that are covered by section 9 of the Conveyancing Amendment (Scotland) Act 1938. These are the pre-emptions that are restricted to a single opportunity to accept or refuse an offer to sell. This restriction applies to all pre-emptions ever created in feudal burdens and all other pre-emptions created after 1 September 1974 with the exception of rural housing burdens. Either the holder of the right of pre-emption must accept the offer (normally mirroring the terms of a bid from a third party) or the pre-emption is lost.

335.     'Title condition' is defined in section 122(1). It is wider than real burden and includes, for example, pre-emptions created in long leases.

336.     The scope of paragraph (a) is likely to be limited. Many feudal pre-emptions have already been extinguished under section 9 of the 1938 Act. Those which remain will be extinguished on the appointed day by section 17(1) of the 2000 Act unless reallotted under sections 18, 18A, 19 or 20 of that Act.

Section 83: Extinction following pre-sale undertaking

337.     Subsection (1) allows the owner of the burdened property to obtain, in advance of a sale, an undertaking that a right of pre-emption will not be exercised for a specified period and subject (if desired) to specified conditions. The 'holder' of a right of pre-emption is the person last registered as having title to the burden (section 82). Generally this will be the owner of the benefited property (section 8(4)), the holder of the personal real burden, or, in the case of a pre-emption in a lease, the landlord. A statutory form of undertaking is set out in schedule 10. If the sale then takes place within the specified period, and if the other conditions are met, the pre-emption is extinguished on registration of the conveyance except for rural housing burdens. If the sale does not occur, then the pre-emption would revive after the specified period.

338.     Subsection (2) makes clear that successors of the holder are bound by the undertaking if it is registered. There is no requirement to register the undertaking. If it is not registered, it will be necessary in Sasine cases to retain the undertaking as evidence of its terms. For land registered in the Land Register, the Keeper is likely to need a copy of an unregistered undertaking before being able to remove the burden from the title sheet.

Section 84: Extinction following offer to sell

339.     This provision is based on, and replaces, section 9 of the Conveyancing Amendment (Scotland) Act 1938 (which is repealed by schedule 15). It applies to the pre-emptions mentioned in section 82 (i.e. all feudal pre-emptions and all other pre-emptions created after 1 September 1974).

340.     Subsection (1) provides that a pre-emption is extinguished if, on sale or other trigger event, the property is offered back to the pre-emption holder. It makes no difference whether the offer is accepted or rejected. As with section 9 of the 1938 Act the extinction is for all time. The constitutive deed might specify a trigger event other than sale. For rural housing burdens subsection (1) applies not to extinguish the burden but rather to satisfy the requirements of the burden in the instant case.

341.     Subsection (2) specifies the form the offer must take for the pre-emption to be extinguished. This does no more than give effect to section 1(2)(a)(i) of the Requirements of Writing (Scotland) Act 1995, which requires a granter to subscribe the relevant deed. A verbal offer, therefore, would be insufficient.

342.     Subsection (3) provides that the offer lapses after a maximum period of 21 days from the date on which it is sent. For rural housing burdens, however, the period is 42 days. An offer which is posted or transmitted by electronic means is taken to be sent on the day of posting or transmission (section 124(3)). If the constitutive deed provides for a period of less than 21 days, then that period will apply.

343.     If the constitutive deed sets out terms under which the land would be sold to the pre-emption holder, then these will be applied. It is, however, more usual for the constitutive deed to provide for the offer back to be made on the same terms as any offer received from a third party which the owner wishes to accept. These are terms 'provided for' in the sense of subsection (4).

344.     Where no terms are set out in the constitutive deed the terms of the offer must be reasonable, and unreasonable terms should not be included in the offer back. It is not necessarily sufficient to repeat the terms agreed with a third party; these are the terms "provided for". The offer to the holder must itself be on reasonable terms. The subsection also allows additional terms to be inserted.

345.     Subsection (5) provides that if the pre-emption holder does not indicate within 21 days that the offer is unreasonable then the offer is deemed to be reasonable. An offer which was found to be unreasonable would not extinguish the right of pre-emption. The pre-emption holder will have to give reasons why the offer is unreasonable.

346.     Subsection (6) makes provision for the case where the pre-emption holder cannot be identified.