Acts of the Scottish Parliament

Section 54: Sheltered housing

250.     This section creates enforcement rights in relation to burdens imposed on sheltered and retirement housing. It only applies where before the appointed day burdens have been imposed under a common scheme on all the units in a sheltered or retirement development (defined by subsection (3)) other than any unit used in 'some special way'. A unit used in a special way would typically be a unit used as a warden's flat, or a unit used for guest accommodation. Although not subject to the burdens, such units are given the status of benefited properties and, by section 26(2)(b), are part of the 'community'. Burdens falling under section 54 are specifically stated to be community burdens (section 25(2)). The section also makes special provision with regard to a number of core elements that that give this sort of housing its special character. The provisions on community burdens will operate for sheltered or retirement housing if burdens have been imposed under a common scheme on all the units (other than any unit used in a special way) within a sheltered or retirement housing development. Where this is the case, each property in a scheme will be both a benefited and a burdened property in respect of the real burdens. This means that the same conditions will apply to each property and each owner will be able to enforce those conditions against other owners.

251.     The reference to section 122(2)(ii) in subsection (2) ensures that obligations to maintain or reinstate assumed by a local or other public authority are not real burdens affected by section 54.

252.     Subsection (3) defines sheltered or retirement housing developments. The definition places its emphasis on special facilities and features for the elderly, disabled or infirm.

253.     Subsection (4) defines a core burden. This term is used in subsection (5). The "core burdens" in a sheltered or retirement housing development are burdens which regulate the use, maintenance, reinstatement or management of any facility or service which makes the sheltered or retirement housing development particularly suitable for occupation by elderly people (or by people who are disabled or infirm or in some other way vulnerable) or which regulate facilities substantially different from those of ordinary dwellinghouses. In practice these features and facilities are likely to include the provision of a warden service, an emergency alarm system and safety features such as grab rails and ramps. Burdens which regulate the provision of these services or facilities are given special protection.

254.     Subsection (5) specifies the protections for core burdens. Paragraph (a) modifies section 28 of the Act. The relevant paragraphs referred to in section 28(1) allow a majority to confer powers on a manager (and to revoke those powers). For these powers to be used in a sheltered or retirement housing development will require a majority of two thirds of the units. Sub-paragraph (ii) ensures that it will not be possible to use section 28 to confer on a manager the power to discharge any burdens in a sheltered or retirement housing development and that the manager may only be given the authority to vary non-core burdens.

255.     Paragraph (b) of subsection (5) provides that it will not be possible to remove the core burdens in sheltered or retirement housing by the default majority rule provisions in section 33 of the Act. The core burdens are protected by increasing the majority required to make changes to burdens affecting them. It is not possible to discharge any "core burden" by majority discharge under sections 33(2). The owners of a majority of two thirds of the units, as opposed to a bare majority, are required to sign any majority variation of a core burden under these provisions. Section 33(2)(a) generally provides that in the case where one person may own a sufficiently large number of units to be able to sign a deed of variation then the signature of the owners of at least one other unit must also be obtained. Before any deed of variation or discharge under section 33 is signed in respect of a sheltered or retirement housing development there must be consultation as provided for in section 55.

256.     Paragraph (c) of subsection (5) stipulates that burdens relating to age restrictions should not be capable of majority discharge or variation under the provisions in section 33(2). Such a restriction might be to the effect that no person under the age of 60 could reside in the complex. This provision applies to burdens created in constitutive deeds registered after the appointed day as well as to those in constitutive deeds registered before the appointed day

257.     Subsection (6) ensures that no rights of pre-emption or redemption will be conferred under the section. These rights are only exercisable by one benefited proprietor and should not be conferred generally. There are provisions in both section 18 and section 18A of the 2000 Act (section 18A is inserted by section 114(2)) which allow a feudal superior to preserve rights of pre-emption or redemption.

258.     The reference in subsection (6) to section 57 prevents the creation of enforcement rights by the section having the result that rights of enforcement which have been extinguished before the appointed day are resurrected on the appointed day. Section 57(1) ensures that no lost rights revive as a result of sections 52 to 54 and section 56. Section 54 is subject to section 57(3). This makes it clear that where section 54 confers a new right of enforcement on a benefited property which did not exist before the appointed day this will not confer a right to enforce the burden in respect of anything done or omitted to be done in contravention of the burden before the appointed day.

Section 55: Grant of deed of variation or discharge of community burdens relating to sheltered or retirement housing: community consultation notice

259.     Section 55 imposes a requirement for consultation before a deed of variation or discharge is granted under section 33 in relation to properties in sheltered or retirement housing. This applies to both deeds granted under section 33(1) and 33(2).

260.     Subsection (1) requires the proposal to be intimated to all the owners of the units within the community. Subsection (2) states how intimation is to be given. A community consultation notice must be sent. There is a form for a community consultation notice given in schedule 8.

261.     Subsection (3) provides that the deed of variation or discharge must not be granted before the consultation period expires. The consultation period must be at least three weeks. The date on which it expires must be given in the notice (see schedule 8) and the period does not start to run until the all owners have been given intimation of the proposal.

262.     Subsection (4) means that before submitting the deed of variation or discharge for registration the person giving intimation of the proposal must swear or affirm before a notary public (and endorse the deed accordingly) as to the date on which the consultation period expires and that section 55 has been complied with.

263.     Subsection (5) means that where the person giving intimation is unable to swear or affirm as required by subsection (4) due to legal disability or incapacity then a legal representative of that person may so swear or affirm and also that where the person is a legal persona rather than an individual that an authorised person may so swear or affirm.

Section 56: Facility burdens and service burdens

264.     This section is based on, and replaces, section 23 of the 2000 Act (which is repealed by schedule 15). It extends the rule introduced by section 23 of the 2000 Act from feudal to non-feudal burdens. The meaning of 'facility burden' and 'service burden' is given in section 122(1). The broad effect of section 56 is that facility and service burdens are enforceable by the owners of those properties which benefit from the facility or service in question. By contrast to sections 52 to 54, there is no requirement that the benefited properties be subject to like burdens. The burdens need not have been imposed under a common scheme.

265.     The reference in subsection (2) to section 57 prevents the creation of enforcement rights by the section having the result that rights of enforcement which have been extinguished before the appointed day are resurrected on the appointed day. Section 57(1) ensures that no lost rights revive as a result of sections 52 to 54 and section 56. Section 56 is subject to section 57(3). This makes it clear that where section 56 confers a new right of enforcement on a benefited property which did not exist before the appointed day this will not confer a right to enforce the burden in respect of anything done or omitted to be done in contravention of the burden before the appointed day. Subsection (2) also makes it clear that subsection (1) does not confer on any benefited property the right to enforce a manager burden. Manager burdens are personal real burdens and as such are not tied to individual properties. Furthermore by their nature they are exercisable by a specific individual rather than a number of benefited proprietors.

Section 57: Further provision as respects implied rights of enforcement

266.     Section 57 makes a highly technical provision to ensure that sections 52 to 54 and 56 operate as intended. Essentially these sections will recreate enforcement rights which already exist. Sections 52 to 54 and 56 operate, with the sole exception of section 53, in cases where burdens have been imposed before the appointed day. For a burden to be imposed it must be enforceable by the owner of a benefited property. If there is no benefited property under the current law there is no burden imposed. If there is no burden imposed before the appointed day the provisions of sections 52 to 54 and 56 would, but for section 57(2) not operate. The section further ensures that rights of enforcement which have been lost are not revived and that where there are no rights to enforce a burden before the appointed day that no enforcement rights will be conferred by sections 53, 54 and 56 in respect of a pre-appointed day breach of the burden.

267.     Subsection (1) ensures that where a right to enforce a burden has been lost before the appointed day it will not be revived by sections 52 to 54 or 56. If therefore a burden remains enforceable by some benefited proprietors but not by others and it is thus not extinguished those benefited proprietors who have lost the right to enforce will not once again become benefited proprietors.

268.     Subsection (2) addresses a problem area under the current law which might have resulted in common schemes created by a non feudal deed being excluded from the creation of enforcement rights under sections 52 to 54 and 56. It ensures that for the purposes of these sections a burden will be treated as having been imposed and a property will be treated as being subject to a common scheme if this would have been the case had a benefited property been expressly nominated. The subsection applies those sections where a burden has not been successfully imposed because no benefited property was nominated at the time of creation. Under the current law, such a failure to nominate a benefited property means that no burden is in fact created. If for this reason no burden exists before the appointed day, subsection (2) provides for it to be created. Sections 52, 53, 54 and 56 would not by themselves achieve this. Aside from the express nomination of a benefited property, the old law will in certain circumstances by implication nevertheless treat a property as being the intended benefited property. Section 49 removes the possibility of such implied enforcement rights arising in common schemes after the appointed day. For feudal burdens the superiority forms an implied benefited property and therefore feudal burdens (as long as they meet the normal rules of validity) will always have been imposed as there will always have been a benefited property. The problem of there being no benefited property, which subsection (2) resolves, therefore only arises for non-feudal burdens. For non-feudal burdens where there is no express nomination of a benefited property it is possible that the requirements of the current law rules (as developed in cases such as Hislop v MacRitchie Trs (1881) 8 R(HL)) will not be met. The consequence would be that not all units in a common scheme of non-feudal burdens would be subject to the burdens as for at least the last unit to be sold there would be no benefited property. The rest of the units would be burdened, but only the owners of certain other properties would have enforcement rights, the identity of whom would depend upon the order in which the units were sold. This problem might arise, for example, where a power to vary or waive reserved in favour of the disponer, or the absence of sufficient notice of the existence of a common scheme, may exclude the possibility that owners of other properties subject to the common scheme can obtain enforcement rights by implication. Subsection (2) treats the burdens as having been imposed under a common scheme for the purposes of sections 52 to 54 and sections 24 and 56 notwithstanding that before the appointed day the obligation may not have been enforceable as a real burden. This is, however, only the case if the reason why the burden may not have been enforceable is due to the absence of a benefited property and the reason why there was no benefited property is due to failure to nominate a benefited property. The subsection only has pre-appointed day application in cases where the common law does not fill the gap. The subsection has a limited application after the appointed day. This relates to section 53(1). Subsection (2) means that even where the constitutive deed fails to nominate a benefited property as is normally required by section 4(2)(c) then where the burdens are imposed under a common scheme on a unit which is one of a group of related properties and one of the group became subject to the common scheme before the appointed day the result is that the deed will have the effect of imposing burdens and making the related property subject to the common scheme. The better course is of course to nominate the benefited properties but subsection (2) provides, for transitional cases only, a limited safeguard where this is not done.

269.     Subsection (3) makes it clear that sections 53, 54 and 56 do not confer enforcement rights in respect of anything done or omitted to be done by the burdened proprietor which contravened the terms of the real burdens before the appointed day. Section 52 is not referred to as section 52 will not confer enforcement rights were none previously existed. This is possible under sections 53, 54 and 56 and subsection (3) ensures that where enforcement rights derive solely from sections 53, 54 or 56 the new benefited proprietor cannot raise enforcement action in respect of a pre-appointed day breach. Sections 52 to 54 and (for common schemes) section 56 all are capable of overlapping effect. The fact therefore that a unit receives rights to enforce under, say section 54 as a unit within a sheltered or retirement housing development or under section 53 as a related property does not prevent the owner of that unit from enforcing a pre-appointed day breach if that unit was a benefited property before the appointed day.

Section 58: Duty of Keeper to enter on title sheet statement concerning enforcement rights

270.     This section is designed, so far as possible, to make the new enforcement rights apparent from the Land Register. This section imposes a duty on the Keeper of the Registers of Scotland where he has satisfactory information regarding enforcement rights created by Part 4 or of by section 60 of the 2000 Act to set out information on the Land Register.

PART 5: REAL BURDENS: MISCELLANEOUS

Section 59: Effect of extinction etc. on court proceedings

271.     Part 5 contains provisions on a number of miscellaneous matters affecting real burdens. The first of those, section 59, provides that real burdens cannot be enforced after (or to the extent that) they have been extinguished even although the breach in question occurred prior to extinction. Paragraphs (a) and (b) prevent benefited proprietors from attempting to enforce burdens that have been extinguished. It makes no difference if the breach occurred before the appointed day. Paragraph (c) makes clear that an interdict, or order for specific implement, will be deemed to have been reduced or recalled when the burden is extinguished. There is a partial exception for proceedings concluding for the payment of money, whether in relation to a debt or by way of damages. Decrees for payment of money (for example in relation to the cost of common repairs) obtained before the day on which the burden is discharged will continue to be enforceable thereafter.

Section 60: Grant of deed where title not completed: requirements

272.     Section 60 introduces a requirement of deduction of title in cases where the owner granting some types of deed does not have a registered title. This means that the person's ownership must be traced back from the last owner whose title was registered, listing any other unregistered owners who held the property in the intervening period. Subsection (1) will require an unregistered owner who wishes to create, discharge or vary a real burden to establish ownership in this way. 'Owner' in this section does not include a heritable creditor in possession (section 123(3)(a)). Section 4 provides the rules for granting a constitutive deed and deeds of variation or discharge are granted in terms of sections 15, 33 and 35 (a deed of discharge under section 48 is not granted by an 'owner' and so does not come within section 60). The relevant land is the burdened property in the case of constitutive deeds, and the benefited property in the case of deeds of variation and discharge. The meaning of 'midcouple' is given in section 122(1), and deduction of title should in practice follow the style set out in schedule A form 1 to the Conveyancing (Scotland) Act 1924. Deduction is not necessary where the property is already on the Land Register (Land Registration (Scotland) Act 1979 section 15(3), as amended by schedule 14 paragraph 7(6) of this Act).

273.     Subsection (2) makes clear that, if a deed of variation or discharge is granted by a manager, it does not matter if the owners (or some of them) do not have a completed title. No deduction of title is needed, nor, in Land Register cases, need midcouples be produced to the Keeper under section 15(3) of the1979 Act.

Section 61: Contractual liability incidental to creation of real burden

274.     When a burden is created (whether as a feudal or a non-feudal burden) it also operates as a contract between the parties. Section 61 prevents dual validity as both a contract and a real burden. In future an obligation will be either a burden or a contract, but it cannot be both. When the deed containing the obligation has been duly registered, the contractual liability will cease to the extent to which it is duplicated by the real burden. A disposition imposing burdens by reference to a deed of conditions is the leading example of a deed into which a constitutive deed is incorporated. The section does not apply in cases where, notwithstanding registration, no real burden is created (e.g. because the obligation does not comply with rules as to content of a real burden set out in section 3). Nor (section 119(7)) does the section apply to constitutive deeds registered before the appointed day, except where the burdens are community burdens.

275.     Contractual effect will be extinguished for community burdens regardless of when they were created.

276.     Schedule 13, paragraph 14 amends section 75 of the 2000 Act to put beyond doubt that contractual obligations which were incidental to feudal burdens should only remain enforceable between the original parties.

Section 62: Real burdens of combined type

277.     This section acknowledges the fact that the same obligation may be constituted as, for example, both a community burden and as a burden enforceable by someone outside the community. Other combinations are possible. Where it is necessary to do so, a combined burden is to be treated as two separate burdens. If, however, the benefited property is a unit in the community, the burden can only be enforced as a community burden or as one of the personal real burdens, for example, a conservation burden.

278.     The issue is particularly relevant for community burdens. It is possible, for example, that a real burden may be enforceable by the owners of the units within the community against each other and also by the owner of nearby land which does not form part of the community. The owner of this land would be able to enforce the burden as a "neighbour burden". If the community, for example using new discharge mechanisms provided by Part 2, were to discharge the burden the discharge would only affect the rights of the owners of the community to enforce the burden and would not affect the right of the nearby owner to enforce the burden as a neighbour burden.

279.     Subsection (2) makes it clear, however, that the owner of a unit within the community cannot enforce an obligation set out in an ordinary real burden other than as a community burden. This avoids any possibility that an owner within the community may be able to claim dual rights to enforce the same obligation as "distinct" burdens. If however a person entitled to enforce a personal real burden (i.e. of the type described in section 1(3)), such as a conservation burden, is also an owner of a unit in the community that person would be able to enforce the obligation as a personal real burden independent of any right to enforce it as an ordinary community burden. Essentially where the right to enforce the burden is tied to a unit within the community the burden is only enforceable as a community burden and it is treated as a single obligation but where the right to enforce is either tied to land outwith the community or is not tied to land at all, then the obligation will be treated as both a community burden and as another distinct type of burden.

Section 63: Manager burdens

280.     Section 63 identifies a new category of real burden known as a manager burden. The category is new, but the burden itself is already familiar from current practice, and the section applies to existing real burdens as well as to those created after the section comes into force the day after Royal Assent (section 129(3)). A manager burden is typically used by a developer to appoint a manager in the initial years of a housing or other development. It stipulates who has the power to appoint or to act as the manager for the scheme and to administer and enforce the burdens imposed. This section confirms that this is a valid burden, and provides rules as to how it should operate.

281.     Subsection (1) defines a 'manager burden' as one which confers the power to act as, or to appoint or dismiss, a manager. 'Related properties' is defined in section 66. Subsection (1) is a qualification of the rule, stated in section 3(7), that a real burden must not have the effect of creating a monopoly. The meaning of 'manager' is given in section 122(1). This section applies to both existing and new burdens. If an existing burden provides for the nomination of a manager in perpetuity, it will become subject to the limitations in subsections (2) and (4).

282.     The duration of a manager burden is specified in subsections (4) and (5). But even during those time periods, the power cannot be exercised unless its holder owns at least one of the properties being managed. This is provided by subsection (2). In some manager burdens the power to appoint may be tied to one of the properties in particular. Much more usually, however, the power will be conferred on a person without any reference to a benefited property. This is because typically developers will not know which of the properties on the estate will be the last to be sold. These manager burdens resemble other personal real burdens such as conservation burdens in that they are in favour of a person. But unlike conservation and maritime burdens, the benefited proprietor must still own a property within the scheme: it is just that no one unit need be singled out as benefiting from the manager burden. As a result the effect of subsection (2) is to provide what is virtually a floating benefited property. As with other personal real burdens there is a presumed right to enforce (section 47).

283.     Subsection (3) makes clear that the holder of a manager burden may assign their right. Registration is not required, but there must be intimation to the owners of the rest of the scheme.

284.     The normal rule under subsections (4) and (5) is that a manager burden comes to an end after five years but this is reduced to three years for sheltered or retirement housing. It would be possible to provide for a shorter period in the constitutive deed. Paragraph (a) of subsection (5) provides for a special period of thirty years for local authority housing.

285.     Subsection (6) allows a duration of thirty years where the burden was imposed in a sale under the right-to-buy legislation for council houses.

286.     Subsection (7) describes how the period of a manager burden is to be calculated. Where the manager burden is created in a deed of conditions affecting all of the related properties, the manager burden will be extinguished for all of them on the same day, three, five or thirty years after registration of the deed of conditions. If, however, the manager burden is created in a series of dispositions containing the same burdens, the duration of the burden will be calculated from the registration date of the first constitutive deed that created a manager burden in respect of one of those related properties, i.e. the first sale.

287.     Subsection (8) prevents dismissal of the manager under the dismissal provisions in section 28, or for any other than right to buy properties, in section 64 of the Act as long as a manager burden is in operation. The note on section 64 explains the exception for right to buy properties. In theory the titles might confer an independent power of dismissal on the owners of the managed properties.

288.     Subsection (9) makes clear that a manager burden imposed in a grant in feu is not extinguished with the abolition of the feudal system. Instead it will be extinguished in accordance with subsection (4); and until that occurs the former superior will be able to exercise the power under the burden.

Section 64: Overriding power to dismiss and appoint manager

289.     In the absence of any provision in the titles the manager may be dismissed by the owners of a majority of the units (section 28(1)(d)). But this rule can be altered in the titles, and a higher threshold imposed. Section 64 restricts that threshold. Whatever the titles may say, the owners of two-thirds of units can always dismiss the manager once the manager burden has been extinguished. The meaning of 'owner' is given in section 122. The section is not confined to communities and community burdens, and applies to any group of related properties.

290.     The rule in section 28 of the Act for dismissal of a manager by a simple majority will not come into play whilst a manager burden is still in effect. As a consequence, dismissal by a simple majority under section 28(1)(d) will not be possible until either the last unit is sold or the three, five or thirty year period has elapsed. In a similar way the two-thirds rule provided by section 64(1) could not be used until the time period has expired or the last unit is sold, with one exception. This exception is that the owners of two-thirds of the properties in estates subject to the thirty year period provided for in section 63(5) (purchasers in right-to-buy sales) can remove a manager at any time, i.e. before the expiry of the thirty year period. In all other schemes (those subject to the three or five year limit), the two-thirds dismissal rule would not be available while the manager burden was exercisable.