Abolition of the feudal system

Preparing for the abolition of the feudal system has been a challenging task.  Systems of land tenure do not lie down and die of their own accord, and even after 800 years of adaptation and reform, the grip of feudalism remains tenacious and all-pervasive.  Feudal abolition could scarcely be accomplished without fundamental change.  The draft Abolition of Feudal Tenure etc (Scotland) Bill appended to the final report of the Scottish Law Commission (Scot Law Com no 168) comprises all of 71 clauses and 9 schedules and runs to some 100 pages.  Yet while the legislation is, necessarily, complex, the broad principles of the reform are straightforward and can be summarised in a few pages.

From dominium utile to dominium

Clause 1 sets the scene at once: ‘The feudal system of land tenure, that is to say, the entire system whereby land is held by a vassal on perpetual tenure from a superior is, on the appointed day, abolished”.  As from the “appointed day” there will be no more superiors and vassals.  Vassals will become outright owners, for by clause 2 dominium utile is converted into outright ownership (ie dominium pure and simple).  Superiorities will disappear.  The Crown will be affected in the same way as any other superior, so that land will cease to be held from the Crown.  But other Crown rights remain (clause 52).  For example, the Crown will continue to have residual title to property not otherwise owned, including heritable property.

The appointed day will not happen at once.  The Commission recommends an interval of about two years between royal assent and the appointed day.  This will give an opportunity for the legislation to be publicised and for clients to be appropriately advised.  The appointed day will be a term day (clause 65).

Feuduty

All remaining feuduties will be extinguished on the appointed day (clause 7).  There cannot be many left.  The former superior will be entitled to full compensation, on the usual basis (ie tied to 2.5% Consolidated Stock), but must take active steps to claim it by service of an appropriate notice (clauses 8 and 9).  Liability falls on the person who was vassal immediately before the appointed day.  The sum due is not secured on the ground, and arrears of feuduty will also cease to be so secured  (clause 13).  Hence feuduty will no longer be an issue in examination of title.  The superior’s notice must be served within two years.  If the amount claimed is £100 or more the former vassal has the option of paying by instalments (clause 10).  The provisions apply not only to feuduty but also (by clause 50) to ground annual, skat, teind, stipend, standard charge and other perpetual periodical payments.

The period of negative prescription for payment of redemption money still due under the Land Tenure Reform (Scotland) Act 1974 is reduced from 20 years to 5 (clause 51).  This means that money held for many years on deposit receipt against the day that the superior appears can now be released.

Real burdens: abolition

Today feudalism is little more than a system for enforcing real burdens - or charging money for not enforcing them.  Many of these burdens will not survive.  If this result is scarcely avoidable on technical grounds, it also meets the most commonly voiced criticism of feudalism, namely that too many superiors control the life opportunities of too many communities.  Community control, on this view, should be a matter either for the community itself, through reciprocally enforceable real burdens, or for public authorities.  It is not properly a matter for a private individual (or body corporate), however well-intentioned, whose rights of control are not matched by corresponding obligations or accountability.  In practice such control is often deeply resented.  Clause 16 makes the position clear.  Burdens which are enforceable only by a superior will be automatically extinguished.  Burdens which are also enforceable by co-feuars will continue to be so enforceable.  So, for example, in a housing estate feued by volume builders, the builders will lose their rights but (assuming the creation of third party rights) the burdens will continue to be mutually enforceable within the estate itself.  In the terminology used by the Commission in its companion discussion paper on real burdens (no 106, 1998) the burdens will be “community burdens” - burdens which regulate a community and are mutually enforceable within that community.

A second type of burden will also survive.  Some real burdens make provision for the maintenance or use of a common facility, such as a private road or water supply, or recreational facilities, or the common parts of a tenement.  Usually such burdens are mutually enforceable by the interested properties.  But occasionally they are not.  Unless special provision were made, common facility burdens which were enforceable only by a superior would perish with the feudal system itself.  Clause 18 does the necessary by providing that such burdens should survive and be enforceable by the owners of those properties which take benefit from the facility.

Real burdens: savings

Superiors should not always lose their rights.  Sometimes a real burden protects an essential interest of the superior.  In that case it should be possible to preserve it.  In the Commission’s judgment there are five cases where, exceptionally, a superior should be able to preserve enforcement rights.

The first need be mentioned only briefly.  Sometimes real burdens are imposed in the interests of conservation.  An example would be an historic building restored by a conservation trust and feued subject to burdens designed to preserve the restoration work.  The Commission recommends that burdens of this kind should be capable of surviving.  The Secretary of State (or a successor member of the Scottish executive) is given power to draw up a list of conservation bodies (clause 21).  A superior which is nominated as a conservation body can then preserve the right to enforce any “conservation burden” by registering a notice in a prescribed form in the Land Register or Register of Sasines.  This must be done during the period between royal assent and the appointed day (clause 22).  A “conservation burden” is a real burden which preserves for the benefit of the public the architectural, historical or other special characteristics of land or buildings.

The other savings require that the superior own land in the vicinity of the servient tenement (ie of the property subject to the real burden).  The idea is that such land should become a replacement dominant tenement.  The detailed rules are in clause 17.  To preserve a burden or burdens the superior completes a notice in the prescribed form.  The notice specifies the burdens, the servient tenement, and the replacement dominant tenement.  The notice is then registered in the Sasine or Land Register, against both tenements.  This must be done before the appointed day.  On the appointed day the (now former) superior retains a right to enforce, but in the capacity as owner of the replacement dominant tenement.  The feudal burden has been converted into a “neighbour burden” (that is, a burden enforceable, non-reciprocally, by one neighbour against another).  Only a limited class of burdens can be saved in this way.  Clause 17(7) gives a complete list: (i) burdens comprising a right to enter or otherwise make use of the servient tenement; (ii) burdens comprising a right of pre-emption or redemption; (iii) burdens conceived for the benefit of minerals, salmon fishings or some other incorporeal property; and (iv) burdens of any kind if the proposed dominant tenement has on it a permanent building which is in use as a place of human habitation or resort and is within 100 metres of the servient tenement.

Although a residual category, the last is the most important.  It consists mainly of burdens for the protection of amenity, and amenity is likely to be important only in cases involving buildings which are used for habitation, recreation or work.  The purpose of the 100-metres restriction is to prevent the perpetuation of feudal control by the indiscriminate registration of notices.  Only obviously deserving cases are to qualify.

Three further points should be mentioned.  First, the requirement of interest to enforce remains, and will not be presumed (clause 19).  Secondly, if the new dominant tenement is later divided, only one part can succeed to the right to enforce the burdens (clause 20).  This is to take account of the rule that superiorities cannot be divided.

Feudal abolition should not have the effect of increasing the number of dominant proprietors.  Finally, any burdens which survive feudal abolition will be subject to whatever legislation may result from the Commission’s parallel project on real burdens.  (For a summary of the Commission’s provisional views, see pp 19-21 of the Journal for October 1998.)  The Commission recommends that such legislation should come into force on the day that the feudal system is abolished.

Real burdens: cleansing the Land Register

Real burdens will not disappear from the Land Register overnight.  Feudal burdens cannot be deleted if they are subject to third party rights, and such rights are notoriously difficult to detect.  In its discussion paper on real burdens the Commission proposes a scheme whereby implied enforcement rights should be registered within 5 years or lost altogether.  On the assumption that such a scheme will be enacted, clause 40 introduces a 5-year freeze on deletions.  Thereafter feudal burdens will be removed from the Register on request.

Superiors’ obligations

Superiors will be relieved of obligations as well as of rights.  Clause 48 provides for the extinction of all obligations which are enforceable against a superior qua superior.

Contractual rights

Rights which depend on the law of contract will be unaffected by the legislation.  For example, the terms of a feu disposition will continue to be enforceable in a question between the original parties (clause 69).

Mixed estates

Many superiors hold titles which comprise a mixture of dominium utile and dominium directum.  Only the latter will be abolished.  After the appointed day the former superior will continue to own (but now as outright owner) any minerals which were reserved as well as any pockets of land which had not been feued out.

Barony titles

The dignity of baron is preserved by clause 57 but severed from the ownership of land.  In future transfers will be by assignation, without registration, and land law will cease to be troubled by the peculiarities of barony titles.

Partnerships

A partnership is said to be incapable of sustaining a feudal relationship and hence of taking title to land in its own name.  This difficulty will disappear with feudal abolition, and clause 64 makes clear that a firm can own land.  No doubt there will often be good practical reasons for continuing to take title in the name of trustees.

Compensation

Today such value as remains in superiorities lies in feuduty and in the right to enforce real burdens.  Full compensation will be paid for loss of feuduty, as already mentioned.  The position of real burdens is more complex.  If a real burden protects an essential interest of the superior, then it can be preserved under the proposals summarised above.  In other cases there will often be a question as to whether there is, in a technical sense, any interest to enforce at all.  For example, it is difficult to see where interest lies if feuduty has been redeemed and a superior owns no land in the immediate vicinity.  If a real burden is not protecting an essential interest it is probably doing no more than providing a small and erratic flow of income from minutes of waiver.  The principle that the loss of such income should not be compensated was established many years ago, by s1 of the Conveyancing and Feudal Reform (Scotland) Act 1970.  The Commission has no proposals to depart from that principle.

In one case, however, compensation seems justified.  A real burden may have been used to reserve development value.  A property may have been feued for a heavily discounted consideration, or even for no consideration at all, on the understanding that a further financial return was to be available to the superior later if the land was freed for some use prohibited by the burden.  In such a case feudal abolition would bring about a windfall gain to the former vassal, and a corresponding loss to the former superior.  It seems reasonable that the former vassal should pay for the windfall, provided that he realises its value by using the property for one of the prohibited purposes.  The details of the scheme can be found in clauses 28 to 34.  The right to claim compensation is reserved by registration of a notice in the prescribed form in the Land Register or Register of Sasines.  Only development value burdens qualify.  Registration must take place before the appointed day.  Compensation is then payable if, within 20 years, there is an occurrence which would have been a breach of the burden.  Compensation is the lesser of the superior’s loss or the vassal’s gain, loss being measured by reference to the original reduction in consideration.

Section 29(2)(d) of the Scotland Act 1998 provides that an act is outside the legislative competence of the Scottish Parliament if it is incompatible with the European Convention on Human Rights.  Having considered the relevant case law the Commission is satisfied that its proposals, taken as a whole, are fully compatible with the European Convention.

Cleaning up the statute book

Much of the length of the draft bill is accounted for by consequential amendments and repeals.  The bill repeals 45 whole acts, as well as 246 sections, 57 schedules and many obsolete and unnecessary words in other acts.  Little survives of the older conveyancing acts, and in due course a consolidation act will be required.  University teachers will have to think up new examination questions.  There will be no more entails, or thirlage, or notarial instruments, or kindly tenants of Lochmaben.  The opportunity has been taken to reverse the effect of Beneficial Bank plc v McConnachie 1996 SC 119 by providing (sched 8 para 32(23)(a)) that the security subjects in a standard security are sufficiently described if they can be identified.  The provision is retrospective, and comes into effect immediately on royal assent.

Timetable

The final report of the Government’s Land Reform Policy Group, published last month, recommends (p6) “an integrated programme of land reform legislation over the next 4 or 5 years”.  The first item on the list is the abolition of the feudal system.  Whether this translates into action in the first year or two of the Scottish Parliament remains to be seen.  But early legislation would mean the “appointed day” for feudal abolition being set for 2002 or 2003.

Professor Kenneth Reid is Professor of Property Law at the University of Edinburgh and a Law Commissioner