The new law of real burdens

Servitudes

Part 7 of the Act contains important new rules with regard to servitudes, especially positive servitudes. From and after the appointed day it will not be possible to create a positive servitude by express provision in a deed in writing unless it is registered against both the benefited property and the burdened property. It will however continue to be possible to establish a servitude by implication or by prescriptive possession for 20 years, and servitudes consisting of a right to lead pipes, cables, wires or other such enclosed units over or under land for any purpose are excluded from the requirement for both benefited and burdened properties. This makes it clear that the Act dispenses with the requirement under the existing common law for new servitudes to be of a type already known to the law. Section 77 expressly provides that it is competent to create pipeline, etc servitudes as positive servitudes. That is to be deemed to have been the case at all times, which means that any doubts as to the validity of existing servitudes for pipelines, cables, etc are eliminated.

As regards negative servitudes, section 79 states that with effect from the appointed day it will no longer be competent to create a negative servitude. Secondly, with regard to existing negative servitudes section 80 provides that they will cease to exist as such on the appointed day, “but shall forthwith become a real burden”, thereafter referred to in the section as a “converted servitude”. If a negative servitude was registered against a burdened property prior to the appointed day it becomes a real burden enforceable against that property. However, if a negative servitude was not registered against the burdened property before the appointed day it will be extinguished on the expiry of 10 years unless the owner of the benefited property executes and registers within the 10 year period a notice preserving the converted servitude in the form provided by schedule 9 to the Act.

Section 81 provides that a real burden consisting of a right to enter or otherwise make use of the burdened property shall with effect from the appointed day cease to exist as a real burden but shall “forthwith become a positive servitude”.

Rights of pre-emption

As already mentioned, it will not be competent after the appointed day to create real burdens consisting of rights of redemption, reversion or other options to acquire property, but those created prior to the appointed day will remain in full force and effect subject to the operation of the “sunset rule”. Sections 82 to 85 do however make some amendments to the existing law with regard to the subsistence of and rights to enforce real burdens consisting of pre-emption rights. First, section 82 makes it clear that the new operative sections (83 and 84) apply to any existing right of pre-emption which was either created originally in favour of a feudal superior or in a deed executed after 1 September 1974. Section 83 contains a new provision whereby the owner of a property which is subject to a right of pre-emption can obtain in advance of the sale an undertaking by the creditor in the right of pre-emption that it will not be exercised for a specified period in terms of the form of statutory undertaking set out in schedule 10. If the burdened property is sold within the period specified in the undertaking the right of pre-emption is extinguished on registration of the conveyance in favour of the third party purchaser.

Section 84 replaces and effectively re-enacts section 9 of the Conveyancing Amendment (Scotland) Act 1938 but makes it clear beyond doubt that if the right of pre-emption is not exercised within the period stipulated in the constitutive deed (now a maximum of 21 days) it is completely extinguished, except in the case of a rural housing burden where the period is extended to 42 days and the pre-emption right is only extinguished in respect of the particular sale. The section also provides that it is no longer necessary to offer the property to the creditor in the pre-emption right on the same terms as an offer received from a third party provided that the terms of the offer to the holder of the pre-emption right are reasonable. If the latter does not object to the proposed terms they are then deemed to be reasonable.

Principal changes to 2000 Act contained in 2003 Act

First, as regards sporting rights reserved to the superior in a grant in feu, the 2000 Act as passed makes no reference to these rights with the result that they would have been extinguished with effect from the appointed day. The Executive now accepts that this would have amounted to confiscation of a valuable right vested in the superior and by section 114(5) a new section 65A is inserted in the 2000 Act to the effect that prior to the appointed day the superior may execute and register against the dominium utile a notice in the form contained in schedule 11A prospectively converting the sporting rights into a tenement in land. The notice is to contain details of the title of the superior, the land which is subject to the sporting rights, a description of those rights and the terms of any counter-obligation which may be enforceable against the superior. In addition, before submitting any notice for registration prospectively converting the sporting rights the superior is to swear or affirm before a notary public that to the best of his or her knowledge and belief all the information contained in the notice is true. Sporting rights are defined as “a right of fishing or game”.

As mentioned in the March part of this article, the Title Conditions Act introduces a number of new categories of real burdens only two of which, conservation and maritime burdens, were covered by the 2000 Act.

Section 114 of the 2003 Act amends the 2000 Act to the effect that the new provisions with regard to personal pre-emption and redemption burdens, economic development burdens and health care burdens created in grants in feu may be preserved by the superior executing and registering against the dominium utile before the appointed day a notice prospectively converting the burden into a personal pre-emption burden or a personal redemption burden. Likewise where the feudal burden has been imposed for the purpose of promoting economic development or for the purpose of promoting the provision of facilities for health care, and in the former case was previously enforceable as superiors by Scottish Ministers or a local authority and in the latter by a National Health Service Trust or Scottish Ministers, in either case by registration of the appropriate notices at any time before the appointed day these burdens may be converted to economic development burdens or health care burdens under the 2003 Act.

Conclusion

While as mentioned at the beginning of this article, the sheer length and complexity of the new legislation is likely to result in not a few headaches for conveyancers as they come to grips with it before November, warm tribute must be paid to the work of the Scottish Law Commission on whose Reports on the Abolition of the Feudal System and Real Burdens (Scot Law Com nos 168 and 181) and the draft bills annexed to them the 2000 and 2003 Acts are based. Credit is also due to Scottish Ministers for embarking on a comprehensive programme of land law reform almost immediately after the establishment of the Scottish Parliament, which has already resulted not only in the two Acts which are the subject of this article but also in the passing of the Leasehold Casualties Act 2001 and the Land Reform (Scotland) Act 2003. It is virtually certain that none of these reforms would have been achieved if the Scotland Act 1998 had not been passed, by reason of lack of parliamentary time at Westminster for Scottish legislation, and to that extent the worth of a devolved legislature cannot be denied.  

John McNeil is a member of the Conveyancing Committee