Is that burden dead yet?

3. Interpretation

If it is determined that a burden is subsisting, it is necessary to consider whether the act or proposed act is actually a breach. Traditionally, real burdens were interpreted in a severe way. In construing burdens after 28 November 2004 it is necessary to consider the 2003 Act, s 14 which liberalises interpretation. However, it remains necessary to construe burdens objectively, relying on the wording on the register. There are though some useful guidelines to consider.

Burdens will be interpreted contra proferentem, i.e. ambiguous provisions will be read against the interest of the benefited owner. This is tied to the general presumption that owners are free to use and abuse their land as they wish. For community burdens, however, it is much more difficult to rely on a contra proferentem principle given that properties are both burdened and benefited in relation to the same burdens.

One particular problem with burdens created before 28 November 2004 is that many contain feudal jargon. The 2000 Act provides detailed conversion provisions. By s 73(2) a reference to the “superior” in relation to a former feudal burden becomes a reference to the party that obtained title to enforce as a result of the conversion procedure under Part 4. Thus, if a burden provided that an activity was permitted only “with the consent of the superior”, by s 73(2) the activity is permitted with the consent of the benefited owner (where a s 18 notice was registered).

“Superior” does not translate to cover every party that acquires title to enforce as a result of feudal abolition. For example, s 53 of the 2003 Act will in many cases lead to a number of owners within a community acquiring title where previously only the superior had title. In those many cases where no Part 4 notice was registered, the word “superior” is not translated, despite feudal abolition. Often this will not matter, although it is of importance where the burden provides that activity is only permitted with the consent of the superior.

This is dealt with by the 2000 Act, s 73(2A) which provides that where there is power in the superior to consent or otherwise waive or vary the burden, the consent part of the burden is excised. In a development with such a burden pre-abolition a vassal could have approached the superior for consent; now the owner must rely on general rules on variation and discharge.

4. Enforcement

The holder of a burden requires both title and interest to enforce. Title lies primarily with the owner of the benefited property: 2003 Act, s 8(2). Section 8 widens the class of persons with title to include tenants, proper liferenters and non-entitled spouses. Importantly, though, the power to vary or discharge the burden remains with the benefited owner. Minutes of waiver do not require the signatures of tenants or other non-owning parties.

The common law on interest to enforce is replaced by the 2003 Act, s 8(3)(a) which provides that interest exists where “in the circumstances of any case, failure to comply with the real burden is resulting in, or will result in, material detriment to the value or enjoyment of the person’s ownership of, or right in, the benefited property”. The key words are “material detriment”. Interest is determined by consideration of the facts of the specific case. In construing the provision a number of factors are relevant, including the seriousness of the breach and the distance between benefited and burdened properties. The greater the distance, the less likely there is to be interest.

Interest to enforce needs careful consideration. If a party does not have interest, he or she cannot judicially enforce the breach. But, taking a cautious approach, if there is a real possibility of interest being demonstrated, the remedies which could be pursued against a proprietor in breach should be considered.

Although irritancy for breach of real burdens was abolished by the 2003 Act, s 67, other judicial remedies remain. Interdict is the most effective, but has limitations. For example, it is too late to interdict once a building has been completed, although operating a business in contravention of a burden may be interdicted at any time unless the burden is otherwise extinguished.

An alternative where work has been completed is an order for the removal of buildings. But it is likely that the court will refuse this remedy if the defender’s loss would greatly exceed the pursuer’s gain. In that situation, damages may be available provided loss can be shown and quantified. This may not be straightforward, except where the value of the benefited property has demonstrably fallen. 

5. Variation and discharge: formal mechanisms

Minutes of waiver. The standard mechanism for variation of burdens remains the minute of waiver. There are many similarities between old law and new. The minute is to be in writing and granted by the owners of each benefited property having interest to enforce. Generally, where there are community burdens, for example as a result of the 2003 Act, s 53, there will be multiple properties with title to enforce. However, simply because an owner has title to enforce, it does not follow that he or she must be a signatory to the minute of waiver. Failure to sign does not matter if the non-signatory has no interest to enforce, because that owner cannot enforce the burden at all (though there is, admittedly, difficulty in ensuring that there is no interest to enforce).

The expansion of implied rights means that many properties are subject to community burdens. Accordingly, minutes of waiver are often not practical, through involving too many signatories. The general rule is mitigated by special rules of variation and discharge in ss 32-37 of the 2003 Act, which allow for minutes granted under the operative provisions to bind non-signatories.

Deeds of variation. Section 33 provides that a simple majority of owners (including the burdened owner) in the community (or a manager on behalf of the majority) can sign a deed of variation. Once signed the deed is to be intimated to non-signatory benefited owners under s 34, through a copy of the deed, and notice in the form in schedule 4. Notice requires identification of the affected property, the nature of the variation, and intimation that the recipient has at least eight weeks to apply to the Lands Tribunal to preserve the burden.

Section 33 can be contrasted with s 35, which requires the deed of variation to be signed only by the owners of “adjacent units” (i.e. those properties within 4 metres of the burdened property, excluding public roads less than 20 metres wide). The procedure is intended to mirror the neighbour notification rules in planning applications. There is a procedure for intimation to non-signatories within the community under s 36.

There are generally two possible options for intimation: a schedule 5 notice sent to each non-signatory benefited owner; or attaching a schedule 6 notice to the burdened property and to lampposts in its vicinity. In practice the latter is more likely because, as we have seen in discussing s 53, identifying the parameters of a community is difficult. If there are no lampposts within 100 metres of the burdened property, an advertisement in a local newspaper is competent. The notices identify the property and the burdens to be varied, and intimate that the benefited owners have an eight week period to apply to the Lands Tribunal to preserve the burden.

Registering the variation. In order to register a deed of variation prepared under either s 33 or 35: (a) an application must be made to the Tribunal seeking a certificate from its clerk that no applications to preserve the burdens referred to in the proposed deed were received within the relevant time period, or that applications were received but withdrawn; and (b) an oath is to be sworn or affirmed by the burdened owner confirming compliance with the appropriate intimation procedure. Once the certificate is added by the clerk and the deed endorsed, the deed may be registered.

Any benefited owner that has not assented to the deed may object by applying to the Lands Tribunal within eight weeks of intimation of the proposal to register the deed. The application is notified to the burdened owner. If he or she does not respond, the burden is preserved. If the burdened owner objects to the application the matter is considered by the Tribunal. It will only grant the application to preserve if the variation “(i) is not in the best interests of the owners of all units in the community; or (ii) is unfairly prejudicial to one or more of those owners”: s 98(b).

The question of unfair prejudice is generally unlikely to apply. Instead, the objecting benefited owner will typically argue that variation is not in the best interests of the community. This is a stringent test and is not based on reasonableness (the general test for Lands Tribunal applications). Instead the Tribunal is to consider the general community interest, i.e. the interest of all properties subject to burdens, and evaluate the proposed contravention against the factors listed in the 2003 Act, s 100. Given that initiation of the variation and discharge provision requires a number of those directly affected by the development to have assented to the deed of variation, the threshold for the benefited owner to preserve the burden is higher than the norm, and these applications are weighted in favour of the burdened owner.

The “sunset rule”. Sections 20-24 of the 2003 Act introduce a new way of varying or extinguishing old burdens, the so-called “sunset rule”. In principle, any burden created in a deed registered at least 100 years ago may be subject to a notice of termination in accordance with schedule 2. The notice specifies whether variation or discharge of the burden is sought, and that benefited owners have at least eight weeks to object to the Lands Tribunal. Benefited owners within 4 metres of the burdened property receive a copy. Those further away are notified through notices on lampposts in the vicinity of the burdened property.

After receiving notice, benefited owners must decide whether to apply to the Lands Tribunal for renewal of the burden. If the application to preserve the burden is successful the burden survives. If unsuccessful the burdens will be varied or discharged. If no application to preserve is made, the notice of termination can be registered provided it is endorsed with a Lands Tribunal certificate confirming the lack of applications. When endorsed and registered the burdens are extinguished.

6. Variation and discharge: informal mechanisms

Prescription. Often burdens are varied or extinguished without formal deeds, typically where the burden has been breached without challenge. If a burden is contravened without challenge for five years, it is extinguished to the extent of the breach: 2003 Act, s 18. Before abolition the period was 20 years. In the case of breaches which began before 28 November 2004, prescription will extinguish the burden five years after that date or 20 years after the initial breach, whichever is earlier.

The existing general rules on negative prescription apply. Extinction is only to the extent of the breach. So, if there was a general obligation not to build and a conservatory was constructed, the passing of five years would mean that this addition could not be challenged but would not prevent a successful objection to the erection of a garage.

Acquiescence. The common law on acquiescence continues to apply. The 2003 Act, s 16, however, introduces a new rule which helps where there has been building in breach of a burden. The following criteria must be met:

(a) material expenditure is incurred by the burdened owner (or other person subject to enforcement, for example a tenant);

(b) the benefit of the expenditure would be substantially lost if the burden were now to be enforced;

(c) either the owner of the benefited property consented to the work, formally or informally; or (much more typically) all those with enforcement rights (including tenants) either consented or did not object within the period ending 12 weeks after the work is substantially completed; and

(d) the work is sufficiently obvious that those with the right to enforce knew, or ought to have known, about it.

If these criteria are satisfied the burden will be extinguished to the extent of the breach. Successors of the benefited owner(s) will therefore be bound.

But the 2003 Act goes further to help a burdened owner. If the 12 week period has expired, there is a presumption that no objection was made and hence that acquiescence has operated. The presumption is difficult to overcome, particularly where the work was completed some time ago. The principal ground of challenge by a benefited owner is likely to be that he or she objected to the contravention at the time. “Objection” is not defined, but formal court action is not required, nor is specific reference to the burden. A solicitor’s letter will be good evidence of such objection and it is thought that an objection to planning approval, or even something less formal, would also be sufficient. Crucially, any objection from any party with title to enforce will prevent the operation of this provision.

Where a client proposes building work and neighbours have indicated informal agreement, we suggest asking them to write a short note to that effect. This should help if the position is questioned later on.

Section 16 should negate the need to seek minutes of waiver in cases where obvious building work has been carried out and was effectively finished more than three months ago. Here, the chance of a benefited owner overcoming the statutory presumption is slight. Even if he or she succeeded, the only available remedy will probably be damages, and quantifiable loss would have to be shown. Given s 16 we believe that conveyancers should take a pragmatic approach and not generally insist on documentation. Of course there may be cases where a minute of waiver is desirable, such as with very recent work. Title insurance might also then be desirable.

Section 16 only applies in respect of work carried out since 28 November 2004: 2003 Act, s 119(6). For earlier work, common law acquiescence only can be relied on.

7. Variation and discharge: Lands Tribunal

Where it is not possible to obtain formal variation and the burden has not been informally varied, an application to the Tribunal should be considered. A particular example may be a community burden situation where it does not prove possible to obtain the necessary signatures from adjacent neighbours or a majority of the proprietors in the community. Part 9 of the 2003 Act regulates applications. Regard must also be had to the Lands Tribunal for Scotland Rules 2003 (SSI 2003/452). Although the emphasis is on continuity, there are some significant changes from the previous law. The Tribunal has a helpful website: www.lands-tribunal-scotland.org.uk .

Making an application. Any party subject to a real burden is entitled to apply for its variation or discharge: 2003 Act, s 90(1). Applications are to be made on form TC90(1)(a). The fee is £150. When it receives an application, the Tribunal must intimate it to various parties, notably the benefited owner(s): s 93(1). Intimation must also be made to the burdened owner if he or she is not the applicant. The Tribunal may intimate to other parties, for example tenants, if it thinks fit: s 93(3).

Parties to whom intimation is made are given at least 21 days to make representations: s 94(a)(ii). To do so they must give a written statement of the facts and contentions upon which they intend to rely: s 96(1), and pay a fee (currently £25).

Where no benefited owner objects to the application, it is normally granted automatically and without further inquiry: s 97(1) and (3)(a). In this event the process is effectively an administrative one. There is a fee of £88 in respect of making the order. An unopposed application is therefore relatively cheap and speedy.

Where objection is made, the Tribunal must consider the application on its merits. It may grant the application if it is reasonable so to do: s 98. But regard must be had to 10 specified factors set out in s 100. Any advice must be given with these in mind.

The Tribunal’s approach. There have been three reported cases from the Tribunal applying the new legislation: George Wimpey East Scotland Ltd v Fleming 2006 SLT (Land Ct) 2; Ord v Mashford 2006 SLT (Land Ct) 15; and Church of Scotland General Trustees v McLaren 2006 SLT (Land Ct) 27. In these cases the Tribunal stated that its approach is to consider the application as a whole, under reference to the relevant factors present. The focus for applicants should be on working out which factors support the application for variation or discharge, rather than studying previous case law. Nevertheless, such decisions will surely be of some assistance in gauging the likely result of an application.

The Tribunal places particular emphasis on the purpose of the title condition, factor (f). Therefore applicants need to think about the justification for variation or discharge in the light of a burden’s original purpose. Factor (e), the age of the title condition, enables the Tribunal to be more sympathetic with regard to applications in respect of elderly burdens. But as set out in Ord at p 20, age will be given less weight than purpose.

Factor (g), the existence of consents from regulatory authorities, gives statutory effect to the Tribunal’s existing practice of taking into account the granting of planning permission, without regarding this as decisive. But in Ord at p 21 it rather played down this factor as being generally neutral. It is not clear that this is what the new legislation intended.

If the Tribunal approves the application, the burden will be varied or discharged. It is entitled to award compensation to the benefited proprietor but only in very limited circumstances: 2003 Act, s 90(6) and (7). When determining the question of expenses, the Tribunal must pay particular regard to the extent to which the application, or any opposition, is successful: s 103. This is a deliberate change from the previous law. Ill-founded objections should therefore be discouraged.

Finally, s 90(1)(a)(ii) gives the Tribunal a new jurisdiction to rule on the validity, as well as applicability and enforceability, of a real burden. This means that a burdened proprietor can both challenge validity and seek discharge as part of the one application.

In conclusion

In the final analysis the enforceability of burdens and appropriate ways of extinguishing them are matters which must be considered on a case-by-case basis. The individual wording of title conditions and the question of interest to enforce are particularly good reasons for this. We hope, however, that this article may provide a helpful framework for those facing these issues in practice.

Dr Andrew Steven and Scott Wortley are lecturers in the School of Law at the University of Edinburgh